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With telecommuting becoming more prevalent in the business world, we are also seeing an increased dependence on software as a service (SaaS) applications. Whether you are an end-user of a SaaS service, or a procurement manager tasked with negotiating a long-term contract with a SaaS provider, it is very important to understand the legal aspects of interacting with such services. Furthermore, if you are a SaaS provider, it is important that you work with a highly skilled legal specialist in creating your own service contract, such as the attorneys at copyright dispute lawyer Australia.

The first thing to keep in mind from a legal perspective, is that click-through user agreements are legally binding. Most of us skip right through this agreement process, even though terms in such contracts nearly always favor the vendor. While many users won’t have another choice but to accept if they are subscribing to a SaaS solution independently, it is crucial that enterprises try and negotiate custom packages and terms with such providers. This will ensure that your enterprises’ needs regarding compliance and security are being met.

Most important of all is being aware of your rights to the data that you are placing into the SaaS system. Items that can be placed into a contract include confirmation of data return and copy deletion upon termination of service, as well as guaranteed data backup and disaster recovery procedures. Data breaches and ensuing leakage of confidential information is also growing, as hacking threats are constantly on the rise. A good SaaS contract will deal with issues of liability in such cases, favoring the party with greatest leverage in each case.

From the perspective of the SaaS provider, especially if you are a start-up looking to create a solid SaaS contract, following are some clauses that you should carefully craft to enhance your operations, while still keeping the sign-up and agreement process smooth for the end-user. Be sure to spell out costs clearly, as well as all payment process details. Such include: platform fees, implementation fees, billing frequency, automated renewal terms, cancellation policy, required notification method, among others. Just as important are those elements related to termination, and beyond the basic cancellation policy itself, these should include termination for breach clauses.

saas contract best practices

Many times, start-ups will use SaaS contract templates provided by incubators or even just downloaded from the Internet. While such can initially save a start-up some minor costs related to crafting a customized contract, it is nearly always a bad idea. Firstly, there are a plethora of data privacy laws that must be accounted for, and only a local technology lawyer will be up to date on these fine points of the law. Even a single infraction on the part of an SaaS provider concerning data privacy can snowball into a class action lawsuit, once every other user is made aware of the oversight. So it is likewise crucial that SaaS providers work closely with a specialist attorney from day one. Cultivating this relationship will also make it easier to negotiate customized versions of this SaaS contract with enterprise clients, as the lawyer who crafted it will be intimately familiar with its construction and can negotiate on the SaaS provider’s behalf.