SaaS agreements have unique considerations around data ownership, security, and service levels. Negotiating these terms protects your business.
Key Takeaways
- Data ownership should be clear
- Security obligations should be specific
- SLAs should have meaningful remedies
- Termination should include data return
Key Negotiation Points
- Data ownership and portability
- Security certifications (SOC 2, ISO 27001)
- Uptime guarantees and credits
- Breach notification procedures
- Termination assistance
SLA Credits: Making Uptime Real
A "99.9% Uptime Guarantee" is meaningless without a penalty. A Service Level Agreement (SLA) should specify "Service Credits"—if the system is down, you get money back (or free months). Without this, your only remedy for downtime is... nothing.
Data Ownership and Portability
The contract must state clearly: "Customer owns all Customer Data." Furthermore, there must be a "Transition Services" clause. If you cancel, the vendor must agree to give you your data back in a usable format (CSV/SQL dump) within 30 days. Don't let your data be held hostage.
The 'Auto-Renewal' Gotcha
Many SaaS contracts renew automatically for another full year unless you cancel 60 days in advance. We see clients trapped in 5-figure contracts for software they stopped using because they missed the "non-renewal notice" window. Always negotiate for "renewal by mutual written agreement" or set strict calendar reminders.
Uptime SLAs and Service Credits
Your Service Level Agreement (SLA) promises 99.9% uptime. But what happens if you fail?
The Fix: Define the remedy strictly as "Service Credits" (e.g., 10% off next month's bill). Without this cap, a customer could sue you for *millions* in lost revenue because your server was down on Black Friday. Your contract must explicitly state that Service Credits are the "Sole and Exclusive Remedy" for downtime.
Protect Your Business from Costly Legal Mistakes
A handshake deal is fine until things go wrong. Whether you're starting a company, negotiating a contract, or protecting your IP, you need clear legal agreements. Don't risk your hard work.
We offer a free 15-minute consultation to review your business needs.
Get Your Free Consultation NowWhat is 'Indemnification for IP Infringement'?
This is non-negotiable. If the SaaS vendor's code steals someone else's patent and YOU get sued for using it, the Vendor must pay your legal fees. Never sign a SaaS deal without this protection.
Disclaimer: This article is for general information only and is not legal advice.