Key Considerations When Drafting a SAAS Agreement


Software as a Service (SAAS) agreements have become increasingly prevalent in today’s digital landscape, enabling businesses to access and use software applications over the internet. However, drafting a comprehensive and legally sound SAAS agreement is critical for both providers and users. In this blog post, we will explore essential considerations to keep in mind when drafting a SAAS agreement and why seeking legal counsel, such as Falcon Law PC, can be invaluable. For expert guidance on SAAS agreements, please contact Falcon Law PC at 1-877-892-7778 or reach out via email at

1. Clear Service Description:

Define the SAAS service comprehensively, including its functionalities, features, and any limitations. Users should have a clear understanding of what they can expect from the service.

2. Data Protection and Privacy:

Clearly outline data handling practices, including data collection, storage, and security measures. Ensure compliance with data protection laws, such as the General Data Protection Regulation (GDPR), if applicable.

3. Subscription Terms:

Specify the terms of the subscription, including pricing, payment schedules, and any potential fee adjustments. Make renewal and cancellation procedures explicit.

4. Service Level Agreements (SLAs):

Include SLAs that define the service uptime, response times, and support availability. Be transparent about service reliability and any planned maintenance windows.

5. Intellectual Property Rights:

Address intellectual property ownership and licensing. Specify whether users are granted any rights to use, modify, or distribute the software.

6. User Responsibilities:

Clearly state user responsibilities, such as compliance with acceptable use policies, data backup, and adherence to security practices.

7. Data Ownership and Access:

Determine data ownership and specify whether users can access their data after termination. Outline any data retention and deletion policies.

8. Liability and Limitations:

Define the extent of the provider’s liability, including exclusions and limitations. Address indemnification, liability caps, and dispute resolution mechanisms.

9. Termination and Exit Strategy:

Detail the conditions under which the agreement can be terminated, and the consequences of termination. Explain the process for data retrieval and migration upon termination.

10. Compliance with Laws:

Include a clause requiring both parties to comply with applicable laws and regulations, including export control laws and industry-specific regulations.

11. Updates and Changes:

Clarify how updates, upgrades, and changes to the SAAS service will be managed, including any associated costs or notification requirements.

12. Confidentiality and Non-Disclosure:

Incorporate confidentiality and non-disclosure provisions to protect sensitive information shared during the course of the agreement.

13. Dispute Resolution:

Specify the method of resolving disputes, whether through negotiation, mediation, or arbitration. Identify the governing law and jurisdiction.

14. Force Majeure:

Include a force majeure clause to address unforeseen circumstances that may prevent either party from fulfilling its obligations.

15. Governing Law and Jurisdiction:

Designate the governing law and jurisdiction under which any legal disputes will be resolved.

16. Customization and Legal Review:

While SAAS agreements often use templates, it is crucial to customize them to reflect the specific nature of your service and to seek legal counsel, such as Falcon Law PC, to ensure legal compliance and protection of your interests.


Drafting a comprehensive SAAS agreement is a critical step in ensuring a mutually beneficial and legally secure relationship between SAAS providers and users. Considering these key factors and seeking legal guidance from Falcon Law PC can help you navigate the complexities of SAAS agreements, protect your interests, and provide clarity to all parties involved. For expert advice and assistance in drafting your SAAS agreement, please contact Falcon Law PC at 1-877-892-7778 or email us at We are here to support you in creating agreements that meet your business objectives and comply with legal requirements.

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