SaaS agreement

A SaaS agreement, for software as a service, is the contract by which a provider makes software available to a customer remotely, over a network, without installation on the customer’s systems, in return for a subscription. The customer acquires neither the software nor a copy: it accesses a service. The SaaS agreement is analysed mainly as a services contract, to which are added a limited licence to use and commitments on data.

The essential clauses of the SaaS agreement

First, the description of the service and its evolution: the provider generally reserves the right to modify the software, which the customer must frame to preserve essential functionalities. Next, the service levels, or SLA, which set availability, restoration times and penalties. Then the data: ownership of the customer’s data, location, security, processing within the meaning of the General Data Protection Regulation, return at the end of the contract. Finally, duration, price, suspension for non-payment and limitations of liability, which are often the most negotiated point.

Exit and dependency

The customer of a SaaS agreement depends entirely on the provider for access to its own tool and data. The exit clause organises the end of the relationship: format and time limit for returning data, migration assistance, retention period then deletion. Without this clause, the company is exposed to a business interruption or a loss of data. The service suspension clause, often reserved to the provider, must be framed by notice and limited to serious breaches. The texts of general contract law can be consulted on Légifrance.

Key points

In practice, the SaaS agreement transfers no intellectual property right in the software. However, the specific developments made for the customer, the configurations and the data must be the subject of express stipulations on their ownership and confidentiality, in connection with trade secrets. For more on these issues, see our analysis of software protection.