Software & Technology

Introduction to SaaS/Cloud Agreements

June 3, 2022

Cloud-based applications and software as a service (SAAS) software applications are pervasive in today’s business and technical environment and make up a substantial segment of any company’s technology stack. Here are the critical clauses to include in SaaS agreements, so you have useful guidance for your company. 

Terms and Definitions

› How is customer data defined
› How is the product defined
› Scoping the documentation
› Understanding the limits of use
› What is included in “the Agreement” - finding supplemental terms and policies


Data Rights and Obligations

› Ownership of customer data
› License to customer data
› Aggregated use of customer data
› Access to customer data
› Use of derivative work product
› The Data Processing Addendum
› Limitations on data entry


Representations and Warranties

› Performance warranty
› Malicious code warranty
› IP infringement warranty
› Compliance with applicable law
› The Service Level Agreement
› Accuracy of security policies
› Accuracy of documentation


Information Security

› Covenants relating to standards
› Covenants relating to certifications
› Access to audits and attestations
› Notification and incident response procedures
› Access control
› Use of subcontractors
› Location of data
› Procedure for data destruction
› Encryption standards
› The InfoSec Addendum



› Term for security deficiency
› Term for convenience
› Term for repeated SLA violations
› Obligations on termination
› Transition assistance



› Inclusion of privacy and information security related claims
› Defense obligations
› Fines and penalties


Damages; Limitation of Liability

› General cap
› Super cap
› Uncapped damages
› Understanding consequential, special, and indirect damages
› Data loss
› Loss of revenue



› Cyber liability insurance
› Errors and omissions insurance


Commercial Terms

› Payment terms
› Service credits
› Renewals
› Fee escalators
› Ancillary costs


Services and Implementation

› Professional services addendum
› Implementation costs
› Terms of services
› Deliverables 

June 3, 2022