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. 

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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

Termination

› Term for security deficiency

› Term for convenience

› Term for repeated SLA violations

› Obligations on termination

› Transition assistance

Indemnification

› 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

Insurance

› 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