SaaS Agreement – How do I draft the online account and subscription clause?

If your software is provided on a subscription basis, you should ensure that you include a clause that addresses users’ online subscriptions and accounts in your Software as a Service (“SaaS agreement”). You should address how users set up their account, what private information they must provide and how this information will be protected. 

It is important to address, and have a policy for, how you will protect users’ private information, as there may be ramifications for your business if you do not protect this information, including breaching the Privacy Act1988 (Cth) (Australian Privacy Principle 11 — security of personal information).

Geographical Limitations

If applicable, you can also include a clause that states that the software is currently only intended for use in particular countries. This could be because the software is only suitable for the users located in your particular location or because you would like to restrict use of the software to a particular geographical area.

Privacy Considerations

Information that you collect from your users should be collected in line with your privacy policy which should be set out on your website and previously incorporated into this agreement.You should include details about where users’ information is stored, for example is it stored in servers in Australia or overseas? You should outline which measures you take to keep users’ information secure and you should take all steps necessary to ensure that user information is protected.

Subscription and Termination

You should outline that the user must pay a fee to use the subscription and if you a have trial or free period the details should be included in your terms. If you have a complicated subscription or membership structure you may want to set this out in a separate document on your website and incorporate it into the agreement in this section. This price list can then easily be updated without having to update the entire agreement (although you will still notify users of any price changes).

In this clause, you should grant a licence to the user to use the software once they have paid the subscription and their account is valid. This licence should only be granted whilst the user is subscribed to the software and should be revoked on the termination of the agreement and the subscription.

You can also include an option for users to update and alter their subscription levels at any time, for example, multi-account users may want to reduce the number of accounts they have for the service or change their subscription level. This will provide users with the option to update their subscription without having to create a new account or resubscribe to the service.

Conclusion

A well-written and detailed SaaS Agreement legally protects your business reducing issues with accounts and subscriptions later on. At LegalVision, our lawyers have worked closely with IT developers to assist them in expanding their businesses and guide them through many legal issues. If you are in need of legal advice, contact us on 1300 544 755 and speak with one of our experienced IT lawyers who have extensive experience drafting SaaS agreements.