SaaS Agreement: How to draft the Software and Services clause

When drafting your Software as a Service (“SaaS”) agreement, it is important to set out the services you are providing, how the services can be accessed and any technical requirements that the user must meet to be allowed access to the software. You may also want to indicate any technical constraints that you would like to place on the use of the software, or you may wish to provide added flexibility and include a clause to allow users to request customised software. This is something that you may want to take advantage of in the future to increase or vary sales for your business.

Define the scope of service

It is important to include a detailed and accurate description of the services you are providing through your software, as these are the services you are agreeing to provide to users and will form part of your obligations under the agreement.

Requirements to access the software

You should include in detail the way in which the software is provided to the user and how they can access the software. For example, what are the requirements for users to access the software?

• Do they have to have a subscription to use the software (paid or free)?
• Do they have to apply to use the software?
• Do they have to create an online account or profile?
• Is there any particular type of computer or operating system they are required to have to use the software?

Software Development or Customisation Agreement

You may have detailed requirements if your software is specialised for a particular industry or task and this can be included in the software and services clause of your agreement. You may also want to include in this clause, the option for your users to have the software customised to meet their particular business or personal needs. It is common for many businesses to use software as a service subscriptions. Programs which manage accounting and time sheets, scheduling or provide other business solutions could be customised for a particular business or industry. For example, an accounting application could be customised to the restaurant industry. You should include in the agreement that if such a customisation was to take place, that a separate software development agreement will be entered into with the user. This agreement will outline how the software will be customised, the associated costs and time frame. Furthermore, the agreement for customisation should also clearly indicate who owns the intellectual property in the customisation. If it is for a particular industry, you may want to retain the rights to use the intellectual property so you can on sell this to other businesses in the same industry. If you are interested in having a software development or customisation agreement drafted, please contact us for more information.

Conclusion

Having a detailed and well-drafted SaaS agreement can reduce customer complaints and issues for your business in the future. This agreement also legally protects your business and your software. At LegalVision, we work with online and IT businesses on a regular basis. If you would like assistance drafting your SaaS agreement or if we can assist you with any other agreements you may need in relation to your software, contact us on 1300 544 755 and speak with one of our IT lawyers.