SaaS agreement template

Managing contracts effectively is crucial for businesses – especially for those providing or using software as a service (SaaS). Fortunately, a well-structured SaaS agreement template can streamline this process, ensuring clarity and compliance while saving time and reducing legal risks. This article covers the essentials of SaaS agreements, their purpose, management, and how Juro can automate and enhance the SaaS contract management process.

What is a software as a service agreement?

A software as a service (SaaS) agreement is a contract between a SaaS provider and a customer that outlines the terms of the software’s use. 

This agreement defines the relationship between the provider and the customer, specifying rights, responsibilities and obligations for both parties. It ensures that both the SaaS provider and the customer are on the same page when it comes to how the software can be used, the level of support provided and the expectations for service quality.

What is the purpose of a software as a service agreement?

The primary purpose of a SaaS agreement is to establish clear guidelines and expectations. It helps to:

• Detail the specific services the provider will deliver and the functionalities the software will offer.
• Specify how the software can be used, who can use it and any usage limitations or restrictions.
• Include detailed information on subscription fees, billing cycles, payment methods and consequences for late payments.
• Address how customer data will be handled, stored and protected, ensuring compliance with relevant laws and regulations.
• Commit to certain performance metrics, uptime guarantees and response times for support requests, usually using a service level agreement service level agreement (SLA).
• Clarify ownership of the software, any licensed elements and the protection of proprietary information.
• Outline conditions under which the agreement can be terminated and processes for resolving disputes.

Who manages software as a service agreements?

Managing SaaS agreements typically involves several key roles within an organization, depending on the end-users and the cost of the platform.

Legal professionals are responsible for drafting, reviewing and negotiating the terms of SaaS agreements. They ensure compliance with relevant laws and regulations, address risk management and protect the company’s interests.

The procurement team oversees the acquisition of SaaS services. They manage vendor relationships, evaluate service offerings and ensure that the agreements align with the company's procurement policies and budgets.

IT professionals evaluate the technical aspects of the SaaS solutions. They ensure compatibility with existing systems, assess security measures and manage implementation and integration.

Specialists in compliance and risk management make sure that the SaaS agreements meet regulatory requirements and company policies. They identify and mitigate risks associated with data privacy, security and compliance.

Finance teams manage the financial aspects of SaaS agreements, handling costs analysis, budgeting and financial reporting related to the services.

End-user departments – such as marketing, sales or HR – may initiate the need for SaaS solutions. They work with the above teams to define requirements, assess usability and ensure the solution meets their operational needs.

Dedicated vendor managers or contract managers may be responsible for ongoing relationship management with SaaS providers, monitoring performance and managing renewals or terminations.

Effective SaaS agreement management requires collaboration between these different roles to maximize the benefits of the SaaS solutions while minimizing potential risks and costs.

When are SaaS agreements used?

SaaS agreements are used whenever a company provides or subscribes to software services delivered over the internet. This includes:

• Subscription-based software services, whereby users pay a recurring fee for continued access.
• Cloud-based applications, which are hosted on the provider’s servers and accessed over the internet, such as CRM systems, project management tools and HR platforms.
• Business-critical applications that support essential operations, requiring clear terms to ensure reliability and support.

What should a SaaS agreement template include?

A comprehensive SaaS agreement template should cover the following elements:

Parties involved. Clearly identify the provider and the customer.

Definitions. Define key terms used in the agreement to avoid ambiguity.

Scope of services. Detail the software services provided, including specific features and functionalities.

User rights and restrictions. Specify who can use the software and any usage limitations – such as the number of users or devices.

Pricing and payment terms. Outline costs, billing cycles, payment methods and penalties for late payments.

Service levels and support. Define performance metrics, uptime guarantees and terms for customer support, including response times and support channels.

Data protection and privacy. Include clauses on data security, privacy policies, compliance with regulations like GDPR, and the handling of personal data.

Intellectual property rights. Clarify ownership of the software and any related intellectual property, including customer data and any customizations or integrations.

Confidentiality. Ensure both parties agree to protect confidential information, detailing what constitutes confidential information and the obligations to protect it.

Termination clauses. Detail conditions under which the agreement can be terminated, including breaches of contract, and the consequences of termination, such as data retrieval or continued access to certain services.

Dispute resolution. Provide mechanisms for resolving conflicts – such as mediation or arbitration – and specify the jurisdiction and governing law for the agreement.

How are SaaS contracts typically managed?

Managing SaaS contracts manually involves several steps that require attention to detail, collaboration, and effective communication among various stakeholders. Here’s an overview of the typical manual process:

1. Identification of needs: A specific department identifies the need for a SaaS solution and submits a request. The requesting department outlines the features, functionalities and specific requirements needed.
2. Vendor selection: The procurement team conducts market research on potential SaaS providers, compares offerings, and narrows down a list of suitable vendors. Requests for proposals (RFPs) are sent to selected vendors to gather detailed proposals. Proposals are reviewed and evaluated based on criteria such as cost, features, security and vendor reputation.
3. Contract drafting: The legal team drafts the initial version of the contract, incorporating the company's standard terms and conditions. The draft is shared with the procurement team, IT department and other stakeholders for review and input. The contract is sent to the vendor, and negotiations take place to finalize terms, pricing, service levels and other key aspects.
4. Approval and signing: The final draft of the contract is circulated among relevant internal stakeholders (legal, finance, IT and department heads) for approval. Once approved, the contract is signed by authorized representatives from both the company and the vendor.
5. Implementation and onboarding: The IT department and the requesting department project manage the implementation of the SaaS solution, in coordination with the vendor. End-users receive training on how to use the new system and necessary data is migrated to the new system as applicable.
6. Ongoing management: The vendor’s performance is monitored against agreed service levels. Any issues or breaches of contract terms are addressed by the legal or procurement team. Approaching contract end dates are tracked, and decisions are made regarding renewals or terminations. The finance team ensures that payments are made as per the contract terms.
7. Documentation and record-keeping: A central contract repository (often physical or a basic digital system like spreadsheets or shared drives) is maintained to store all contract documents. Access to contract documents is controlled to ensure security and confidentiality. Regular audits are conducted to ensure contract compliance with internal policies and external regulations.

Automate SaaS agreements with Juro

Managing SaaS contracts manually is labour-intensive and prone to errors, especially with high volumes of contracts. It requires meticulous coordination and communication among various teams to ensure that all aspects of the contract lifecycle are properly handled.

Juro can significantly streamline and improve the management of SaaS contracts through its AI-native contract management platform. Here’s how Juro can help:

Centralized contract repository

• Storage. Juro provides a secure, centralized repository for all contracts, making it easy to store, organize and retrieve SaaS agreements.
• Search. Advanced search capabilities (OCR) allow users to quickly find specific contracts or clauses, reducing time spent on manual searches.

Automated workflows

• Drafting and approval. Juro automates the contract drafting process using templates and AI-driven drafting tools. Approval workflows can be customized to ensure that all necessary stakeholders review and approve contracts efficiently.
• Negotiation. Collaborative features enable real-time negotiation and editing within the platform, reducing the back-and-forth typically involved in email exchanges.

Compliance and risk management

• Standardization. Templates and clause libraries ensure that all SaaS contracts adhere to company standards and regulatory requirements.
• Audit trails. Juro maintains detailed audit trails of all actions taken on a contract, providing transparency and aiding compliance efforts.

Renewal and expiry management

• Automated reminders. Juro tracks key dates such as renewal and expiry dates and sends automated reminders to relevant stakeholders, ensuring no critical deadlines are missed.
• Dashboard insights. Visual contract dashboards provide insights into statuses, upcoming renewals and potential risks.

Integration with existing tools

• Seamless Integration: Juro integrates with popular tools like Salesforce, Sage, Microsoft Teams, Slack and Google Drive, allowing teams to manage contracts from the systems they already use.
• Data synchronization. Integration ensures that contract data is consistently updated across platforms, improving data accuracy and accessibility.

Self-serve capabilities

• Empower business teams. Juro enables business teams to self-serve on contract creation and management, reducing the burden on legal and procurement teams.
• Guided contract creation. Users can create contracts using guided workflows and pre-approved templates, ensuring compliance without needing extensive legal oversight.

Collaboration and communication

• Unified workspace: Juro provides a single, browser-native workspace where all stakeholders can collaborate on contracts – from drafting to finalization.
• Commenting and tagging. In-platform commenting and tagging features facilitate communication and ensure that all relevant feedback is captured and addressed.

By leveraging Juro’s AI-native contract management platform, organizations can streamline their SaaS contract management processes, reduce manual errors, ensure compliance and enhance overall efficiency. This allows teams to focus on strategic activities rather than getting bogged down by administrative tasks.

Juro's AI-native contract automation platform empowers all teams to create, agree, execute and manage contracts up to 10x faster than traditional tools. To find out more, hit the button below to book your personalized demo.