SaaS Contract Management

As a corporate SaaS lawyer, I want to dive into two common types of agreements that drive the tech world: Software as a Service (SaaS) Agreements and Professional Services Agreements (PSAs). Let's break them down: A) Software as a Service (SaaS) Agreements These govern cloud-based software accessible via the internet, revolutionizing how we interact with technology. Key features include: -User limits and prohibited actions: SaaS Agreements outline restrictions like sharing access or reverse engineering, protecting the vendor's IP. -Service Level Agreements (SLAs): These guarantee uptime, support availability, and response times, ensuring reliable service. -Data ownership and security: Critical provisions define data ownership, post-contract data handling, and breach protocols. In today's data-driven world, these can't be overlooked. -Subscription-based pricing: Typically monthly or yearly, allowing for flexibility. -Users should understand renewal processes and potential price changes. B) Professional Services Agreements (PSAs) Covering skilled services like consulting and data analysis, PSAs focus on project completion and deliverables. Notable aspects include: -Statement of Work (SOW): This detailed document outlines project scope, deliverables, timelines, and performance metrics. -Performance specifics: PSAs address service location, deliverable ownership, and acceptance criteria, preventing misunderstandings. -Flexible payment structures: Options range from prepayment and hourly rates to fixed-price or milestone-based payments, adapting to project needs. -Work product ownership: Clear terms on who owns what and when ownership transfers are crucial, especially for IP-intensive projects. Understanding these agreements is vital in our tech-driven landscape. As technology evolves, so do these agreements. They're not just legal documents – they're the foundation for innovation and collaboration in our digital age. B Clear, well-structured agreements prevent disputes and protect all parties' interests. They're the unsung heroes of the tech world, enabling the seamless service delivery we've come to expect in modern business. Remember, in the fast-paced tech industry, knowledge of these agreements isn't just useful – it's essential. #legaltech #innovation #law #business #learning

I was recently reached out to in my DMs And asked about legal tips for early-stage SaaS startups. So here's what I suggest to founders. When you’re building something new, Legal always feels like a "later" problem. You’re chasing product-market fit Not policies and clauses. But if you’re building a SaaS platform, especially in India,  There are a few legal foundations you simply can’t ignore. You need legal coverage on two fronts: • Your website • Your product 1 // For the Website Terms of Service (ToS) & Privacy Policy • Make these easy to find and crystal clear • Address DPDPA compliance: how you collect, store, and share data • Include clauses on user data deletion, redressal contacts, and policy updates 2 // For the Product a) SaaS Agreement / Master Services Agreement (MSA) • Covers licensing, payments, SLAs, uptime, and liability limits • Standardize billing, cancellations, and dispute resolution • For Indian clients: follow recurring payment compliance and authentication norms b) IP Protection • Trademark or copyright your software, logo, and branding early • Ensure all employee and contractor-created IP is transferred to the company • Use explicit assignment clauses - not vague "work for hire" language 3 // If You’re Building with Others Co-founder Agreement • Define ownership, equity vesting, and exit scenarios • Clarify who owns code, customer data, and responsibilities • Be clear on exits, dissolutions, and disputes 4 // If You’re Signing Partnership Deals or Integrations Get Your Legal Agreements • For major clients/integrations - go beyond templates. Have a legal advisor. • Review vendor and partnership contracts for compliance, liability, and indemnity • Use NDAs and service agreements before sharing sensitive info 5 // General Legal Essentials for Indian SaaS Startups a) Business Registration • Register with MCA for compliance and legitimacy • Follow the Shops and Establishment Act if you have an office b) Tax Compliance • Register for GST if revenue or transactions cross the threshold • Set up recurring billing in line with Indian tax/payment rules c) Employee & Contractor Agreements • Use flexible agreements with IP assignment, confidentiality, and non-solicit clauses • Update as your team and product scale And here's a quick checklist: • Terms of Service & Privacy Policy (India + global ready) • SaaS Agreement or MSA with SLAs • Registered business + founder agreements • IP assignment clauses across all hires/vendors • NDAs + compliance-ready for partners • Billing and taxes aligned to Indian law • Regular legal reviews as you grow Simple, clean docs. Made for clarity. Built for growth. And that’s all you need to start. --- ✍ Tell me below: What’s one legal document you’ve been putting off - but know you need to sort out?

I'm wrapping up another quarter negotiating SaaS deals, and for one deal, I was debating what term length to pursue. (Contract term length has become one of our most critical strategic decisions in procurement.) 🔹 The Current Landscape 🔹 The market has shifted dramatically. SaaS contract lengths plummeted in 2023 and have only slightly rebounded in 2024 (still averaging under 15 months). Meanwhile, price uplifts have soared to unprecedented levels. 3-15% is now standard, with some vendors pushing shocking increases (just heard from a fellow procurement leader facing a 200% increase on a multi-million dollar spend... ouch). 🔹 The Pendulum Swing 🔹 I'm seeing two distinct approaches emerge: Some companies have instituted strict policies capping contracts at 12 months (too many got burned in 2022 with oversized multi-year commitments). Others still pursue 3+ year terms to maximize discounts and shield themselves from those aggressive annual uplifts. 🔹 My Portfolio Breakdown 🔹 Looking at deals I've personally negotiated over the past few months: 1-year terms: 56% 2-year terms: 31% 3-year terms: 7% < 1-year terms: 6% > 3-year terms: 0% Surprisingly, 2-year deals weren't higher. For me, they often hit a sweet spot: enough leverage for better pricing, reasonable commitment timeframe, and price protection for 24 months without being locked in forever. 🔹 My Decision Framework 🔹 While every situation demands nuance, here's my general approach: 1-Year Terms When: 🔸 New vendor (even thorough due diligence has blind spots) 🔸Highly competitive market (optionality is a beautiful thing) 🔸Rapidly evolving space (avoid lock-in with outdated tech) 🔸Low switching costs (maybe we go in another direction). 🔸Current vendor with performance issues or pricing concerns (goal here is to start shopping alternatives) 2-Year Terms When: 🔸Stable, predictable growth projections for seats/usage 🔸Balanced need for pricing leverage vs. flexibility 🔸Vendor relationship is solid but not critical infrastructure 3-Year Terms When: 🔸Core enterprise systems (sticky, difficult to replace) 🔸Vendors with consistent, aggressive YoY increases that are hard to push back on (although sometimes we pivot to a 1 year deal to switch to someone else). 🔸 We've validated long-term fit and negotiated favorable terms (partnership). I know everyone loves a three year term but if it's pushed to hard (by either procurement or sales), it can hurt trust. The dataset isn't massive but interesting not the less. Anything surprise you here?

This is the SaaS equivalent of a customer walking into a restaurant, ordering a steak, eating half of it, and then saying, “Actually, I wanted chicken. Can I get half my money back?” As the Nasdaq moves into correction territory, this might be something that begins happening more often: Companies will tighten budgets, and some will come back mid-contract, asking to reduce their user count. If you’re not prepared, you either: - Cave and let them reduce (killing ARR) - Play hardball and say no (risking churn) The better move? A structured “give & get” approach that keeps revenue predictable while creating a win-win. Here’s how: 1. Anchor to the original agreement When customers ask for a reduction, start by reinforcing why they got the pricing they did. If they received discounts based on a multi-year term or user volume, make that clear. “Your current pricing reflects a commitment to X users over Y years. If we adjust that, we’d need to revisit the rate.” Most won’t want to pay more per user, which gives you leverage for alternatives. 2. Offer alternative levers Instead of an outright reduction, steer them toward options that protect long-term revenue: - Swap for other products – Reallocate spend to new features/modules they haven’t adopted yet. - Extend the contract – Reduce short-term cost in exchange for a longer commitment. - Adjust payment terms – Offer quarterly vs. annual billing to ease cash flow without reducing ARR. - Usage review & optimization – Help them ensure all licenses are being used before reducing. 3. Keep the relationship, not just the revenue Customers remember how vendors treated them in tough times. If you take a hard stance without flexibility, they’re gone at renewal. If you accommodate too much, they’ll expect it every time. The balance? - Be firm on contract integrity. - Be flexible in how value is delivered. The best companies trade reductions for future growth. If you let a customer shrink today, do it in a way that locks in expansion tomorrow.

Nothing hurts Procurement more than spiralling costs. This document shows the surging cost of software in 2025. Here's some red flags when it comes to Software as a service (Saas) contracts and what to do about it: ➡️ Auto-renewals. Negotiate for... ↳ A minimum 60-90 day written renewal notice ↳ The right to opt out or renegotiate at renewal ↳ Removal of the clause outright ☝ Prevents lock-in at inflated rates & gives you leverage at renewal ➡️ Unclear data ownership. Ensure... ↳ Explicit statement my organisation owns its data ↳ The right to export data any time, in a usable format ↳ Data destruction & sanitisation confirmation post termination ☝ Protects your IP & ensures business continuity in vendor exits. It's your data, you SHOULD own it. ➡️ True up & true down restrictions. Enable... ↳ Flexible licence adjustments without penalties ↳ No minimum user thresholds or excessive step-ups ↳ Prorated pricing for partial terms & usage ☝ Keeps your Saas aligned with actual business needs, vital in today's volatile environment. ➡️ Unreasonable yearly increases. Negotiate... ↳ Fixed pricing over the contract term ↳ A cap on any annual uplifts (pegged to CPI to keep it fair) ↳ Discounts for multi-year commitments or upfront payments ☝ Keeps your long-term costs predictable and avoids budget surprises ➡️ Uncompetitive pricing. Ensure... ↳ The right to benchmark pricing against market standards annually ↳ Most Favoured Nation (MFN) clauses, ensuring you get terms no less favourable than any comparable client ☝️Keeps your rates favourable and competitive over time ➡️ Misaligned costs versus actual use. Insist on... ↳ Clear, unambiguous definitions of billable units ↳ Grace thresholds or tolerance limits before additional fees kick in ↳ Favourable true-up terms (e.g. annual reconciliation vs monthly) ☝ Stops vendors penalising you unfairly for growth. ➡️ Unclear exit & transition clauses Build in... ↳ Vendor obligation to assist in data migration (at reasonable rates) ↳ Continued access to data for a set period post-termination (e.g. 90 days) ↳ Clear documentation detailing handover obligations ☝ Ensures a clean, controlled exit & mitigates vendor lock-in ➡️ Permanent tie in Request... ↳ A termination for convenience clause with a 30-90 day notice ↳ Pro-rata refunds for prepaid but unused services ☝ Gives you agility to pivot if business priorities change. Why should Saas treated any differently to anything else you buy? Any others to add? _______ P.S. want to know the true cost of Saas inflation to your business in 2025? Need something to convince your IT stakeholders? I've got a must read FREE 🎁 to download Saas inflation report here 👇 https://lnkd.in/eiJh_zQm Saas vendors will hate me for sharing this. Repost if you found this helpful ♻️