Software as a Service (SaaS) Agreement
(Short Form) (Pro-Licensor)

Summary

This software as a service (SaaS) short form template is for an end user who wishes to eliminate its fixed and overhead costs for hardware and software by accessing applications from the licensor through the internet. This template includes practical guidance, drafting notes, and optional clauses. Software as a service provides software applications that are hosted by a supplier and made available to customers over the internet. Many software vendors now deploy their software through the cloud on a SaaS subscription model. Among other things, this reduces the risk of reverse engineering as licensees access a hosted application and have no access to code. One of the most critical aspects of drafting and negotiating this agreement is establishing appropriate service levels. Because the software and infrastructure are hosted by the provider, outside the control of the customer, service levels fulfill two main purposes: 1) assurance to the customer that it can rely on the services in its business, and 2) provision of agreed-upon benchmarks that facilitate the provider's continuous quality improvement process and provide incentives that encourage the provider to be diligent in addressing issues. This agreement includes a Service Level and Support Services Agreement as Exhibit that you may modify to comport with your client's needs. This template has been drafted with terms that favor the licensor of the services. For a short form SaaS agreement favoring the licensee, see Software as a Service (SaaS) Agreement (Short Form) (Pro-Licensee). For a short form SaaS agreement favoring the licensor, see Software as a Service (SaaS) Agreement (Short Form) (Pro-Licensor). For long form SaaS agreements, see Software as a Service (Saas) Agreement (Licensor) and Software as a Service (Saas) Agreement (Licensee). For more information on SaaS agreements and how to draft them, see Software as a Service (SaaS) Agreements and Software as a Service (SaaS) Agreement Checklist. For a discussion of cloud computing services and related legal issues, see Cloud-Based Outsourcing, Cloud Computing Agreements: Initial Considerations, and Cloud Computing Agreements: Drafting and Negotiating Effective Agreements. For additional guidance on SaaS agreements, see Computer Contracts § 1.08 and Computer Contracts § 4.12. For resources on IP-related tasks commonly encountered by in-house counsel, see In-House Intellectual Property & Technology Resource Kit. For resources on licensing intellectual property in general, see Intellectual Property Licensing Resource Kit.