How to create contracts for a SaaS startup



Getting started with your first B2B SaaS contract can be an expensive and frustrating process. As a founder you’ll need to know how to create contracts for a SaaS startup as well as be involved in the negotiation of the first contracts for customers that you onboard. This is more often than not a fast and difficult learning curve. You’ll have to balance the need to a SaaS contract that specifically outlines the service that you are providing, the cost of creating this and the requirements of your customers as you go though the contract negotiation process.

We’ve collected together four of the fastest ways to get up and running with your first SaaS contract and detailed the pro’s and con’s of each method. The goal is to help startup founders get quickly started with something that often chews up a lot of time when there are many more competing requests on your time.

  1. Build a new contract from scratch

    Building a new contract from scratch is the best way to get contracts that align with the needs of your business. You’ll be able to outline clear definitions of outputs, intellectual property ownership and other nuanced things about your platform. This can be very useful when you have parts of your platform that may be quite custom such as fair use policies, policies around what can and can’t be uploaded to your platform or specifics that change depending on the pricing tiers that customers may purchase.

    The downside of this approach is that it will be much more expensive to create a contract from scratch than any other option. Not just expensive but also time intensive. You’ll need to account for the extra time that needs to be invested to get lawyers to understand the nuances that they are building clauses for.

    create contracts for a SaaS startup

  2. Use a contract template and customize it

    This is one of the fastest and easiest ways to create contracts for a SaaS startup from scratch. There are plenty of services out there that offer free or paid options for downloading a template that will stand up as an effective piece of legal contracting for a SaaS product. The one thing to be very aware of with this is that, unless you are a legal professional, which a lot of startup founders are not, you may have limited understanding of the clauses that are in the contract and how these can cause issues for your business in the future.

    It is worth getting a legal professional to review the template that you have found to give you feedback on whether or not it is appropriate for your business. Keep in mind that every product is different and there are risks to just taking a template off a website and punching in your contract details.

  3. Hire a freelancer

    Hiring a freelancer can be a useful intermediate point between building from scratch and using a template. There are plenty of legal services on sites like Upwork who will be able to help to build out your software as a service contract. Many will offer to build it from scratch but I have found that for a lot of these services it’s easier to provide them with a template and have them make it fit for purpose.

    Key things that you should check when using a service like this is the credentials and reviews of those people that you are looking to work with. Having experience working in your country and/or jurisdiction is essential and an understanding of software as a service contracts is also non-negotiable.

  4. Push to use a work order

    This is almost always easier said than done when working with enterprise software as a service contracts. The use of a work order will usually mean that you have a simple one or two page document which will outline the product and the timeframe of the contract (much like a statement of work) and this work order will reference your terms and conditions that you have on your website.

    This is usually only appropriate when you have a product to which a user can sign up to a trial or a free tier (to signify their acceptance of the terms and conditions by the use of the website) and it more often than not will only work when you are dealing with the small to medium end of the customer scale. Why? Because usually larger customers want more bespoke agreements in the format of a master service agreement instead of generic terms and conditions on a website. This is often a good route to go if you are looking to move down market later in your companies growth.