Contract Management for SaaS
Manage your software as a service sales contracts with a tool designed specifically for you. From contract negotiation to ARR waterfall data.
Contract Management for SaaS – the process of contracting at scale
As you start to build your customer base contracting becomes are slow and difficult process. Every customer wants to work with their contract but it’s not a solution for you. Most SMEs and enterprise companies do not have procurement contracts that are fit for purpose in the SaaS world and agreeing to all of their terms opens you up to risk.
What makes software as a service contracts slow?
Things slow to a crawl in SaaS companies when you are doing something that isn’t scalable. The definition of not scalable is a process that is variable and has human intervention along the way. If your negotiating your SaaS contracts you’ll soon find that it’s difficult to scale this in any way.
Variations on IP clauses are common when you’re in the first few years of business. Your deliverables will be changing to find product market fit and this will mean you need to update IP clauses.
Transfer of IP
How and what IP you transfer to customers in your contracts is important. Your IP is your most important asset but your customer wants their deliverables too. It’s a fine line.
Requests for liability clauses will vary a lot depending on who you’re selling to. Smaller businesses might let you have no liability, others might ask for unlimited liability.
How to speed up
Speeding up your contract negotiations and the way you work with contract data is done with a combination of slowly moving to standardization and tracking your data.
Want to know more?
Building out an understanding of the in’s and out’s of contract negotiation and management early on will help create a base of sales agreements which not only improve your business and the data that you can access to drive it but also will improve the relationships that you have with your customers.
Intellectual Property Ownership in SaaS contracts
Most companies that you will be selling to are used to the old way of procuring software, ‘we buy it, we own it’. The legal world has been slow to catch up with the software as a service style of legal contract. They don’t understand that it is a service that you are providing rather than the intellectual property of the software itself. This opens you up to clauses in contracts that will transfer ownership of things you don’t want to transfer ownership of to your customers. More about IP Ownership in SaaS Contracts ->
When is it appropriate to transfer intellectual property in SaaS contracts?
Every SaaS company is different and every product works differently. There are some platforms that provide a service for which no intellectual property changes hands whatsoever, while other platforms has outputs which customers would like to maintain ownership of even after they have stopped using your software. In this case it is important that you work with your legal team to have these well defined so you’re not handing over intellectual property that you shouldn’t be.
Liability Limitations in SaaS Contracts
Liability limitations are by far the most contested thing in negotiations for software as a service contracts. They are effectively the dollar amount of liability that each party in the conversation could be responsible for if things went horribly wrong. And the difficulty with working though liability limitation is that the negotiation power of both sides is decidedly uneven. In most cases the negotiation will be between a small startup company and either a well established SME or an enterprise company that will lean on every reason they can to set the highest liability limitation possible. So what is a standard limitation of liability in a SaaS contract? Well, it depends. Learn more about limited liability in SaaS Contracts ->
What should the limitation of liability be for my contracts?
A commonly quoted industry standard is one times the annual value of the contract. But there are a lot of variations on this and it won’t always be the case. We get deeper into this in our blogs about negotiating liability limitations. Learn more about liability limits ->