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Experienced Technology Attorney Handling Complex SaaS Agreements

Experienced Technology Attorney Handling Complex SaaS Agreements

When it comes to technology service agreements, every deal is different and it should be treated as such. A complete analysis of the parties interested in the agreement should be done, which can include their individual deal objectives and the potential of future disputes. In technology service agreements, this is critical as it will minimize any risks associated with entering the deal. Making an unwise decision with respect to a term agreement or dispute resolution has the potential to cost thousands of dollars in unexpected expenses in the long run. Additionally, a hurried and careless drafting of statements of work and provisions that deal with intellectual property rights can have catastrophic consequences in the event of a dispute. 

Cloud computing and software as a service agreements (SaaS) are becoming increasingly common. With respect to SaaS deals, the general focus is not on licensing the product, rather it is more of what can be expected by using the product. A service level agreement (SLA) will cover issues such as level or responsiveness, speed, and uptime requirements. 

The Formulation of a Technology Service Agreements is Fundamental. An Experienced Attorney Can Help

Attorney John P. O’Brien’s approach to preparing technology and SaaS agreements is a twofold endeavour. Primarily, as an experienced litigator, Attorney O’Brien ensures to create several layers of protection for clients, including costs associated with having to enter litigation in an unexpected jurisdiction, or being obligated to litigate different types of inconvenient lawsuits. Additionally, Attorney O’Brien drafts agreements with the intention of increasing the value of his client’s endeavours, in relation to their intellectual property rights and profits and revenues generated from these agreements. 

Software as a Service Agreements (SaaS)

Legal issues that surround SaaS agreements are about as complex and dynamic as developing the software itself. When selecting the incorrect type of SaaS agreement, the consequences can be substantially damaging. In many cases, these damaging consequences can have a lasting effect on one’s ability to capitalize on the software; therefore, it is important to make correct decisions upfront. While technology contracts are becoming increasingly complex, their applicable legal theories still remain the same and understanding key issues of a SaaS agreement is critical to its success. 

Support Issues in a SaaS Agreement

When entering into a SaaS agreement, reliability from the SaaS technology is expected. SaaS customers will tend to seek service level agreements and strong support provisions that will give them comfort while providers will focus on limiting their liability. 

Like a vast majority of other technology agreements, SaaS contracts will often employ a wide range of contractual mechanisms to limit the provider’s liability. These provisions can include, but are not limited to:

  • Limitations on remedies,
  • Disclaimers of warranties, 
  • A limitation on the type of damages recoverable, and
  • A monetary cap on the provider’s liability. 

Other provisions can be added in a SaaS contract to limit the risk and offer the provider legal protections, which can include:

  • Force majeure clauses,
  • Governing law terms,
  • Ability to recover interest, attorney fees, and collection costs when having to force the contract against the customer

Additionally, SaaS contracts can allow a technology provider with the right to cancel or suspend the provision of services when there has been a breach of contract or a default by the customer. 

Indemnification

A majority of SaaS technology customers will seek a broad-form of indemnification from the provider on a variety of issues. Customers can seek to be indemnified from intellectual property claims made by third parties. Likewise, depending on the circumstance, a technology provider may seek to obtain indemnities from the customer based on the use of the service and the data being uploaded to the technology service. 

Similar to risk allocation clauses, indemnities will need to be negotiated and the SaaS provider will need to consider tailoring and narrowing the indemnification provided. Ideally, SaaS technology providers will need to limit their indemnification to the areas for which insurance has been obtained. Employing this tactic can provide funding if an indemnity claim arises. 

Data Privacy Clause in SaaS Contracts

Data and information security is usually the most important provision for customers evaluating SaaS contracts and technology providers. It is up to the technology provider to offer transparency in how they will protect the sensitive data of its SaaS customers. Most technology providers obtain certifications or other reports that are specifically designed to be shared with customers as part of the company’s marketing communications. 

Additionally, customers are usually concerned with data usage, and what the contract states about the provider’s right to use the customer’s data. SaaS technology providers can face customers who are subject to government-imposed regulations, particularly when it comes to the processing and storage of the customer’s data.

SaaS contracts will usually attempt to limit the provider’s liabilities when it comes to data related losses, which can include data corruption and data breaches. Additionally, many contacts contain clauses that are reflective of reality - there is no system that is completely secure from error in its operation or design. 

SaaS Contracts Demand Ingenuity

Developing a SaaS construct requires both parties to think outside the scope of routine contracts. By their very nature, SaaS contracts attempt to provide ease and comfort to the consumer while downplaying the risks and potential for liability to the provider. 

With the right planning and embarking on an effective communication strategy, providers and customers alike can build strong contracts that will help them manage the risks associated with the transaction. Working with an experienced technology attorney who is familiar with these complex contracts can be incredibly beneficial. A skilled technology attorney will provide options and utilize ambiguous language that can be used to overcome obstacles when negotiating a SaaS contract. 

Attorney John P. O’Brien has extensive experience in drafting Software as a Service (SaaS) Agreements for a wide range of clients, including small businesses and multi-million dollar enterprises. Attorney O’Brien is proficient in formulating, tirelessly negotiating, and aggressively executing these complex agreements. He understands the difficult nature of these contracts and the complexities associated with them. Consider scheduling a no-obligation consultation with Attorney John P. O’Brien at your earliest convenience. 

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About the Author:

John P. O'Brien - Technology Attorney


We represent buyers and sellers of IT products and services, cloud based SaaS offerings and software licensing matters. Whether you are contracting to purchase services, acting as a subcontractor, or looking to bring your application to market, our firm is well positioned to assist and guide you. Please contact me for a free consultation if you or the organization you work for is tired of trying to develop, negotiate and/or modify consulting contracts, licenses, SOWs, HR agreements and other business and related financial transactions.... View full business profile here: John P. O'Brien - Technology Attorney





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