Sample Software as a Service Agreement1 DATE: [date] PARTIES: (1) (2) [COMPANY NAME], a company incorporated in [England and

Wales] (registration number [number]) having its registered office at [address] (the Provider); and [COMPANY NAME], a company incorporated in [England and Wales] (registration number [number]) having its registered office at [address] (the Customer).

BACKGROUND: ... AGREEMENT: 1. 1.1 Definitions and interpretation In this Agreement: ... "Customer Materials" all works and materials: (a) uploaded to, stored on, processed using or transmitted via the Platform by or on behalf of the Customer or by any person or application or automated system using the Customer's account; and otherwise provided by the Customer to the Provider in connection with this Agreement;]

[(b)

[Defect means a defect, error or bug having [an / a materially] adverse effect on the appearance, operation or functionality of the Platform[, but excluding any defect, error or bug caused by or arising as a result of: (a) (b) an act or omission of the Customer, or an act or omission of one of the Customer's employees, officers, agents, suppliers or sub-contractors; or an incompatibility between the Platform and any other system, application, program or software not specified as compatible in Schedule [1]];]2

"Documentation" means the documentation produced by the Provider and [supplied / made available on the Platform] to the Customer specifying how the Platform should be used;
1 This standard Software as a Service (SaaS) Agreement template is designed for use by SaaS vendors and their business customers. SaaS refers to the making available of software-based services (collecting, processing, manipulating, transmitting and storing data) to customers by means of a software application or applications hosted remotely by or on behalf of the service provider. Saas takes a very wide variety of forms. The template is flexible, and may be adapted to favour the interest of one party, or to balance the two parties' interests. 2 See Clause 8.2(c) for the potential use of this definition.

... [Minimum Term means the period specified as such in Schedule [1];] Personal Data has the meaning given to it in the Data Protection Act 1998; "Permitted Purpose" means [define the purpose(s) for which the Platform may be used]; Platform means the software platform known as [name] that is owned and operated by the Provider, and that will be made available to the Client as a service via [the internet] under this Agreement; ... "Support Services" means support and maintenance services provided or to be provided by the Provider to the Customer in accordance with Schedule [2]; Term means the term of this Agreement; and Upgrades means new versions of, and updates to, the Platform, whether for the purpose of fixing an error, bug or other issue in the Platform or enhancing the functionality of the Platform. ... 2. ... 3. [3.1 The Platform The Provider will make available the Platform to the Customer by [setting up an account for the Customer on the Platform, and providing to the Customer login details for that account] [as soon as practicable / within [3] Business Days] following the Effective Date. OR 3.1 3.2 The Platform will automatically generate an account for the Customer promptly following the Effective Date, enabling the Customer to access the Platform.] Subject to the limitations set out in Clause [3.3] and the prohibitions set out in Clause [3.4], the Provider hereby grants to the Customer a non-exclusive licence to use the Platform for the Permitted Purpose [via any standard web browser / via [other means]] in accordance with the Documentation during the Term. The licence granted by the Provider to the Customer under Clause [3.2] is subject to the following limitations: [(a) the Platform may only be used by the named users identified in Schedule [1], providing that the Customer may change, add or remove a designated named user in accordance with the procedure set out therein;] Term

3.3

... [(e) [other limitations].]

... 3.9 The Customer must not use the Platform: (a) (b) 4. ... [4.2 The Provider may sub-contract the provision of any of the Support Services without obtaining the consent of the Customer. OR ... 5. ... [6. Trial period The first [number] [days / weeks / months] of the Term shall be a trial period, during which all of the provisions of this Agreement shall apply, save as follows: (a) (b) the Customer shall have no obligation to pay [the Charges]3 in respect of the trial period; either party may terminate the Agreement immediately by giving written notice to the other party at any time before the end of the trial period (in which case no liability to pay [any Charges] [in respect of Platform access or Support Services] will arise); and [other trial period conditions].] Customer Materials in any way that is unlawful, illegal, fraudulent or harmful; or in connection with any unlawful, illegal, fraudulent or harmful purpose or activity.

Support Services and Upgrades

(c) 7. ... 8. 8.1 8.2

Charges

Warranties The Customer warrants [and represents] to the Provider that it has the legal right and authority to enter into and perform its obligations under this Agreement. The Provider warrants [and represents] to the Customer: (a) (b) that it has the legal right and authority to enter into and perform its obligations under this Agreement; that it will perform its obligations under this Agreement with reasonable

Are all Charges waived during the trial period?

care and skill; (c) that the Platform [will operate without Defects and] will perform [substantially] in accordance with the Documentation (subject to any Upgrades); that the Platform will be hosted in accordance with the requirements set out in Schedule [1], and will be available to the Customer in accordance with the uptime commitments given in Schedule [2]; the Platform (excluding for the avoidance of doubt the Customer Materials) will not infringe any person's Intellectual Property Rights [in any jurisdiction and under any applicable law / in England and Wales and under English law];

(d)

[(e)

OR (e) the Platform (excluding for the avoidance of doubt the Customer Materials) will not: (i) (ii) (iii) breach any laws, statutes, regulations or legally-binding codes; infringe any person's Intellectual Property Rights or other legal rights; or give rise to any cause of action against the Provider or the Customer or any third party,

in each case [in any jurisdiction and under any applicable law / in England and Wales and under English law]; and] [(f) 8.3 the Platform is and will remain free from viruses and other malicious software programs.]

The Customer acknowledges that: [(a) complex software is never wholly free from defects, errors and bugs, and the Provider gives no warranty or representation that the Platform will be wholly free from such defects, errors and bugs;] the Provider does not warrant or represent that the Platform will be compatible with any application, program or software not specifically identified as compatible in Schedule [1]; and] the Provider will not and does not purport to provide any legal, taxation or accountancy advice under this Agreement or in relation to the Platform and (except to the extent expressly provided otherwise) the Provider does not warrant or represent that the Platform will not give rise to any civil or criminal legal liability on the part of the Customer or any other person.]4

[(b)

[(c)

... 9. ...
4 Contrast Clause 8.2(e). Ensure that these two clauses are not contradictory.

Indemnities

10. ... 11. ... 12. 12.1

Limitations and exclusions of liability

Data protection

Confidentiality The Provider will: (a) (b) keep confidential and not disclose the Customer Confidential Information to any person save as expressly permitted by this Clause [12]; protect the Customer Confidential Information against unauthorised disclosure by using the same degree of care as it takes to preserve and safeguard its own confidential information of a similar nature, being at least a reasonable degree of care; and without prejudice to the generality of Clause [12.1(b)], deploy and maintain the security systems and technologies detailed in Schedule [1] in relation to the Customer Confidential Information held on the Platform.]

[(c)

... 13. 13.1 Termination Either party may terminate this Agreement immediately by giving written notice to the other party if the other party: (a) commits any [material] breach of any term of this Agreement, [and: (i) (ii) the breach is not remediable; or the breach is remediable, but the other party fails to remedy the breach within [30] days of receipt of a written notice requiring it to do so; or]

[(b) ... 14. 14.1

persistently breaches the terms of this Agreement (irrespective of whether such breaches collectively constitute a material breach).]

Effects of termination Upon termination of this Agreement, all the provisions of this Agreement will cease to have effect, save that the following provisions of this Agreement will survive and continue to have effect (in accordance with their terms or otherwise indefinitely): Clauses [1, 7.5, 9, 10, 12, 14 and 17].

... 15. ... Notices

16. ... 17. ...

Force Majeure Event

General

The parties have indicated their acceptance of this Agreement by executing it below. EXECUTION:5 SIGNED by [name of signatory] duly authorised for and on behalf of the Provider

.................... Date: SIGNED by [name of signatory] duly authorised for and on behalf of the Customer

.................... Date:

These execution provisions are suitable for companies, but not for sole traders or small partnerships, for which the following provisions should be used: partnerships: SIGNED by the [name of partner] and [name of partner] for and on behalf of the [Customer/Provider]... sole traders: [SIGNED by [name of sole trader] trading as the [Customer/Provider]...

Schedule 1 Miscellaneous [Minimum Term The Minimum Term shall be the period of [90] [days] following the [Effective Date / the end of the trial period referred to in Clause [6]].] Platform specification [Insert description of the Platform.] The Platform will be designed to interface with the following systems, applications, programs and software: [insert details]. The Platform will comply with the following standards: [insert details]. The Platform will be hosted at a facility meeting the following requirements: [insert details]. The Platform will be protected using the following security systems and technologies: [insert details]. Licensing [Named users: [insert]] The Customer may add [or delete] named user licences by [method].] [Number of concurrent users: [insert] The Customer may add [or delete] concurrent user licences by [method].] [Where the Customer adds additional user licences, the Customer will be liable for additional access Charges under Schedule [3]. Where the Customer deletes user licences, the access Charges under Schedule [3] shall be reduced.]

Schedule 2 Service Level Agreement 1. 1.1 Introduction In this Schedule: "New Functionality" means new functionality that is introduced to the Platform by an Upgrade; and ["Protected Functionality" means [insert details of core functionality that must not be impaired by any Upgrade].] 1.2 2. ... 3. ... 4. ... 5. 5.1 Upgrades The Customer acknowledges that from time to time during the Term the Provider may apply Upgrades to the Platform, and that such Upgrades may, subject to Paragraph [5.2], result in changes the appearance and/or functionality of the Platform. No Upgrade shall Functionality.] disable, delete or [significantly] impair the Protected Limits on Support Services Response and resolution times References in this Schedule to Paragraphs are to the paragraphs of this Schedule, unless otherwise stated. Helpdesk

[5.2 [5.3

The Provider will give to the Customer [reasonable / at least [30 days']] prior written notice of the application of any [significant] Upgrade to the Platform. [Such notice shall include details of the specific changes to the functionality of the Platform resulting from the application of the Upgrade.]] The Customer shall not be subject to any additional Charges arising out of the application of the Upgrade[, save where: (a) (b) the Upgrade introduces New Functionality to the Platform; that New Functionality does not serve the same purpose as legacy functionality that ceases or has ceased to be available as a result of any Upgrade; access to or use of the New Functionality is chargeable to the customers of the Provider using the Platform generally; and any decision by the Customer not to pay the Charges for the New Functionality will not prejudice the Customer's access to and use of the

[5.4

(c) (d)

rest of the Platform.] 6. ... 7. ... 8. ... Scheduled maintenance Back-up and restoration Uptime commitment

Schedule 3 Charges6 ...

There are many different licensing and charging models that may suit a SaaS arrangement. This Schedule anticipates that licence fees will have a fixed and variable element, the latter dependent upon the number of licensed users. In addition, there will be a fee in respect of Support Services, which may be increased if the limitations on Support Services set out in Schedule 2 are exceeded. There is also provision for miscellaneous Charges.

Schedule 4 Acceptable Use Policy7 (1) This Policy

This Acceptable Use Policy (the Policy) sets out the rules governing the use of our web services [available via [URL]] (the Service) and any content that you may submit to the Service (Content). [By using the Service, you agree to the rules set out in this Policy / We will ask you to expressly agree to the rules set out in this Policy.] (2) General restrictions

You must not use the Service in any way that causes, or may cause, damage to the Service or impairment of the availability or accessibility of the Service, or any of the areas of, or services on, the Service. You must not use the Service: (a) (b) [(3) in any way that is unlawful, illegal, fraudulent or harmful; or in connection with any unlawful, illegal, fraudulent or harmful purpose or activity. Licence

You grant to us a worldwide, irrevocable, non-exclusive, royalty-free licence to use, reproduce, publish, [adapt, translate] and distribute your Content [on and in relation to the Service / in any existing and future media]. You also grant to us the right to sublicense these rights[, and the right to bring an action for infringement of these rights].]8 ... [(18) Report abuse If you become aware of any material on the Service that contravenes this Policy, [you must / please] notify us [by email / using the abuse reporting system on the Service].]

This is a sample document, containing selected sections from SEQ Legal's template software as a service (SaaS) agreement (standard version). Ellipses indicate omitted sections. You can purchase a complete SaaS agreement template from: http://www.website-contracts.co.uk/acatalog/saas_contracts.html

The appropriateness of the specific terms of this acceptable use policy will depend very much on the nature of the service being provided. In many cases you will be able to significantly shorten it, and in some cases do without it altogether. Where all Content will be covered by the licence of rights in Customer Materials in Clause 8, this may be omitted.