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Software as a Service Contract

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SOFTWARE AS A SERVICE CONTRACT

This Software as a Service Contract (the "Agreement") is entered into as of by and between Provider Name: with principal place of business at and Client Name: with principal place of business at .

RECITALS

WHEREAS, Provider is in the business of hosting, maintaining and providing access to software applications through an Internet-based service offering (the "Services"); and

WHEREAS, Client desires to obtain access to and use the Services, and Provider agrees to provide the Services to Client, subject to the terms and conditions set forth herein.

WHEREAS, the parties desire to set forth their respective rights and obligations with respect to the provision and use of the Services.

NOW, THEREFORE, in consideration of the mutual covenants contained herein, the parties agree as follows:

1. Definitions

In this Agreement, capitalized terms have the meanings set forth below. "Services" means the software-as-a-service offerings, related API access, hosting, maintenance, and support as described in Section 2 and any statement of work. "Documentation" means Provider's user guides and technical documentation made available to Client. "Confidential Information" means nonpublic information disclosed by a party that is identified as confidential or that reasonably should be understood to be confidential.

2. Services; License and Access

2.1 Services. Provider will make the Services available to Client as described in the Services Description below and in the Documentation, subject to the terms of this Agreement.

2.2 License. Subject to Client's compliance with this Agreement and payment of Fees, Provider grants Client a limited, non-exclusive, non-transferable right to access and use the Services for Client's internal business purposes during the Term.

2.3 Restrictions. Client will not: (a) reverse engineer, decompile or disassemble the Services; (b) copy or reproduce the Services except as expressly permitted in this Agreement; (c) use the Services to develop a competing product; or (d) permit third parties to access the Services other than as permitted by Provider in writing.

3. Service Levels and Support

4. Fees and Payment

5. Term and Termination

5.1 Term. The initial term of this Agreement will commence on the Effective Date and continue for months (the "Initial Term"), unless earlier terminated in accordance with this Agreement.

5.2 Termination for Cause. Either party may terminate this Agreement upon written notice if the other party materially breaches this Agreement and fails to cure the breach within days after receiving written notice.

6. Confidentiality

The receiving party will not disclose Confidential Information except to its employees or contractors who have a need to know and who are bound by confidentiality obligations no less protective than this Agreement. Confidential Information will be returned or destroyed upon termination, except as required by applicable law or for archival backup purposes where it remains subject to confidentiality obligations.

7. Data Protection and Security

Provider will implement and maintain administrative, physical and technical safeguards reasonably designed to protect Client Data from unauthorized access, disclosure, alteration or destruction. Provider will notify Client of a confirmed data breach affecting Client Data within days of discovery.

8. Intellectual Property

Provider retains all right, title and interest in and to the Services, Documentation, and Provider's pre-existing software, tools, and know-how. Client retains all right, title and interest in and to Client Data. Provider is granted a limited license to use Client Data solely to provide the Services and perform its obligations under this Agreement.

9. Warranties; Disclaimers

Provider warrants that it will provide the Services in a professional manner consistent with industry standards. EXCEPT FOR THE EXPRESS WARRANTY SET FORTH IN THIS SECTION, THE SERVICES ARE PROVIDED "AS IS" AND PROVIDER DISCLAIMS ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR NON-INFRINGEMENT.

10. Limitation of Liability

Except for liability arising from a party's gross negligence, willful misconduct, or breach of confidentiality or indemnification obligations, neither party's aggregate liability for all claims arising under this Agreement will exceed the greater of (a) the total Fees paid or payable by Client to Provider under this Agreement in the twelve (12) months preceding the claim, or (b) .

11. Indemnification

Each party will indemnify, defend and hold harmless the other party from any third-party claims arising from the indemnifying party's breach of this Agreement, negligence, or willful misconduct, subject to the indemnified party providing prompt written notice and reasonable cooperation in the defense.

12. Audit Rights

Provider may audit Client's use of the Services to verify compliance with this Agreement, upon reasonable prior notice and during normal business hours. If any audit reveals underpayment, Client will promptly pay the shortfall and audit costs if underpayment exceeds five percent (5%) of the amount due.

13. Notices

Notices must be sent to the addresses above by certified mail, overnight courier, or email with confirmation of receipt, and are effective upon receipt.

14. Amendments; Waiver

No amendment or waiver of any provision of this Agreement will be effective unless in a written instrument signed by both parties. The failure of either party to enforce any right will not constitute a waiver of that right or any other right.

15. Governing Law; Venue

This Agreement will be governed by and construed in accordance with the laws of without regard to its conflict of laws principles. The parties submit to the exclusive jurisdiction of the state and federal courts located in the chosen jurisdiction for any dispute arising out of this Agreement.

16. Entire Agreement; Severability

This Agreement, including any exhibits and statements of work, constitutes the entire agreement between the parties and supersedes all prior or contemporaneous agreements, proposals, and communications, whether written or oral. If any provision of this Agreement is held invalid or unenforceable, the remaining provisions will remain in full force and effect.

17. Miscellaneous

17.1 Assignment. Neither party may assign this Agreement without the other party's prior written consent, except that Provider may assign to a successor in connection with a merger or sale of substantially all of its assets.

17.2 Force Majeure. Neither party will be liable for delays or failures due to causes beyond its reasonable control, provided that the affected party uses commercially reasonable efforts to resume performance.

17.3 Counterparts; Electronic Signatures. This Agreement may be executed in counterparts and by electronic signature, each of which will be deemed an original.

Signatures

Provider:

By:

Date:

Client:

By:

Date:

Enter text✕

What a Software as a Service Contract Is

A Software as a Service Contract (SaaS Contract) is a written agreement that defines the delivery, use, support, and data-treatment terms for software hosted by a provider and accessed remotely by customers. It sets license scope, service levels, uptime commitments, data handling and security obligations, fees and payment terms, support and maintenance responsibilities, intellectual property rights, confidentiality, indemnities, and termination and transition provisions.

Why a Clear SaaS Contract Matters

A well-drafted SaaS Contract clarifies expectations about uptime, data ownership, security, and liability, reducing disputes and operational risk. It also establishes the legal basis for electronic execution under federal and state e-signature frameworks such as the ESIGN Act (15 U.S.C. ch. 96) and the Uniform Electronic Transactions Act (UETA).

Why a Clear SaaS Contract Matters

Who Typically Prepares and Signs SaaS Contracts

Different roles interact with a SaaS Contract at various stages: procurement and legal draft, IT/security review, finance approval, and executive sign-off.

  • Procurement and Vendor Managers: Draft and negotiate commercial terms, pricing, and service levels with vendor representatives.
  • Legal and Compliance Teams: Review liability, indemnity, data processing, and contract language to ensure regulatory compliance.
  • IT and Security Teams: Validate security controls, audit rights, encryption obligations, and data residency requirements.

Final signing authority varies by organization but typically rests with legal counsel, a designated officer, or a delegated procurement signatory.

Authorized Signers and Their Roles

General Counsel

The General Counsel or delegated lawyer typically approves legal terms and signs for liability and IP commitments. They confirm the agreement fits corporate policy and that signature authority is documented in corporate records.

Chief Financial Officer

The CFO or an authorized finance officer signs to bind payment, billing, and budgetary obligations. Their sign-off confirms fee schedules, invoicing cadence, and any customer credit terms.

Core Sections to Include in a Professional SaaS Contract

A complete contract groups operational, legal, financial, and technical obligations into clear sections so both parties can manage performance and risk without ambiguity.

License Grant

Describe permitted users, scope (single-tenant vs multi-tenant), usage restrictions, and limits such as API call or seat allowances in precise terms to avoid scope disputes.

Service Levels

Set measurable uptime targets, maintenance windows, credit remedies, and reporting obligations for outages and performance monitoring.

Data Security & Privacy

Specify encryption, access controls, breach notification timings, BAA terms where applicable, and obligations for handling regulated data subject to HIPAA or other laws.

Support and Maintenance

Define support tiers, response and resolution timeframes, patching policies, and how updates or upgrades are delivered and communicated.

Fees and Payment

Explain pricing model (subscription, per-user, consumption), billing cadence, taxes, late fees, and any usage metering or reconciliation process.

Termination and Transition

Include termination rights, data return or deletion procedures, export formats, and any transition assistance with associated fees and timelines.

Security and Compliance Items to Verify

In-transit Encryption: TLS 1.2 / 1.3
At-rest Encryption: AES-256 encryption
Audit Standards: SOC 2 Type II available
Regulatory Compliance: HIPAA (BAA required)
FDA / 21 CFR: 21 CFR Part 11 support
Certification: ISO 27001 certified

Step-by-Step: Complete a SaaS Contract

Follow these sequential steps to prepare, negotiate, and execute a SaaS Contract with clarity and legal enforceability.

  • 01
    Prepare Draft: Collect requirements, scope, and required attachments.
  • 02
    Internal Review: Legal, finance, and security review and markups.
  • 03
    Negotiate Terms: Exchange edits, confirm SLAs, and finalize commercial terms.
  • 04
    Execute Electronically: Use an ESIGN-compliant eSignature solution for signature capture.

How to Configure an Online Signing Workflow

Configure a digital workflow to collect signatures, apply authentication, and preserve an audit trail for enforceability and recordkeeping.

Field Configuration
Signature Field Assign to specific signer with required date
Authentication Use email link or SMS code
Conditional Fields Display based on prior answers
Reminder Settings Auto-reminders and expiration dates

Digital Signing and Delivery Requirements

Choose a platform that supports the authentication, audit trail, and integrations your contract workflow requires.

  • Integrations: Salesforce, NetSuite, Microsoft 365
  • File Formats: PDF, DOCX, HTML, Excel
  • Advanced Auth: SMS, KBA, SSO

Ensure the chosen solution preserves a tamper-evident audit trail, supports required compliance frameworks, and can export signed records in standard formats.

Typical eSigning Flow for a SaaS Contract

A predictable signing flow reduces delays and preserves evidence required for legal enforceability.

  • Upload: Sender uploads final contract document.
  • Place Fields: Add signature, date, and initial fields.
  • Authenticate: Select signer authentication strength.
  • Execute: Signers receive link and complete signing.

Key Dates and Notice Deadlines to Track

Track effective dates, renewal windows, notice periods, and payment due dates to avoid unintended renewals or breaches.

Effective Date:

Date obligations begin (MM/DD/YYYY).

Payment Due:

Invoice due within stated net terms.

Renewal Notice:

Notice required to decline renewal.

Termination Notice:

Advance written notice required to terminate.

Data Return Deadline:

Deadline for returning or deleting customer data.

Contract Lifecycle Milestones

Milestones guide the contract from negotiation through post-termination responsibilities and support compliance with notice and data obligations.

01

Drafting

Prepare full draft with exhibits and security appendices.

02

Negotiation

Exchange redlines and finalize SLA metrics.

03

Execution

Obtain authorized signatures and archive signed copy.

04

Transition

Deliver exit plan and data export upon termination.

Common Mistakes to Avoid When Preparing a SaaS Contract

  • Leaving service levels vague, which makes outage remedies unenforceable and increases dispute risk.
  • Failing to specify data ownership and export formats, causing delays during termination and audits.
  • Omitting encryption or breach-notification commitments, which can impede regulatory compliance and incident response.
  • Using inconsistent signature authority records, which can render a signature unenforceable in a dispute.

Penalties and Legal Risks of Errors or Noncompliance

Tax Reporting Penalties: 1099 penalties $60–$330 per form (IRC §6721)
Data Breach Fines: HIPAA fines and corrective action (45 CFR §§160–164)
I-9 Violations: $281–$2,789 per violation (8 CFR §274a.2)
Intentional Disregard: $660+ per form, no cap (IRC §6721)
Contractual Damages: Liquidated or consequential damages if specified
Enforceability Risk: Improper signature authority may void agreement

How a SaaS Contract Differs from a Traditional License

Compare high-level differences so you choose the correct document type for cloud-delivered software versus installed software licenses.

Criteria SaaS Contract Software License Agreement
Delivery Model hosted perpetual install
Support included subscription optional maintenance
Data Access vendor controls platform customer controls local copy
Updates automatic updates customer-managed updates

eSignature Vendor Pricing and Feature Comparison

Compare starter pricing and basic feature availability across common eSignature vendors; signNow is listed first per platform data guidance.

signNow DocuSign Adobe Sign PandaDoc HelloSign
Starting Price $8/user/mo $15/user/mo $14/user/mo $19/user/mo $15/user/mo
Free Trial 7-day trial Varies Varies Varies Varies
Bulk Send Yes Yes Yes Yes No
Audit Trail Yes Yes Yes Yes Yes
HIPAA Compliant Yes Yes Yes No No
Envelope Cap No cap 100 envelopes/user/year Varies Varies Varies

Real-World Examples of SaaS Contract Use

Examples show how organizations reduce turnaround time and maintain compliance using remote contract execution.

Optica Ventures LLC — COO

The interface is simple and easy-to-use for our team.

  • Reduced turnaround on investor docs by several days.
  • The usability improvement made external counterparties more likely to complete execution without follow-up calls, improving deal velocity and record consistency.

Fertility Centers of Illinois — Founder

API and integration simplified clinical workflows.

  • Enabled secure patient consent capture.
  • The platform supported HIPAA-compliant workflows and allowed the organization to collect signatures reliably across mobile and desktop environments, reducing administrative backlog.

Practical Tips for Accurate and Efficient Contracts

Adopt consistent templates, clear approval paths, and automated reminders to reduce errors and accelerate signatures.

Use Standardized Templates
Maintain approved templates for common arrangements and pre-approved legal clauses to reduce negotiation time and ensure consistency.
Define Signatory Authority
Keep a delegation of authority record and require verification of signing permissions before finalizing an agreement.
Collect Audit Evidence
Preserve signed PDFs and an audit trail showing timestamps, IP addresses, and signer authentication events for legal proof.
Document Data Handling
Attach data processing schedules and BAAs when handling regulated data to meet HIPAA and privacy obligations.

Frequently Asked Questions About SaaS Contracts

Answers to common questions about signing, validity, data, and practical execution steps when using electronic workflows.


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