Last updated on 01 July 2022 by Sara Pegarella (Law school graduate, B.A. in English/Writing. In-house writer at TermsFeed)
Legal agreements are very important for all apps, but perhaps especially so for a SaaS app.
These agreements will be where you include information about things like subscription costs, payment terms, user privacy, restrictions on the use of your app, and a range of other topics.
SaaS apps operate by providing a license to a user to interact with and use the software interface in exchange for the purchase of a subscription plan.
Our Terms and Conditions Generator makes it easy to create a Terms and Conditions agreement for your business. Just follow these steps:
Enter the email address where you'd like the T&C delivered and click "Generate."
You'll be able to instantly access and download the Terms & Conditions agreement.
Here's an example of a table of contents from a Terms and Conditions of Use that shows common categories found within these agreements.
Note: You don't need to include a table of contents with your Terms and Conditions. This image is just to show a visual summary of topics commonly included in a policy.
Note how this table of contents from Spotify's Terms and Conditions of Use page includes categories like:
The following clauses are incredibly important and commonly found in Terms and Conditions agreements for SaaS apps across industries:
This clause lets users know that you will not be liable for certain things that can happen as the result of using the app, such as lost profits, lost data, computer failures and other types of damages.
It's an important clause to include so that your users will agree to not hold you responsible or attempt to hold you responsible if something happens.
Here's an example of a clause in the Salesforce's Terms of Service page that limits liability:
It's important for you to maintain control over your SaaS app, and part of this control is in your "Termination of Use" or "Termination" clause.
This clause is where you reserve the right to terminate any account or any user's access to your app. You can include information about what user activity would trigger a termination, as well as reserve a general right to terminate for any cause you deem fit.
Note how Oracle states that it "may, in its sole discretion, at any time, terminate or limit" account access. Issues that specifically trigger a potential termination are listed, including infringement of copyrights.
The "Termination" clause in Dropbox's Terms of Service page lets users know that Dropbox can terminate a user's account at any time and that a user can also stop using the services at any time and terminate her account.
Specific information that could affect a user's account activation is included like letting a user know that if an account goes unused for 12 consecutive months, it may be deleted.
DocuSign has a "Term and Termination" clause where information is further broken down by category. Termination by subscribers is separate from termination by DocuSign, which helps draw attention to each section:
A section about when a term begins as well as how automatic term renewals work are included in this section:
The final paragraph in this clause informs users about what will happen to their accounts upon termination, including information about fees, accessibility, and rights and responsibilities of both parties:
The most important thing to include in this clause is your right to terminate an account at your discretion.
Most SaaS apps have some sort of fee and payment structure where users can pay different prices depending on which subscription level they've selected or signed up for.
For example, Dropbox lets users get billed yearly or monthly:
Dropbox also has a business plan with different prices per month, with different prices per user:
Offering different plans and subscriptions to your SaaS service means that you'll want to make sure your users know exactly what their responsibilities are when it comes to paying your fees. This will keep your customers happy and keep your income flowing.
Box includes a "Fees and Payments" clause where there's a separate section for fees and one for payments.
The "Fees" section includes information about how changes in fees will affect a user, what cancelling an account means when it comes to fees that still remain, and other relevant information:
The "Payment" section discusses when billing will occur, what form of payment is accepted, refund information, late fees and collections:
This clause is where you let your users know how they should pay when they should pay, and what happens if they don't pay.
A Terms and Conditions agreement provides information to your users so they're aware of what their rights, restrictions, and obligations are.
An "Acceptable Use" clause is where you can explicitly let your users know what actions and activities they're expected to not do when it comes to your SaaS app.
Here's an example of an "Acceptable Use" clause from Box:
As you can see, these clauses tend to be very in-depth, long and robust. Some common things included in these clauses include a ban on the following:
While you don't have to include absolutely everything that you forbid, it's a good idea to include a very thorough list and then also include a sentence that retains your right of discretion to decide if something is acceptable or not if a question arises.
Dropbox includes a clause titled "Your Responsibilities" where users are informed that they must comply with Dropbox's Acceptable Use Policy:
This separate policy is simply a list of what uses Dropbox doesn't allow. It's similar to the material that Box includes in its "Acceptable Use" clause.
While Dropbox could have included this text directly within an "Acceptable" Use clause, keeping it separate helps it stand out and draws attention to it.
Your Copyright Policy clause will protect your own property rights and the rights of your users.
Make it clear that users cannot "post, modify, distribute or reproduce in any way copyrighted or other proprietary materials without obtaining the prior written consent of the copyright owner."
You should also provide a way for users to report claims of copyright infringement to you.
Cisco includes a list of what needs to be provided, in writing, in order to report a copyright infringement violation, and also includes a mailing and email address where the notice can be sent:
While some copyright clauses may be short and basic, other SaaS apps require more in-depth and extensive information to be provided.
Many businesses prefer arbitration over litigation for a number of reasons. If you wish to be able to enforce mandatory arbitration in the event that someone sues you, you will need to include an arbitration clause in your Terms and Conditions.
DocuSign includes information about arbitration and other legal issues in its Terms and Conditions in a "Mandatory Arbitration" clause with a number of sub-sections.
The very first sentence of this clause is in all capital letters and very clearly and concisely states that "any controversy or claim arising out of or relating to this agreement, DocuSign signature or the site will be resolved by binding arbitration conducted before one arbitrator, rather than in court."
Remember, the Terms and Conditions is where you put forth as much information as possible that your user needs to know and needs to agree to abide by when using your app.
The nature of SaaS is that you're likely collecting and using a lot of personal information from your users including payment information, home address, and full name details, and so on.
The summaries give a general overview of the topic, letting a user know that "when you purchase salesforce.com's applications or services, the Company will ask you to provide billing information," and that "salesforce.com may use the information collected to improve the Company's Web sites and Services."
When a user clicks on the links to find out additional information, she's given more detailed information about the summarized points, such as:
"When purchasing the Services or registering for an event, Salesforce may also require you to provide the Company with financial qualification and billing information such as billing name and address, credit card number, and the number of employees within the organization that you will be using the Services. Salesforce may also ask you to provide additional information, such as company annual revenues, the number of employees, or industry."
You can see the difference there between the summary version and the full version. However, so long as you are letting users know what information you collect and how you do so, even in basic and simple, straightforward terms, you'll be compliant.
Dropbox lets users know with whom information is shared with by providing a short summary phrase and additional details.
The first sentence says that information will not be sold to advertisers or other third parties, but that information may be shared with parties including others working for Dropbox (including third parties), other users, other applications, and for legal compliance:
Remember to not only let users know how you will be using their information but how any third parties will be, as well.
If your SaaS app engages in tracking via cookies or other tracking technologies, or allows a third party to do so, CalOPPA (The California Online Privacy Protection Act) requires that you disclose this tracking to your users, as well as provide a way for a user to opt out of this tracking.
This Do Not Track requirement helps provide transparency for your users who wish to maintain a greater control over their privacy.
Oracle lets users know that they are able to opt out of certain types of cookies through the cookies preference tool, and that these preferences must be set again on different browsers or computers. A link is then provided to their Cookie Preferences page:
DocuSign provides opt-out links for a number of different services that help users remove cookies and tracking.
Their "California Do Not Track Disclosure" information is included in its own clearly-titled section where users are informed that no browser-initiated Do Not Track signals are recognized at the moment due to industry standards not being finalized yet.
Those are the 9 basic legal clauses that no SaaS app legal agreement collection should be without.
These 6 belong in your Terms and Conditions:
This article is not a substitute for professional legal advice. This article does not create an attorney-client relationship, nor is it a solicitation to offer legal advice.
01 July 2022