SaaS Agreement Review: What to Check Before You Sign

SaaS agreements govern how you use software, what happens to your data, and what recourse you have when things go wrong. Most are written heavily in the vendor's favor. Whether you're subscribing to a $50/month tool or a $50,000/year platform, these are the clauses that matter.

Data Ownership and Portability

The most critical question in any SaaS agreement: who owns the data you put into the system? Many SaaS contracts grant the vendor a broad license to your data for 'service improvement' or 'aggregated analytics.' Always verify: you retain all IP rights to your data, the vendor's license is limited to providing the service, you can export all data in a standard format, and there's a defined data return period after termination.

SLA and Uptime Guarantees

Most SaaS vendors promise 99.9% uptime — but the devil is in the calculation. Check how they measure uptime (scheduled maintenance excluded?), what counts as a service credit event, whether credits are automatic or require you to file a claim, and if there's a cap on total credits (most limit to one month's fees). A 99.9% SLA allows 8.7 hours of downtime per year. A 99.5% SLA allows 43.8 hours.

Auto-Renewal and Termination

SaaS auto-renewal clauses are the single most common source of disputes. Many contracts auto-renew for the same term (often annual) with 30-90 day notice periods. Miss the window and you're locked in for another year. Look for: renewal notice period, whether pricing can increase on renewal, termination for convenience rights, and data retention post-termination. Always calendar the opt-out date immediately after signing.

Liability and Indemnification

Most SaaS agreements cap the vendor's liability at fees paid in the prior 12 months — meaning if their product causes $1M in damages but you only paid $10K, your recovery is limited to $10K. Check if there are carve-outs for data breaches, IP infringement, and willful misconduct. These should NOT be subject to the cap.

Red Flags to Watch For

  • ⚠Vendor claims license to use your data beyond service delivery
  • ⚠No data export capability or format specified
  • ⚠Auto-renewal with price increase allowed without notice
  • ⚠Liability cap with no carve-outs for data breaches
  • ⚠SLA credits require manual claim filing within 7 days
  • ⚠Termination for convenience requires 90+ day notice
  • ⚠Governing law in vendor's state with mandatory arbitration
  • ⚠Broad force majeure including 'internet disruptions'

Upload your SaaS agreement for instant AI analysis — know exactly what you're committing to.

Analyze a Contract Free

3 free analyses. No signup required.