What is SaaS Legal Partnership Agreement?

In SaaS (Software as a Service), a legal partnership agreement is essentially an enforceable contract that delineates the operational parameters of your corporation or business relationship between one, but more often two entities involved in the SaaS industry.

This agreement will explain the legal rights, responsibilities and obligations of each party as it pertains to developing, marketing, selling or supporting a SaaS product/service.

These liaisons bring about legal complications that require careful consideration and a detail-oriented legal agreement that should include:

• Confidentiality: Highly proprietary details and sensitive business information shared amongst the partners should be safeguarded to prevent leaks and maintain trust.
• Dispute Resolution: A plan to resolve any type of conflict should be specific so there are no legal disputes. This should include how to resolve conflicts through negotiation, mediation, and/or arbitration.
• Intellectual Property: To protect everyone in the partnership, the right to ownership and usage for anything created and used during the legal relationship should be both well-established and outlined.
• Scope: To avoid any mishaps, the roles, responsibilities and expectations should be specific in nature and clearly spelled out in legal terms.
• Termination: Outline all conditions for ending the agreement and which procedures to follow. 

SaaS and Software companies typically use various payment models for partnerships, including the following:

• Revenue Sharing: Partners share an agreed upon percentage of generated revenue, with incentives for both parties.
• Referral Fees: To encourage lead generation, each partner receives a commission for referring customers to the other party.
• Fixed Fees: To state the obvious, a set fee is paid for specific services, setting clear expectations for clarity.
• Subscription Fees: Focusing on both scalability and flexibility, recurring fees are paid for access to software products or services.

The best option will rely on the extent of the partnership and each company’s individual goals.

Yes, a SaaS agreement is a type of license agreement. It allows buyers the right to use the software under specific spelled-out terms to which they agree.

The customer’s rights and limitations regarding software usage should be both fully distinguished and understood to avoid any disputes.

They are specific conditions used in contracts that are designed to protect the partnership.  Some common terms include:

• Acceptable Use Policy (AUP): To be clear and to prevent any misuse or abuse of the software, specific details showing what is permissible and what is prohibited are outlined.
• Data Processing Agreement (DPA): To safeguard user privacy, personal data handling and how it is addressed with data protection regulations is defined.
• Indemnification: To protect both parties’ interests, assigned liability for possible damages or risk are identified.
• Service Level Agreement (SLA): To set proper expectations, the SLA defines the expected performance and availability, and other SaaS metrics found necessary to define.

You could use a template, but consulting an attorney who specializes in SaaS and technology law is advised to confirm the agreement is tailored to your business needs and that compliance with relevant laws is outlined in the contract.