Does Your SaaS License Protect You Against Service Interruptions?

SaaS License Agreement: Software As A Service FAQsWhen you’re selling software as a service (SaaS), sometimes there’s going to be interruptions in that service to your software customers. And these interruptions are often outside of your control.

Third-Party Cloud Platform Hosting

For example, let’s say you use a third-party platform like Amazon AWS or Microsoft Azure. From time to time, that platform will be down temporarily (e.g., maintenance), which will limit your customers’ ability to access your SaaS.

Although these downtimes are rare with reputable third-party cloud platforms, they do happen.
And you don’t want to be liable for these interruptions to your SaaS subscribers.

That’s why it’s important for your SaaS subscription license to (1) disclose to customers that such outages can occur and (2) disclaim or limit your liability for these interruptions.

Are there other types of SaaS service interruptions you want to address in your software license?

Of course.

Unforeseen Catastrophes

For instance, a force majeure (Act of God) clause can be used to protect you in situations where an unforeseen event (e.g., pandemic, fire, hurricane, etc.) makes it impossible for you to perform temporarily or permanently.

Data Loss or Corruption

When disclaiming or limiting liability, it’s important to consider the scope of potential damage that can be caused and address it accordingly.

Let’s say the third-party platform you use gets hacked despite security measures and your customer’s data is lost or damaged. To the extent permitted by applicable law, you want to make it clear you’re not liable to your SaaS customers for such data loss.

Where To Get SaaS License Help

An experienced software lawyer can fix the service interruption issue in your SaaS agreement and other legal dangers that come with licensing software as a service. If you need help, the first step would be to set up a phone consultation with Software Lawyer Mike Young.

Author Mike Young, Esq.

Mike Young has been practicing business and technology law since 1994 and is an angel investor in startups. He's been an entrepreneur since 1988. To get legal help from Attorney Young, click here now or call 214-546-4247 to schedule a phone consultation.

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