SaaS Agreement (SMB)

SAAS SUBSCRIPTION AGREEMENT — SMALL AND MEDIUM BUSINESS

Agreement Number: [________________________________]
Effective Date: [__/__/____]

TABLE OF CONTENTS

1. Parties
2. Definitions
3. License Grant and Access
4. Service Description
5. Fees and Payment
6. Free Trial
7. Customer Data and Privacy
8. Intellectual Property
9. Confidentiality
10. Warranties and Disclaimers
11. Limitation of Liability
12. Term and Auto-Renewal
13. Termination
14. Governing Law and Dispute Resolution
15. General Provisions
16. Signatures
17. Order Form

1. PARTIES

Provider ("Provider" or "Company"):
Name: [________________________________]
Address: [________________________________]
City, State, ZIP: [________________________________]
Contact Person: [________________________________]
Email: [________________________________]
Phone: [________________________________]

Customer ("Customer" or "Subscriber"):
Name: [________________________________]
Address: [________________________________]
City, State, ZIP: [________________________________]
Contact Person: [________________________________]
Email: [________________________________]
Phone: [________________________________]

2. DEFINITIONS

As used in this Agreement, the following terms have the meanings set forth below:

2.1 "Affiliate" means any entity that directly or indirectly controls, is controlled by, or is under common control with a party.

2.2 "Authorized Users" means the individuals authorized by Customer to access and use the Service, not to exceed the number specified in the Order Form.

2.3 "Confidential Information" means all non-public information disclosed by one party to the other, whether oral, written, or electronic, that is designated as confidential or that reasonably should be understood to be confidential given the nature of the information.

2.4 "Customer Data" means all data, information, and materials submitted, uploaded, or transmitted to the Service by Customer or its Authorized Users.

2.5 "Documentation" means the user guides, online help, release notes, training materials, and other documentation provided by Provider regarding the Service.

2.6 "Effective Date" means the date set forth above or the date the Order Form is executed, whichever is earlier.

2.7 "Error" means a reproducible failure of the Service to perform substantially in accordance with the Documentation.

2.8 "Fees" means the amounts payable by Customer for use of the Service as specified in the Order Form.

2.9 "Free Trial Period" means the period during which Customer may use the Service at no charge, as specified in Section 6.

2.10 "Initial Term" means the initial subscription period specified in the Order Form.

2.11 "Intellectual Property Rights" means all patents, copyrights, trademarks, trade secrets, and other intellectual property rights worldwide.

2.12 "Order Form" means the ordering document attached hereto as Section 17, specifying the Service, number of Authorized Users, Fees, and other commercial terms.

2.13 "Personal Data" means any information relating to an identified or identifiable natural person, as defined under applicable data protection laws.

2.14 "Renewal Term" means each successive subscription period following the Initial Term.

2.15 "Service" means the cloud-based software application(s) provided by Provider as specified in the Order Form and Documentation.

2.16 "Service Level Agreement (SLA)" means the service availability and performance commitments set forth in Appendix A, if applicable.

2.17 "Subscription Term" means the Initial Term together with any Renewal Terms.

2.18 "Third-Party Services" means any third-party products, services, or integrations that interoperate with the Service but are not provided by Provider.

2.19 "Usage Data" means anonymized, aggregated data derived from Customer's use of the Service that does not identify Customer or any individual.

3. LICENSE GRANT AND ACCESS

3.1 License Grant. Subject to the terms of this Agreement and payment of applicable Fees, Provider grants Customer a non-exclusive, non-transferable, non-sublicensable right to access and use the Service during the Subscription Term solely for Customer's internal business purposes.

3.2 Authorized Users. Customer may permit its Authorized Users to access the Service, up to the number specified in the Order Form. Customer is responsible for all activity occurring under its account and shall ensure Authorized Users comply with this Agreement.

3.3 Restrictions. Customer shall not, and shall not permit any third party to:

(a) Copy, modify, or create derivative works of the Service;
(b) Reverse engineer, disassemble, or decompile the Service;
(c) Sublicense, sell, lease, or transfer access to the Service;
(d) Use the Service to develop a competing product;
(e) Circumvent any technical limitations or access controls;
(f) Use the Service in violation of applicable law; or
(g) Transmit malicious code, viruses, or harmful content through the Service.

3.4 Account Security. Customer shall:

(a) Maintain the confidentiality of login credentials;
(b) Use commercially reasonable security measures;
(c) Notify Provider promptly of any unauthorized access; and
(d) Not share login credentials among multiple individuals unless the subscription plan permits shared accounts.

4. SERVICE DESCRIPTION

4.1 Service. Provider shall make the Service available to Customer in accordance with this Agreement and the Documentation. The specific features and functionality are described in the Order Form and Documentation.

4.2 Updates and Modifications. Provider may update, modify, or enhance the Service from time to time. Provider shall use commercially reasonable efforts to notify Customer of material changes. Provider shall not materially diminish the core functionality of the Service during the Subscription Term.

4.3 Support. Provider shall provide the following support:

☐ Email support during business hours
☐ Phone support during business hours
☐ 24/7 support
☐ Chat support
☐ Community forum support
☐ Dedicated account manager
☐ Other: [________________________________]

Response time targets:

4.4 Service Availability. Provider shall use commercially reasonable efforts to maintain Service availability of [____]% uptime, measured monthly, excluding scheduled maintenance. If Provider fails to meet the uptime commitment for [____] consecutive months, Customer may terminate this Agreement upon [____] days' written notice.

4.5 Scheduled Maintenance. Provider shall provide Customer with at least [____] hours' notice of scheduled maintenance windows. Provider shall use commercially reasonable efforts to schedule maintenance during off-peak hours.

5. FEES AND PAYMENT

5.1 Subscription Fees.

☐ Monthly Subscription: $[________________________________] per month
☐ Annual Subscription: $[________________________________] per year (billed ☐ monthly ☐ annually ☐ quarterly)
☐ Per-User Pricing: $[________________________________] per user per month/year
☐ Tiered Pricing: Per the pricing schedule in the Order Form

5.2 Payment Terms. All Fees are due and payable within [____] days of invoice date. Fees are stated in U.S. dollars unless otherwise specified in the Order Form.

5.3 Payment Methods.

☐ Credit card (auto-charged on billing date)
☐ ACH/bank transfer
☐ Check
☐ Wire transfer
☐ Other: [________________________________]

5.4 Late Payment. Overdue amounts bear interest at the lesser of [____]% per month or the maximum rate permitted by applicable law. Provider may suspend access to the Service after [____] days of non-payment, provided Provider gives Customer at least [____] days' prior written notice.

5.5 Taxes. Fees exclude all taxes, levies, and duties. Customer is responsible for all applicable taxes, excluding taxes based on Provider's net income.

5.6 Price Increases. Provider may increase Fees for Renewal Terms upon at least [____] days' written notice prior to the start of the applicable Renewal Term. Increases shall not exceed [____]% per Renewal Term unless mutually agreed.

5.7 Disputes. If Customer disputes any portion of an invoice in good faith, Customer shall pay the undisputed amount and provide written notice of the dispute within [____] days of receipt. The parties shall negotiate in good faith to resolve the dispute.

6. FREE TRIAL

6.1 Trial Period. If indicated on the Order Form, Customer may use the Service free of charge for a period of [____] days commencing on the date of account activation (the "Free Trial Period").

6.2 Trial Scope. During the Free Trial Period:

(a) Customer may access ☐ all features ☐ limited features of the Service;
(b) The number of Authorized Users is limited to [____];
(c) Storage is limited to [____] GB; and
(d) All provisions of this Agreement apply, except payment obligations.

6.3 Conversion to Paid Subscription.

☐ At the end of the Free Trial Period, Customer's account will automatically convert to a paid subscription unless Customer cancels before the trial expires. Customer will be charged the Fees specified in the Order Form. Provider shall provide conspicuous notice of the conversion terms before the trial begins.
☐ At the end of the Free Trial Period, the Service will be deactivated unless Customer affirmatively subscribes.

6.4 Trial Data. If Customer does not convert to a paid subscription, Provider shall retain Customer Data for [____] days following the end of the Free Trial Period, after which Customer Data may be permanently deleted.

6.5 Free Trial Disclaimer. THE SERVICE DURING THE FREE TRIAL PERIOD IS PROVIDED "AS IS" WITHOUT WARRANTY OF ANY KIND. PROVIDER'S LIABILITY DURING THE FREE TRIAL PERIOD SHALL NOT EXCEED $[____].

7. CUSTOMER DATA AND PRIVACY

7.1 Ownership. Customer retains all rights, title, and interest in and to Customer Data. Provider acquires no rights in Customer Data except the limited rights granted herein.

7.2 License to Customer Data. Customer grants Provider a non-exclusive, worldwide license to host, store, process, and display Customer Data solely as necessary to provide the Service and fulfill Provider's obligations under this Agreement.

7.3 Data Security. Provider shall implement and maintain reasonable administrative, technical, and physical safeguards designed to protect Customer Data, including:

(a) Encryption of data in transit (TLS 1.2 or higher) and at rest (AES-256 or equivalent);
(b) Access controls and authentication mechanisms;
(c) Regular security assessments and penetration testing;
(d) Incident response procedures; and
(e) Employee security training.

7.4 Data Breach Notification. Provider shall notify Customer of any confirmed unauthorized access to Customer Data within [____] hours of becoming aware of the breach. Notification shall include:

(a) Nature and scope of the breach;
(b) Type of data affected;
(c) Steps taken to mitigate the breach; and
(d) Recommended actions for Customer.

7.5 Data Processing. If Provider processes Personal Data on behalf of Customer, the parties shall execute a Data Processing Addendum ("DPA") ☐ attached hereto ☐ available at [________________________________].

7.6 Data Location. Customer Data shall be stored in: ☐ United States ☐ European Union ☐ Customer's choice ☐ Other: [________________________________].

7.7 Data Return and Deletion. Upon termination or expiration, Provider shall:

(a) Make Customer Data available for export in a standard format for [____] days; and
(b) Delete all Customer Data within [____] days following the export period, unless retention is required by law.

7.8 Usage Data. Provider may collect and use Usage Data for product improvement, analytics, and benchmarking, provided that Usage Data is anonymized and aggregated and cannot identify Customer or any individual.

8. INTELLECTUAL PROPERTY

8.1 Provider IP. Provider retains all Intellectual Property Rights in the Service, Documentation, and any improvements, modifications, or derivative works thereof. Nothing in this Agreement transfers ownership of Provider's intellectual property to Customer.

8.2 Customer IP. Customer retains all Intellectual Property Rights in Customer Data and any pre-existing materials provided by Customer.

8.3 Feedback. If Customer provides suggestions, ideas, or other feedback regarding the Service ("Feedback"), Customer grants Provider a perpetual, irrevocable, worldwide, royalty-free license to use, incorporate, and commercialize such Feedback without restriction.

8.4 IP Indemnification. Provider shall defend, indemnify, and hold harmless Customer from any third-party claim alleging that the Service infringes such third party's Intellectual Property Rights, provided that:

(a) Customer promptly notifies Provider of the claim;
(b) Provider has sole control of the defense and settlement; and
(c) Customer provides reasonable cooperation.

If the Service is found to infringe, Provider may, at its option: (i) obtain a license for continued use; (ii) modify the Service to be non-infringing; or (iii) if neither (i) nor (ii) is commercially practicable, terminate this Agreement and refund prepaid Fees for the unused portion of the Subscription Term.

9. CONFIDENTIALITY

9.1 Obligations. Each party shall: (a) use Confidential Information only to perform its obligations under this Agreement; (b) protect Confidential Information using at least the same degree of care it uses for its own confidential information, but no less than reasonable care; and (c) not disclose Confidential Information to third parties except to employees, contractors, and advisors with a need to know who are bound by confidentiality obligations at least as protective as those herein.

9.2 Exclusions. Confidential Information does not include information that: (a) is or becomes publicly available without breach; (b) was known to the receiving party prior to disclosure; (c) is independently developed without use of Confidential Information; or (d) is received from a third party without restriction.

9.3 Compelled Disclosure. A party may disclose Confidential Information if required by law, regulation, or court order, provided the disclosing party gives the other party prompt notice (to the extent legally permissible) and cooperates in seeking protective treatment.

9.4 Trade Secrets. Provider's trade secrets, including the Service's source code, algorithms, and architecture, are Confidential Information. Customer acknowledges that unauthorized disclosure may cause irreparable harm, entitling Provider to injunctive relief without proof of actual damages or posting of bond, consistent with the Defend Trade Secrets Act (18 U.S.C. § 1836).

9.5 Return of Materials. Upon termination, each party shall return or destroy all Confidential Information of the other party, except as required by law or internal compliance policies.

10. WARRANTIES AND DISCLAIMERS

10.1 Provider Warranties. Provider warrants that:

(a) The Service will perform substantially in accordance with the Documentation;
(b) Provider has the authority to enter into this Agreement and grant the rights herein;
(c) The Service will be provided in compliance with applicable laws;
(d) Provider will not knowingly introduce malicious code into the Service; and
(e) Support services will be provided in a professional and workmanlike manner.

10.2 Customer Warranties. Customer warrants that:

(a) Customer has the authority to enter into this Agreement;
(b) Customer Data does not infringe any third-party rights;
(c) Customer's use of the Service will comply with applicable laws; and
(d) Customer has obtained all necessary consents for the collection and processing of Personal Data submitted to the Service.

10.3 Warranty Remedy. If the Service fails to conform to the warranty in Section 10.1(a), Provider shall use commercially reasonable efforts to correct the non-conformity. If Provider cannot correct the non-conformity within [____] days, Customer may terminate this Agreement and receive a pro-rata refund of prepaid Fees.

10.4 DISCLAIMER. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, THE SERVICE IS PROVIDED "AS IS" AND "AS AVAILABLE." PROVIDER DISCLAIMS ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND NON-INFRINGEMENT. PROVIDER DOES NOT WARRANT THAT THE SERVICE WILL BE UNINTERRUPTED, ERROR-FREE, OR SECURE. THIS DISCLAIMER IS CONSISTENT WITH UCC § 2-316 AND § 2-719 REGARDING CONTRACTUAL LIMITATION OF WARRANTIES AND REMEDIES.

11. LIMITATION OF LIABILITY

11.1 Exclusion of Consequential Damages. EXCEPT FOR (a) BREACHES OF SECTION 3.3 (RESTRICTIONS), (b) BREACHES OF SECTION 9 (CONFIDENTIALITY), (c) INDEMNIFICATION OBLIGATIONS, OR (d) WILLFUL MISCONDUCT OR FRAUD, NEITHER PARTY SHALL BE LIABLE FOR ANY INDIRECT, INCIDENTAL, SPECIAL, CONSEQUENTIAL, OR PUNITIVE DAMAGES, INCLUDING LOST PROFITS, LOST DATA, OR BUSINESS INTERRUPTION, REGARDLESS OF THE THEORY OF LIABILITY.

11.2 Cap on Liability. EXCEPT FOR THE EXCLUSIONS IN SECTION 11.1, EACH PARTY'S TOTAL AGGREGATE LIABILITY UNDER THIS AGREEMENT SHALL NOT EXCEED:

☐ The total Fees paid or payable by Customer during the [____] months preceding the claim
☐ $[________________________________]
☐ Other: [________________________________]

11.3 Essential Basis. The parties acknowledge that the limitations of liability in this Section reflect a reasonable allocation of risk and are an essential basis of the bargain between the parties. This Agreement would not have been entered into without these limitations.

12. TERM AND AUTO-RENEWAL

12.1 Initial Term. This Agreement commences on the Effective Date and continues for the Initial Term specified in the Order Form.

12.2 Auto-Renewal. Unless either party provides written notice of non-renewal at least [____] days prior to the end of the then-current term, this Agreement shall automatically renew for successive Renewal Terms of:

☐ The same duration as the Initial Term
☐ One (1) month
☐ One (1) year
☐ Other: [________________________________]

12.3 Renewal Notice Requirements. Provider shall send Customer a renewal reminder at least [____] days before the auto-renewal date. The reminder shall:

(a) State the renewal date and the duration of the Renewal Term;
(b) State the Fees for the Renewal Term (including any price increase);
(c) Describe how to cancel or opt out of renewal; and
(d) Be sent to the email address on file for Customer's billing contact.

IMPORTANT — STATE AUTO-RENEWAL LAW NOTICE: Automatic renewal provisions are subject to state-specific consumer protection laws. The following states have specific auto-renewal statutes that may apply:

• California: Cal. Bus. & Prof. Code §§ 17600-17606 (Automatic Purchase Renewals) — requires clear disclosure, affirmative consent, and easy cancellation mechanisms. Effective July 1, 2025, amendments require cancellation in the same medium as enrollment.
• New York: N.Y. Gen. Oblig. Law § 5-903 — requires conspicuous disclosure of renewal terms and notice of renewal 15-45 days before renewal date for subscriptions of one year or more.
• Illinois: 815 ILCS 601/1 et seq. (Automatic Contract Renewal Act) — requires clear disclosure to consumers.
• Oregon: ORS § 646A.295 (Automatic Renewal Safeguards) — requires notice and easy cancellation.
• Virginia: Va. Code § 59.1-207.45 et seq. — requires disclosure of renewal terms and cancellation procedures.
• FTC Negative Option Rule (16 C.F.R. Part 425): Federal requirements for pre-notification negative option plans.

Counsel should review applicable state law based on Customer's location.

12.4 Effect of Non-Renewal. Upon non-renewal, the provisions of Section 7.7 (Data Return and Deletion) shall apply.

13. TERMINATION

13.1 Termination for Cause. Either party may terminate this Agreement if:

(a) The other party materially breaches and fails to cure within [____] days of written notice; or
(b) The other party becomes insolvent, files for bankruptcy, or has a receiver appointed.

13.2 Termination for Convenience. Customer may terminate this Agreement for convenience upon [____] days' written notice. If Customer terminates for convenience:

☐ Customer forfeits the remainder of prepaid Fees
☐ Customer receives a pro-rata refund of prepaid Fees
☐ Other: [________________________________]

13.3 Suspension. Provider may suspend access to the Service immediately if:

(a) Customer's use poses a security risk to the Service or other customers;
(b) Customer's use may subject Provider to third-party liability;
(c) Customer fails to pay Fees after the cure period in Section 5.4; or
(d) Required by law or government order.

Provider shall provide notice of suspension as soon as reasonably practicable.

13.4 Effect of Termination. Upon termination:

(a) All rights granted to Customer under this Agreement cease;
(b) Customer shall cease using the Service and Documentation;
(c) Provider shall make Customer Data available per Section 7.7;
(d) Each party shall return or destroy Confidential Information per Section 9.5; and
(e) The following sections survive: 2, 7 (data obligations), 8, 9, 10.4, 11, 14, and 15.

14. GOVERNING LAW AND DISPUTE RESOLUTION

14.1 Governing Law. This Agreement shall be governed by the laws of:

☐ [________________________________] (state)
☐ The state where Provider is headquartered
☐ The state where Customer is headquartered

without regard to conflict-of-laws principles.

14.2 Dispute Resolution.

☐ Litigation: All disputes shall be subject to the exclusive jurisdiction of the state and federal courts located in [________________________________].
☐ Arbitration: All disputes shall be resolved by binding arbitration administered by ☐ AAA ☐ JAMS ☐ Other: [________________________________] under its commercial arbitration rules. Arbitration shall be conducted in [________________________________].
☐ Mediation First: The parties shall first attempt to resolve disputes through mediation before proceeding to ☐ litigation ☐ arbitration.

14.3 Injunctive Relief. Notwithstanding the above, either party may seek injunctive or other equitable relief in any court of competent jurisdiction to prevent irreparable harm.

14.4 Jury Waiver.

☐ EACH PARTY WAIVES ITS RIGHT TO A JURY TRIAL IN ANY ACTION ARISING UNDER THIS AGREEMENT.
☐ Jury trial rights are preserved.

15. GENERAL PROVISIONS

15.1 Entire Agreement. This Agreement, together with all Order Forms and attachments, constitutes the entire agreement between the parties and supersedes all prior agreements regarding the subject matter hereof. Pursuant to E-SIGN (15 U.S.C. § 7001), electronic execution of this Agreement is legally binding.

15.2 Amendments. This Agreement may be amended only by a written instrument signed by both parties.

15.3 Assignment. Neither party may assign this Agreement without the other party's prior written consent, except in connection with a merger, acquisition, or sale of all or substantially all assets.

15.4 Force Majeure. Neither party shall be liable for delays caused by events beyond its reasonable control, including natural disasters, war, terrorism, epidemics, government actions, or infrastructure failures.

15.5 Notices. All notices shall be in writing and sent to the addresses set forth above by ☐ certified mail ☐ overnight courier ☐ email (with confirmation of receipt).

15.6 Severability. If any provision of this Agreement is held invalid or unenforceable, the remaining provisions remain in full force. The invalid provision shall be modified to the minimum extent necessary to make it valid and enforceable.

15.7 Waiver. No waiver of any provision shall be effective unless in writing. No failure to exercise any right constitutes a waiver of future exercise of that right.

15.8 Independent Contractors. The parties are independent contractors. Nothing in this Agreement creates a partnership, joint venture, or employment relationship.

15.9 Third-Party Beneficiaries. This Agreement does not create any third-party beneficiary rights.

15.10 Publicity. Neither party shall use the other party's name, logo, or trademarks in marketing or publicity materials without prior written consent.

15.11 Export Compliance. Customer shall comply with all applicable export control laws and regulations, including U.S. Export Administration Regulations (EAR).

15.12 Counterparts. This Agreement may be executed in counterparts, each of which is an original.

16. SIGNATURES

IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective Date.

PROVIDER:

Signature: [________________________________]
Print Name: [________________________________]
Title: [________________________________]
Date: [__/__/____]

CUSTOMER:

Signature: [________________________________]
Print Name: [________________________________]
Title: [________________________________]
Date: [__/__/____]

17. ORDER FORM

Order Form Number: [________________________________]
Order Form Date: [__/__/____]

Additional Features/Add-Ons:

Total Contract Value: $[________________________________]

Special Terms: [________________________________]

Customer Acceptance:

Signature: [________________________________]
Print Name: [________________________________]
Title: [________________________________]
Date: [__/__/____]

Provider Acceptance:

Signature: [________________________________]
Print Name: [________________________________]
Title: [________________________________]
Date: [__/__/____]

SOURCES AND REFERENCES

• Uniform Commercial Code §§ 2-204, 2-302, 2-316, 2-719
• Electronic Signatures in Global and National Commerce Act (E-SIGN), 15 U.S.C. § 7001
• Computer Fraud and Abuse Act, 18 U.S.C. § 1030
• Defend Trade Secrets Act, 18 U.S.C. § 1836
• FTC Negative Option Rule, 16 C.F.R. Part 425
• CAN-SPAM Act, 15 U.S.C. § 7701 et seq.
• Cal. Bus. & Prof. Code §§ 17600-17606 (California Auto-Renewal Law)
• N.Y. Gen. Oblig. Law § 5-903 (New York Auto-Renewal)
• Auto-Renewal Laws: 2025 Round Up | Kelley Drye

This template is for informational purposes only and does not constitute legal advice. Consult a qualified attorney licensed in your jurisdiction before using this document.