SaaS Agreement (SMB) - Texas

SAAS SUBSCRIPTION AGREEMENT — SMALL AND MEDIUM BUSINESS (TEXAS)

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. Texas-Specific Provisions
15. General Provisions
16. Signatures
17. Order Form

1. PARTIES

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

Customer ("Customer" or "Subscriber"):
Name: [________________________________]
Address: [________________________________]
City, State, ZIP: [________________________________]
Texas SOS Filing Number (if applicable): [________________________________]
Contact Person: [________________________________]
Email: [________________________________]
Phone: [________________________________]

2. DEFINITIONS

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

2.2 "Authorized Users" means individuals authorized to access the Service, up to the number in the Order Form.

2.3 "Confidential Information" means all non-public information disclosed by one party designated or reasonably understood as confidential.

2.4 "Customer Data" means all data submitted or transmitted to the Service by Customer or Authorized Users.

2.5 "Documentation" means user guides, online help, and other materials provided for the Service.

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

2.7 "Error" means a reproducible failure of the Service to perform substantially per Documentation.

2.8 "Fees" means amounts payable by Customer per the Order Form.

2.9 "Free Trial Period" means the no-charge trial period per Section 6.

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

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

2.12 "Order Form" means the ordering document in Section 17.

2.13 "Personal Data" means information relating to an identified or identifiable natural person under applicable law.

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

2.15 "Sensitive Personal Information" has the meaning set forth in the Texas Data Privacy and Security Act (Tex. Bus. & Com. Code § 541.001 et seq.), if applicable.

2.16 "Service" means the cloud-based application(s) specified in the Order Form.

2.17 "Subscription Term" means the Initial Term and any Renewal Terms.

2.18 "Usage Data" means anonymized, aggregated data that cannot identify Customer or individuals.

3. LICENSE GRANT AND ACCESS

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

3.2 Authorized Users. Customer may permit Authorized Users up to the Order Form number. Customer is responsible for all account activity.

3.3 Restrictions. Customer shall not: (a) copy, modify, or create derivatives; (b) reverse engineer or decompile; (c) sublicense, sell, or transfer access; (d) develop a competing product; (e) circumvent access controls; (f) violate applicable law; or (g) transmit malicious code.

3.4 Account Security. Customer shall maintain credential confidentiality, use reasonable security, and promptly notify Provider of unauthorized access.

4. SERVICE DESCRIPTION

4.1 Service. Provider shall make the Service available per this Agreement and Documentation.

4.2 Updates. Provider may update the Service and shall notify Customer of material changes. Core functionality shall not be materially diminished.

4.3 Support.

☐ Email support during business hours (Central Time)
☐ Phone support during business hours
☐ 24/7 support
☐ Chat support
☐ Other: [________________________________]

4.4 Availability. Provider shall maintain [____]% uptime monthly, excluding scheduled maintenance.

4.5 Maintenance. Provider shall give at least [____] hours' notice of scheduled maintenance.

5. FEES AND PAYMENT

5.1 Subscription Fees.

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

5.2 Payment Terms. Fees due within [____] days of invoice. All amounts in U.S. dollars.

5.3 Payment Methods. ☐ Credit card ☐ ACH ☐ Check ☐ Wire transfer ☐ Other: [________________________________]

5.4 Late Payment. Overdue amounts bear interest at [____]% per annum or the maximum rate permitted by applicable Texas law, whichever is less. Tex. Fin. Code § 302.001 supplies a 10% annual ceiling except as otherwise provided by law; counsel must identify and document any different Chapter 303, Chapter 306, or other applicable ceiling for this transaction. Provider may suspend access after [____] days' non-payment upon [____] days' notice.

5.5 Taxes. Fees exclude taxes. Customer is responsible for applicable taxes under the Texas Tax Code, Chapter 151. Texas treats SaaS as a taxable data processing service under Tex. Tax Code § 151.0101(a). Provider shall separately state any applicable tax on invoices. Customer shall provide a valid resale certificate or exemption documentation if applicable.

5.6 Price Increases. Provider may increase Fees for Renewal Terms upon at least [____] days' notice. Increases shall not exceed [____]% per term.

6. FREE TRIAL

6.1 Trial Period. If in the Order Form, Customer may use the Service free for [____] days.

6.2 Trial Scope. During the trial: ☐ all features ☐ limited features; [____] users; [____] GB storage.

6.3 Conversion.

☐ Auto-Conversion: Account converts to paid subscription unless Customer cancels before trial expires. Provider shall provide clear disclosure of conversion terms before the trial begins.
☐ Manual Conversion: Service deactivates unless Customer affirmatively subscribes.

6.4 Trial Data. If not converted, Customer Data retained for [____] days, then deleted.

6.5 Trial Disclaimer. THE SERVICE DURING THE FREE TRIAL IS PROVIDED "AS IS" WITHOUT WARRANTY.

7. CUSTOMER DATA AND PRIVACY

7.1 Ownership. Customer retains all rights in Customer Data.

7.2 License. Customer grants Provider a limited license to process Customer Data solely to provide the Service.

7.3 Data Security. Provider shall implement reasonable safeguards: (a) encryption in transit and at rest; (b) access controls; (c) regular assessments; (d) incident response; and (e) employee training.

7.4 Data Breach Notification. Provider shall notify Customer within [____] hours of a confirmed breach. Under the Texas Identity Theft Enforcement and Protection Act (Tex. Bus. & Com. Code § 521.053):

(a) If sensitive personal information of Texas residents is compromised, Provider shall assist Customer in complying with Texas breach notification requirements;
(b) Notification to affected individuals must be provided as quickly as possible without unreasonable delay;
(c) If notice is required at one time to more than 10,000 persons, notification must also be provided without unreasonable delay to each nationwide consumer reporting agency regarding the timing, distribution, and content of the notices; and
(d) Provider shall implement and maintain reasonable procedures to protect sensitive personal information per Tex. Bus. & Com. Code § 521.052.

7.5 Texas Data Privacy and Security Act. If applicable, Provider shall comply with the Texas Data Privacy and Security Act (Tex. Bus. & Com. Code § 541.001 et seq.) regarding the processing of Sensitive Personal Information and shall:

(a) Process Personal Data only as instructed by Customer and as necessary to provide the Service;
(b) Assist Customer with consumer rights requests (access, correction, deletion, portability);
(c) Implement appropriate technical and organizational measures; and
(d) Provide information necessary for Customer to conduct data protection assessments.

7.6 Data Processing. If Provider processes Personal Data, the parties shall execute a DPA ☐ attached ☐ available at [________________________________].

7.7 Data Location. Customer Data stored in: ☐ United States ☐ Customer's choice ☐ Other: [________________________________].

7.8 Data Return and Deletion. Upon termination, data available for export for [____] days, then deleted within [____] days.

7.9 Usage Data. Provider may use anonymized, aggregated Usage Data for product improvement.

8. INTELLECTUAL PROPERTY

8.1 Provider IP. Provider retains all IP rights in the Service and Documentation.

8.2 Customer IP. Customer retains all IP rights in Customer Data.

8.3 Feedback. Customer grants Provider a perpetual, royalty-free license to use Feedback.

8.4 IP Indemnification. Provider shall defend Customer against third-party IP infringement claims, subject to prompt notice and sole control of defense.

9. CONFIDENTIALITY

9.1 Obligations. Each party shall protect Confidential Information using reasonable care and use it only for this Agreement's purposes.

9.2 Exclusions. Public information, prior knowledge, independent development, lawful third-party receipt.

9.3 Compelled Disclosure. Permitted if required by law with prompt notice.

9.4 Trade Secrets. Provider's source code and algorithms are protected under the Texas Uniform Trade Secrets Act (Tex. Civ. Prac. & Rem. Code § 134A.001 et seq.) and the Defend Trade Secrets Act (18 U.S.C. § 1836).

9.5 Return of Materials. Upon termination, return or destroy all Confidential Information.

10. WARRANTIES AND DISCLAIMERS

10.1 Provider Warranties. Provider warrants: (a) Service performs substantially per Documentation; (b) authority to grant rights; (c) compliance with applicable laws; and (d) professional support.

10.2 Customer Warranties. Customer warrants authority, non-infringement, and legal compliance.

10.3 Remedy. If Service fails warranty, Provider corrects within [____] days or Customer may terminate for pro-rata refund.

10.4 DISCLAIMER. EXCEPT AS EXPRESSLY SET FORTH HEREIN, THE SERVICE IS PROVIDED "AS IS." PROVIDER DISCLAIMS ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND NON-INFRINGEMENT, CONSISTENT WITH TEX. BUS. & COM. CODE §§ 2.316 AND 2.719.

11. LIMITATION OF LIABILITY

11.1 Exclusion of Consequential Damages. EXCEPT FOR BREACHES OF SECTIONS 3.3, 9, IP INDEMNIFICATION, OR WILLFUL MISCONDUCT, NEITHER PARTY IS LIABLE FOR INDIRECT, INCIDENTAL, SPECIAL, CONSEQUENTIAL, OR PUNITIVE DAMAGES.

11.2 Cap. EACH PARTY'S TOTAL LIABILITY SHALL NOT EXCEED:

☐ Fees paid during the [____] months preceding the claim
☐ $[________________________________]

11.3 Essential Basis. These limitations reflect reasonable risk allocation and are essential to the bargain.

11.4 DTPA Interaction. The limitations in this Section do not limit either party's liability under the Texas Deceptive Trade Practices Act (Tex. Bus. & Com. Code § 17.41 et seq.) to the extent the DTPA applies and a waiver has not been properly executed per Section 14.4.

12. TERM AND AUTO-RENEWAL

12.1 Initial Term. Commences on the Effective Date for the period in the Order Form.

12.2 Auto-Renewal. Unless either party provides written non-renewal notice at least [____] days before the current term ends, this Agreement renews for:

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

12.3 Auto-Renewal Disclosure.

While Texas does not have a comprehensive auto-renewal statute comparable to California or New York, Provider shall nonetheless:

(a) Clear Disclosure: Clearly and conspicuously disclose automatic renewal terms before the subscription is purchased, including:

• That the subscription will automatically renew;
• The renewal period and pricing;
• The cancellation method and deadline;

(b) Cancellation Method: Provide a reasonable cancellation mechanism:
☐ Online cancellation via the Service portal
☐ Email cancellation to: [________________________________]
☐ Telephone cancellation: [________________________________]
☐ Other: [________________________________]

(c) Renewal Reminder: Send a renewal reminder at least [____] days before the renewal date; and

(d) DTPA Considerations: Failure to disclose material auto-renewal terms may constitute a deceptive trade practice under Tex. Bus. & Com. Code § 17.46(b)(24) (failure to disclose information about goods or services that was known at the time of the transaction with the intent to induce the consumer into a transaction).

NOTE: Texas HB 2859/SB 838 (2025 legislative session) proposed auto-renewal legislation. Counsel should verify current Texas law at the time of execution.

13. TERMINATION

13.1 For Cause. Either party may terminate if the other materially breaches and fails to cure within [____] days of notice, or becomes insolvent.

13.2 For Convenience. Customer may terminate upon [____] days' notice. Refund: ☐ pro-rata ☐ none ☐ other: [________________________________].

13.3 Suspension. Provider may suspend for security risks, potential liability, non-payment, or legal requirements.

13.4 Effect. Upon termination: rights cease, data export per Section 7.8, confidential information returned. Surviving sections: 2, 7, 8, 9, 10.4, 11, 14, 15.

14. TEXAS-SPECIFIC PROVISIONS

14.1 Governing Law. This Agreement shall be governed by the laws of the State of Texas without regard to conflict-of-laws principles. All disputes shall be subject to the exclusive jurisdiction of the state and federal courts located in [________________________________] County, Texas.

14.2 Mandatory Venue. Venue for any legal action shall be in [________________________________] County, Texas, which the parties agree is proper under Tex. Civ. Prac. & Rem. Code § 15.002.

14.3 Statute of Frauds. Pursuant to Tex. Bus. & Com. Code § 26.01, this written Agreement satisfies the statute of frauds.

14.4 DTPA Applicability. Section 17.45(10) defines "business consumer," while § 17.45(4) excludes from "consumer" status a business consumer with assets of $25 million or more, or one owned or controlled by an entity with assets of $25 million or more. Section 17.49(f) separately exempts certain claims arising from a written contract involving more than $100,000, negotiated with independently selected counsel, and not involving the consumer's residence. Neither provision is a waiver. Any actual consumer waiver must satisfy § 17.42.

☐ Counsel confirms a statutory exclusion or exemption applies
☐ No exclusion or exemption determination is made in this Agreement

14.5 Attorney Fees. By contract, the prevailing Party may recover reasonable attorney fees to the extent permitted by law. Separately, Tex. Civ. Prac. & Rem. Code § 38.001(b) permits a person to recover fees on a valid listed claim against a non-exempt individual or organization if the Chapter 38 requirements are met.

14.6 Statute of Limitations. Tex. Civ. Prac. & Rem. Code § 16.051 supplies a four-year residual period when no more specific provision applies. Any proposed contractual shortening to [____] years must be tested against current Texas law and the classified claim.

14.7 Texas Data Breach Notification. Provider shall comply with Tex. Bus. & Com. Code § 521.053 regarding breach notification as described in Section 7.4.

14.8 Texas Franchise Tax. Provider represents that it is in good standing with the Texas Comptroller and current on franchise tax obligations.

14.9 Electronic Transactions. This Agreement may be executed electronically per Tex. Bus. & Com. Code § 322.001 et seq. (UETA).

14.10 Texas Sales Tax. Texas treats SaaS as a taxable data processing service under Tex. Tax Code § 151.0101(a). The Texas Comptroller classifies remotely accessed software as "data processing" subject to sales and use tax. Provider shall collect and remit applicable Texas sales and use tax and separately state tax on invoices.

15. GENERAL PROVISIONS

15.1 Entire Agreement. This Agreement and all Order Forms constitute the entire agreement.

15.2 Amendments. Written, signed by both parties only.

15.3 Assignment. No assignment without consent, except in merger/acquisition.

15.4 Force Majeure. Neither party liable for delays beyond reasonable control, including natural disasters, severe weather (hurricanes, tornadoes), government actions, or infrastructure failures.

15.5 Notices. Written to addresses above by ☐ certified mail ☐ courier ☐ email with confirmation.

15.6 Severability. Invalid provisions modified; remaining provisions unaffected.

15.7 Waiver. Written only.

15.8 Independent Contractors. No partnership, joint venture, or employment created.

15.9 Counterparts. May be executed in counterparts.

16. SIGNATURES

PROVIDER:

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

CUSTOMER:

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

17. ORDER FORM

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

Add-Ons:

Total Contract Value: $[________________________________]

Customer Signature: [________________________________] Date: [__/__/____]
Provider Signature: [________________________________] Date: [__/__/____]

SOURCES AND REFERENCES

• Tex. Bus. & Com. Code § 17.41 et seq. (DTPA)
• Tex. Bus. & Com. Code § 26.01 (Statute of Frauds)
• Tex. Bus. & Com. Code § 521.002 (Identity Theft Enforcement and Protection)
• Tex. Bus. & Com. Code § 521.053 (Data Breach Notification)
• Tex. Bus. & Com. Code § 541.001 et seq. (Texas Data Privacy and Security Act)
• Tex. Bus. & Com. Code § 322.001 et seq. (UETA)
• Tex. Fin. Code § 302.001 (Maximum Interest Rate)
• Tex. Civ. Prac. & Rem. Code § 16.051 (Residual Limitations Period)
• Tex. Civ. Prac. & Rem. Code § 38.001 (Attorney Fees)
• Tex. Civ. Prac. & Rem. Code § 134A.001 et seq. (Trade Secrets Act)
• Auto-Renewal Laws 2025
• State Auto-Renewal Laws and SaaS

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