What is SaaS Agreement?

Legally, a SaaS agreement is usually a hybrid. The right to use the software resembles a licence, while hosting, maintaining and securing it is a service. Because Dutch law has no specific rules for SaaS, the contract terms decide almost everything. Those are nearly always the supplier's terms, and for smaller subscriptions they are not open to negotiation.

Five topics determine how good a SaaS contract is. Availability: what percentage of uptime does the supplier commit to, how is it measured, and what do you get back when it falls short? Without a service level agreement backed by service credits, a promise of 99.9 percent is an intention, nothing more. Data: where is it stored, who can access it, and what does the supplier do after a breach? As soon as personal data sits in the system, a data processing agreement is mandatory under the GDPR. Price: almost every SaaS supplier reserves the right to adjust its rates each year, sometimes with a cap, often without. Term: monthly and annual plans usually renew automatically, and on annual plans the notice deadline often falls 30 or 60 days before the renewal date. Exit: in what format do you get your data back, within what period, at what cost, and how long does the supplier keep it afterwards?

Strikingly often the terms let the supplier change them unilaterally, with notice by email or on its website. Between businesses that is not automatically invalid. Check whether a material change gives you the right to cancel free of charge, and keep a copy of the terms that applied when you accepted them.

Per-user pricing makes SaaS flexible, but it also leaks. Accounts of former employees keep running, annual licences are billed on the year's peak headcount, and modules switched on once for a trial are still on the invoice.

Individual SaaS contracts are often small, but together they are one of the fastest-growing cost lines in an SME. They are also the easiest to sign: a department enters a company card, clicks accept, and the contract is recorded nowhere. Gartner (2024) estimates that around 40 percent of SaaS spend in organisations goes unmonitored.

That has three consequences. Subscriptions renew without anyone checking whether they are still needed. Price increases go through without anyone comparing them to the contract. And when you switch provider, you discover that nobody ever read the terms on data and cancellation.

Consider an installation company with 25 staff moving to a new planning system. Its EUR 7,200 annual plan was cancelled on time, but the terms say the account closes on the end date, all data is deleted 30 days later, and exports are CSV only, without the photos and customer signatures attached to work orders. Read in February, that is a scramble. Read at signing, it is a clause you can negotiate: a full export, attachments included, in a standard format and within a fixed period.