SaaS Agreement Review

SaaS agreements commonly auto-renew for 12 months unless you cancel 30-90 days before the renewal date. Miss the window by a single day and you're locked in for another full year. Enterprise SaaS contracts sometimes extend this to "within 90 days of the prior period's anniversary" — meaning you must decide to cancel three months before the renewal even begins. For multi-year contracts, the financial exposure can be hundreds of thousands of dollars.

Many SaaS agreements allow the vendor to increase pricing at renewal with as little as 30 days' notice — or even automatically, with pricing tied to a CPI index. For a SaaS product embedded in your operations, switching costs are high, which gives the vendor leverage to raise prices knowing you have limited ability to exit. Price escalation clauses that aren't capped can double your subscription cost within 2-3 renewal cycles.

SaaS agreements often grant the vendor a perpetual license to use your data for "product improvement, analytics, benchmarking, and AI training" — with no limitation on how your specific business data is used, aggregated, or shared. If you're uploading proprietary customer data, financial data, or competitive intelligence, an unrestricted data license can result in your data being used to train models that serve your competitors.

If the vendor doesn't guarantee your right to export your data in a standard format before termination, you may find yourself locked in or facing data loss at contract end. Some SaaS contracts only provide 30 days after termination to export data — after which it may be deleted. Without machine-readable export formats specified, "data export" can mean a PDF dump that takes months to reprocess.

Enterprise SaaS contracts often promise 99.9% uptime in the SLA but limit remedies to service credits — calculated as a fraction of your monthly fee for the affected period. If your business loses $100,000 in revenue during a 4-hour outage, a $50 service credit is not a remedy. Many SLAs also exclude scheduled maintenance, "force majeure," and vendor-defined "external factors" from uptime calculations, making the 99.9% guarantee much weaker in practice.

Most SaaS agreements exclude all liability for "data loss, unauthorized access, or security incidents" and cap total liability at fees paid in the prior 3-12 months. If the vendor suffers a breach that exposes your customers' personal data, you — not the vendor — will bear the regulatory fines, breach notification costs, and reputational damage, while the vendor's liability is capped at a fraction of what you paid.

Many SaaS agreements give the vendor a right to terminate for convenience with 30 days' notice (e.g., if they discontinue the product) but do not give you a corresponding right. Multi-year SaaS commitments without a customer termination right expose you to paying for a product that no longer meets your needs, has been deprioritized by the vendor, or has been acquired and is being wound down.