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Delivering software as a service, what is legally required?

Software as a Service (SaaS) is getting increasingly popular. Without having to distribute copies, it is easier to maintain software. Additionally, illegal copying is impossible when software is offered as a service. But when deploying software as a service, some legal documents are required.

First, you will need a SaaS license agreement, also known as Terms of Use or alternatively as Terms of Service. Whatever the name, this document is the key to your service. It defines what users may do, how they are charged, what guarantees (such as uptime or fixing bugs) you promise and to what extent you are liable for damages if anything goes wrong.

In addition, if the software processes personal data (such as names or IP addresses) a privacy policy is required. This document explains users of your service what you do with this data and what rights they have under applicable law. For example, in Europe, individuals have the right to be informed how data is used, but also the right to have data corrected and in some situations even removed.

If you combine your service with those of others (for example, you use third-party APIs to enhance your service) you may need a processor’s agreement to formalize the use of personal data collected through your service with these others’ services.

Finally, should you want others to resell your service to their own customers, don’t forget to get a proper SaaS reselling agreement in place.

Arnoud Engelfriet

General Director Legal ICT / ICTRecht
Arnoud Engelfriet is general director at Legal ICT / ICTRecht since june of 2008. He is specialized in internet law, the area he is working in since 1993. With a background in computer science he likes to focus on complex technical/legal IT issues and software licences (open source). His blog Ius mentis is one of the most popular legal blogs (about IT and law) in the Netherlands.

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