Every SaaS contract answers three questions: what does the software do, what happens to your data, and what happens when things break. Everything else is fine print. Read those three first.
The 9 clauses that matter
1. Scope of service
What are you paying for, exactly? A vague "the Services described on the Ordering Document" is fine only if the Ordering Document is specific. If it says "the Services generally provided by Vendor," the vendor can quietly change what you get.
2. Term and auto-renewal
How long is the term, and what happens at the end? Auto-renewal for another full term is standard. The notice window is not: 30 days is fair, 60 is common, 90 is aggressive.
Auto-renewal for a full year with 90-day non-renewal notice and no obligation on the vendor to remind you. Calendar the notice date the day you sign, or negotiate the window down.
3. Fees and price changes
Base fee, any usage or overage charges, and how the vendor can raise prices at renewal. "Vendor may increase fees at renewal" with no cap is a problem. Push for a cap (e.g. no more than 5-7 percent per year).
4. Data ownership and portability
You should own your data. The contract should say so explicitly and grant only a limited processing license to the vendor. You should also have export rights: during the term, and for 30 to 90 days after termination.
Silence on data ownership, or a broad license letting the vendor use your data "to improve the Services." Especially bad for AI vendors: your data may be training their next model. Add a clause forbidding use for model training without opt-in.
5. Security and privacy
What security standards does the vendor commit to (SOC 2, ISO 27001)? Do they notify you of breaches, and within how many hours? Where is data stored (US, EU)? Are there subprocessor commitments?
6. SLA (uptime)
99.9 percent is standard. The remedy is usually a service credit (a small percent of monthly fees), which is symbolic. What matters more: does repeated SLA breach give you a termination right without penalty?
7. Liability cap
The maximum the vendor pays if something goes wrong. Standard: 12 months of fees. Bad: 3 months, or one month. Very bad: liability capped at fees paid in the last quarter for a vendor storing your customer data.
8. Indemnification
Two clauses: vendor indemnifies you for IP infringement (they own or license the code); you indemnify them for how you use it. Check both are present and roughly balanced.
9. Termination
How can you leave? For convenience (whenever, with notice) or for cause (only if they materially breach)? Most SaaS contracts allow termination for cause only. Ask for termination for convenience with a shorter notice period.
The clauses hiding in "miscellaneous"
The 60-second checklist
- Is the scope of service specific?
- What's the auto-renewal window, and is it calendared?
- Is there a cap on price increases at renewal?
- Do you own your data, and can you export it after termination?
- Is your data protected from vendor use in AI training?
- What's the SLA and what's the remedy for missing it?
- Is the liability cap at least 12 months of fees?
- Can you terminate for convenience, or only for cause?
- Any surprise clauses in "miscellaneous"?
Upload the software agreement, get a clause-by-clause plain-English read in about an hour with the risks flagged. $1 to try. Not legal advice: a structured second opinion before you sign or take it to a lawyer.