SaaS Agreement Template: Complete Guide to Creating SaaS Contracts

A SaaS agreement is the contract between a software-as-a-service vendor and its customer that sets the terms for using hosted software: the customer gets access to the service for a subscription term, not a copy of the software. It covers fees and payment, term and renewal, service levels, data protection, intellectual property, warranties, limits on liability and termination.

This guide is general information, not legal advice.

Key Takeaways

• 87% of Common Paper Cloud Service Agreements renew automatically and about 70% give a 30-day notice window, in its 2026 benchmark of 16,140 signed agreements.
• 96% of those cloud service agreements cap the vendor’s liability at 1x the fees, and only 26% include a service level agreement (SLA).
• Common Paper’s Cloud Service Agreement (v2.1, 2024) and Bonterms Cloud Terms (v1.0, 2022) are free, lawyer-drafted SaaS templates under a CC BY 4.0 license.
• If you process personal data for customers covered by the EU’s GDPR, Article 28 requires a binding written contract with them, usually a data processing agreement (DPA).

What Is a SaaS Agreement?

In a 2021 American Bar Association guide to SaaS agreements, Henry Ward Classen describes the model in one line:

The customer does not license a copy of the software but accesses the software as a service on an as-needed basis.

Henry Ward Classen, Business Law Today, American Bar Association, November 2021. Read the article

The vendor hosts and maintains the software, and the contract grants the customer a right to use it for a term. Ironclad puts it the same way: SaaS contracts “grant usage rights rather than ownership of the software.”

You will see the same contract called a SaaS agreement, SaaS contract, subscription agreement, cloud service agreement or terms of service. Self-serve products usually use click-through terms of service; sales-led products sign a negotiated agreement with an order form for each purchase.

SaaS Agreement vs Software License

	Software license	SaaS agreement
What the customer gets	Permission to use a copy of the software	Access to software the vendor hosts
Where it runs	Customer’s devices or servers	Vendor’s infrastructure
How it is paid	Often a one-time fee for a perpetual license, plus maintenance	Recurring subscription fees for a term
Updates and hosting	Customer installs updates	Vendor runs one version and updates it for everyone
Key clauses	License scope, copies, transfer, installation	Access, uptime, data security, renewal, termination and data return

A license never transfers ownership: the developer keeps the intellectual property in both models. The practical difference is that in SaaS your customers’ data lives on your systems, which is why data, security and uptime clauses carry so much weight.

The Documents That Make Up a SaaS Contract

Modern SaaS contracts are modular. Common Paper’s Cloud Service Agreement consists of “a Cover Page, plus the Standard Terms that are hosted online and incorporated by reference”, and Bonterms works the same way. Most deals combine:

• Order form or cover page: the business terms for this customer: products, quantities, fees, billing frequency, start date and term.
• Standard terms (the master agreement): the legal terms that stay the same for every customer, from access rights to liability.
• Data processing agreement (DPA): how you handle personal data on the customer’s behalf. Required in practice for customers covered by GDPR.
• Service level agreement (SLA): uptime commitments and the credits owed if you miss them.
• Support policy: support channels, hours and response times.
• Acceptable use policy and security policy: what customers may not do with the service, and how you protect their data.

Keeping business terms on the order form means sales can change price or term without reopening the legal terms, and legal review gets faster because the standard terms rarely change.

Key Clauses to Include in a SaaS Agreement

Common Paper’s 2026 SaaS Contract Benchmark Report analyzed 16,140 agreements (Cloud Service Agreements, NDAs and Design Partner Agreements) signed by 2,223 companies between June 2025 and June 2026. The percentages below are for its Cloud Service Agreements, all built on Common Paper’s own template, so they show what users of that standard agree to rather than the whole SaaS market.

Clause	What it covers	What the 2026 data shows
Access and use	The right to use the service, user limits and restrictions	Not measured in the report
Fees and payment	Price, billing frequency, invoice terms, late payment	30-day payment period is the norm for invoiced deals
Term and renewal	Subscription length, automatic renewal, notice to cancel	87% auto-renew; about 70% use a 30-day notice window
Price increases	Whether fees can rise at renewal, and by how much	13% include automatic fee increases, down from 23% in 2024
Limitation of liability	A cap on damages and excluded types of loss	96% cap liability at 1x the fees
Service levels	Uptime commitment and service credits	26% include an SLA
Security	Security standards and breach notification	34% attach a security policy
Data and AI	Data ownership, use, return and deletion; use for AI training	14% prohibit using customer data to train AI, up from under 1% in 2024
Intellectual property	Vendor keeps the software; customer keeps its data	Not measured in the report
Termination	Termination for breach, effects, data export window	Not measured in the report

Two clauses deserve extra care. On liability, a 1x cap ties the most a customer can recover to the fees they pay, so check which period of fees the clause counts. On service levels, a credit is the usual remedy: Amazon S3’s SLA credits 10% of the affected storage class’s charges in that region when monthly uptime falls below 99.9% for S3 Standard, rising to 25% below 99.0% and 100% below 95.0%, and Google Workspace’s SLA commits to 99.9% with credits of 3 to 15 days of service. 99.9% a month allows about 43 minutes of downtime in a 30-day month.

Free SaaS Agreement Templates

Don’t start from a blank page or a contract copied from another company’s website. These standards are free and drafted by lawyers:

Template	Best for	Version	License
Common Paper Cloud Service Agreement	Sales-led B2B SaaS with an order form	v2.1, November 2024	CC BY 4.0
Common Paper Terms of Service	Self-serve B2B products with click-through signup	Based on the CSA v2.1	CC BY 4.0
Bonterms Cloud Terms	Sales-led B2B SaaS, with a cover page	v1.0, February 2022	CC BY 4.0
Cooley SaaS Agreement (ACC form)	A reference for negotiating as a customer	2020 (ACC-hosted PDF)	Not open-licensed

Common Paper’s standards were written by a committee of attorneys from vendors, procurement teams and law firms, and Bonterms by a committee of more than 120 lawyers. Cooley’s form calls itself “fairly generic, and somewhat customer-favorable”, and its own footnote says the data provisions need updating for GDPR and CCPA, so don’t adopt it as a vendor without changes. Common Paper also publishes a data processing agreement and an SLA built to attach to its agreement.

SaaS agreement template: section outline

Whichever template you choose, a complete SaaS agreement follows roughly this order:

1. Parties, effective date and definitions
2. Order form: products, quantities, fees, billing and subscription term
3. Access to the service and use restrictions
4. Customer obligations and acceptable use
5. Fees, invoicing, taxes and late payment
6. Term, automatic renewal, notice and price changes
7. Customer data: ownership, permitted use, security and the DPA
8. Service levels and support
9. Intellectual property and feedback
10. Confidentiality
11. Warranties and disclaimers
12. Indemnification
13. Limitation of liability
14. Termination, suspension and return or deletion of data
15. General terms: governing law, disputes, assignment, notices

How to Create a SaaS Agreement

1. Choose the format. Click-through terms of service for self-serve signups; a master agreement plus order forms for sales-led deals.
2. Start from a standard. Use one of the templates above rather than drafting from scratch, and keep a record of the version.
3. Fill in the business terms. Products, price, billing frequency, term, renewal and notice period go on the order form or cover page.
4. Attach the policies. DPA, SLA if you offer one, support policy, acceptable use policy and security policy.
5. Decide your positions in advance. Your liability cap, any data breach carve-out, price increases at renewal and what you will and won’t negotiate.
6. Have a lawyer review it before first use, and again when you sell into a new country, a regulated industry or enterprise accounts.
7. Track every signed contract. Renewal dates, notice windows and price terms decide your revenue as much as the sale did.

Pricing and Renewal Terms Shape Your Cash and Retention

The commercial terms in a SaaS agreement change your numbers. Kevin Houston, then Founderpath’s head of finance, compared two contracts with the same $50,000 average annual value in a September 2022 talk on capital allocation mistakes (see slide 9):

	Contract 1: three years prepaid, 10% discount	Contract 2: billed yearly, price steps up
Year 1 cash	$135,000	$40,000
Year 2 cash	$0	$50,000
Year 3 cash	$0	$60,000
Total cash collected	$135,000	$150,000
MRR in years 1, 2 and 3	$3,750 each year	$3,333, $4,167, $5,000

The prepaid contract wins only on cash on day one. The annual contract with built-in step-ups collects more in total and grows MRR and net dollar retention every year without a new sale. Houston’s advice:

The multi-year contract could be incredibly helpful in the early days, obviously as you’re trying to find product market fit. You need cash, you need to experiment… but the sooner you can get into multiple annual paid contracts, hopefully with an embedded growth mechanism, the better you’ll be. And as I said, it’s a cheat code for NDR.

Kevin Houston, then head of finance at Founderpath, September 2022. Watch at 5:40

Buyers push back on uplifts. Tropic’s 2026 pricing report, drawn from more than $18B of software spend it manages for customers, puts the typical annual renewal uplift at 3-9% and the average term for primarily SaaS vendors at 18.7 months, and in Common Paper’s data only 13% of agreements include automatic fee increases. Write the increase into the agreement rather than hoping to negotiate it at renewal.

Privacy and Renewal Laws to Know

• GDPR. When you process personal data on behalf of a customer covered by the EU’s GDPR, Article 28 requires a contract that is binding on you as processor and sets out the subject matter, duration, nature and purpose of the processing. That is your DPA.
• CCPA. California’s privacy law gives California residents the right to be notified before or at the point businesses collect their personal information, among other rights. It applies to businesses that meet its thresholds; the California Attorney General’s guide explains them.
• Automatic renewal laws. California’s automatic renewal law defines a consumer as someone buying “for personal, family, or household purposes”, so it governs consumer subscriptions rather than most B2B SaaS contracts. Other states have their own rules, so check where your customers are. The FTC’s 2024 “click to cancel” rule was vacated by the Eighth Circuit on July 8, 2025.

Laws change and vary by country and state. Treat this list as a starting point for a conversation with your lawyer.

Contracts Are What Lenders Fund

Signed, renewing subscription contracts are what make SaaS revenue predictable, and predictable revenue is what non-dilutive lenders fund against. Clean agreements with clear terms, automatic renewal and price steps can make that revenue easier to underwrite.

Founderpath provides non-dilutive capital for B2B SaaS companies with at least $10K MRR. There’s no equity, no warrants, no board seats and no personal guarantees. Connect your billing, banking and accounting data, and most founders see funds within 24-48 hours.

Check what you qualify for. It takes less than 5 minutes.

SaaS Agreement FAQ

What is a SaaS agreement?

A SaaS agreement is the contract between a software-as-a-service vendor and its customer that sets the terms for using hosted software. The customer gets access to the service for a subscription term rather than a copy of the software, and the agreement covers fees, renewal, service levels, data, intellectual property, liability and termination.

What should a SaaS agreement include?

At minimum: the parties and the order (products, fees, term), the right to access and use the service, payment terms, term and renewal, data protection and security, service levels and support, intellectual property, warranties, limitation of liability, confidentiality, and termination with what happens to the customer’s data.

What is a SaaS license?

The phrase usually means a SaaS subscription. Strictly, a software license grants the right to use a copy of software the customer installs, while a SaaS agreement grants access to software the vendor hosts. As the American Bar Association puts it, the customer does not license a copy of the software but accesses it as a service.

Is there a free SaaS agreement template?

Yes. Common Paper’s Cloud Service Agreement (version 2.1) and Bonterms Cloud Terms (version 1.0) are free standard SaaS agreements drafted by committees of lawyers and published under a Creative Commons CC BY 4.0 license. Common Paper also publishes click-through Terms of Service for self-serve B2B products.

What is the difference between an MSA and a SaaS agreement?

A master services agreement (MSA) holds the standard legal terms, and separate order forms list what each customer buys, the price and the term. Many SaaS agreements use exactly that structure: the cloud terms work as the MSA and the cover page or order form carries the business terms.

Do SaaS contracts renew automatically?

Most do. In Common Paper’s 2026 benchmark of signed Cloud Service Agreements, 87% included automatic renewal and about 70% used a 30-day notice window to cancel. California’s automatic renewal law protects consumers, so it does not set the rules for most business-to-business SaaS contracts.

Do I need a lawyer to create a SaaS agreement?

Start from a standard, lawyer-drafted template and have a lawyer review it before you use it, especially for enterprise customers, regulated data or deals outside your home country. Both Common Paper and Cooley’s form say they are not legal advice, and Cooley’s calls itself a starting point.

What is a typical uptime commitment in a SaaS SLA?

99.9% a month is a common headline commitment: Amazon S3 (Standard) and Google Workspace both publish it. That allows about 43 minutes of downtime in a 30-day month. The usual remedy is a service credit against future fees, not cash, and only 26% of Common Paper Cloud Service Agreements in 2026 included an SLA at all.