US SaaS Agreement (B2B) template

Overview

A business-to-business SaaS agreement governs a vendor's provision of hosted software to a commercial customer in the United States. Unlike the EU or UK, there is no single federal statute dedicated to software-as-a-service contracts. The governing frameworks are instead a patchwork: general contract law (which is state law, not federal — each state has its own common law of contracts, though most have adopted some version of the Uniform Commercial Code for goods, which courts apply only by analogy to software since software licenses are typically treated as services or intangible property, not "goods"); the Uniform Computer Information Transactions Act (UCITA), adopted only in Virginia and Maryland, which does directly address software licensing where it applies; the FTC Act Section 5 prohibition on unfair or deceptive practices, relevant to auto-renewal and cancellation terms; and state-specific auto-renewal statutes (California's Automatic Renewal Law, and similar statutes in other states) that impose disclosure and cancellation-mechanics requirements even in a B2B context in several states. Because contract law is state law, this agreement should always specify a governing state and venue. Parties commonly choose Delaware or New York law for their well-developed commercial case law, or the vendor's own state of incorporation. When to use it: whenever a SaaS vendor licenses access to its platform to a business customer under a subscription model, whether sold directly or through a reseller. It typically sits alongside a separate Data Processing Addendum if personal data is processed, and an SLA exhibit if uptime commitments are made. Parties: the vendor (or "Provider") who owns or operates the SaaS platform, and the customer (or "Subscriber"), a business entity. Key clauses: grant of a limited, non-exclusive, non-transferable right to access and use the service; subscription term and auto-renewal, with cancellation notice periods that should track any applicable state auto-renewal statute; fees and payment terms, including late-payment interest (subject to state usury caps in some states); service availability and support, often cross-referenced to a separate SLA; data ownership (customer retains ownership of its data, vendor obtains only a limited processing license); confidentiality; intellectual property ownership of the underlying platform; warranty disclaimers (typically "AS IS" language in capital letters, a US drafting convention tied to conspicuousness requirements under state consumer and commercial law); limitation of liability with a liability cap, usually tied to fees paid in a trailing period, and exclusion of consequential damages; indemnification (mutual — IP infringement by vendor, misuse or unlawful data by customer); termination for cause and for convenience; and a governing-law/venue clause naming the chosen state. Pitfalls to avoid: omitting a state auto-renewal disclosure where the customer's or vendor's state requires one (California, and a growing list of others, apply their auto-renewal statutes broadly); relying on a liability cap that is not conspicuous enough to be enforceable under the chosen state's law; and failing to address export control and sanctions compliance (EAR/OFAC) where the SaaS platform or its customers operate internationally, an issue that has no equivalent under EU or UK SaaS agreements in the same form.