Copyright © 2009 Chip Cooper

I’m often asked questions about SaaS (Software program as a Service) agreements. What I have to prompt SaaS webmasters to ask is – “Is my SaaS agreement the only website legal document I require?”

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To most Saas site webmasters, the answer may possibly be surprising.

What Is a SaaS Agreement?

A SaaS Agreement is a customer agreement, and for this reason, it’s usually the focal point for webmasters of SaaS websites. However, they’re rarely called a “customer agreement” or even a “SaaS agreement”.

Much more often than not, they’re titled as a “membership agreement”, “subscription agreement”, or “services agreement”.

SaaS agreements are generally presented to the user during the registration procedure in electronic form – typically with a considerable portion partially visible from a scroll box. The user is not permitted to continue with registration until there is an acceptance that is indicated by checking the “I ACCEPT” checkbox (or by clicking on an “I ACCEPT” button). In order to call for the user to make an affirmative action to indicate acceptance, the checkbox for “I ACCEPT” is presented either as unchecked, or if there is a checkbox for “DECLINE” (instead of a button), it’s checked as the default choice.

The Typical Truth Pattern For SaaS Internet sites

If we look at the typical reality pattern related with SaaS internet sites, the readily apparent facts are these:

* there is an unrestricted, public area of the website that is accessible to all internet site visitors,

* there is a restricted, private location that is accessible only by registered users with a valid user ID and password, and

* in the process of registration, personal details of the registrant is collected (i.e. name and email address at the least, and if payment is created, credit card info).

The Standard SaaS Documents

From the typical reality pattern, the following documents are typically suggested or necessary for legal compliance and legal protection of the webmaster and owner of the SaaS internet site:

* Legal Page – linked from the bottom of the home page provides intellectual property notices (copyright, trademark, patent) and special legal disclaimers links to Terms of Use and Privacy Policy

* Terms of Use – linked from the bottom of the house page supplies legal notices and disclaimers for all web site visitors (both unregistered visitors and registered users) there is no I ACCEPT button

* Privacy Policy – linked from the bottom of the residence page notifies all internet site visitors (both unregistered visitors and registered users) regarding site’s policies for collection, use, sharing, storing, and security of information (both passive and personal) an up-to-date Privacy Policy is an essential element of a SaaS Agreement “system” and

* SaaS Agreement – customer agreement that binds registered users to terms and conditions for making use of the internet site if the agreement is in the required form and presented as required by nicely-established case law, it will be an enforceable on-line contract.

Extra SaaS Documents

Extra SaaS documents may possibly be recommended or needed depending on additional facts and circumstances. They are:

* DMCA Notice And Registration Form – for websites that allows visitors to post text or files to the website (e.g. via a Blog or forum), the website might be liable for copyright infringement arising out of these postings based on strict liability copyright principles the Digital Millennium Copyright Act (DMCA) supplies a “safe harbor” from such liability provided the web site posts a DMCA notice (normally in the Terms of Use) and files a Registration Form with the U.S. Copyright Office

* Service Provider Privacy-Security Agreement – for internet sites that outsource hosting or website services that also permit these service providers to access the internet site server and internet site internals that archive individual info and

* Red Flag Identity Theft Policy – for internet sites that are “financial institutions” or “creditors” with “covered accounts” under the U.S Fair Credit Reporting Act, as amended by the Fair and Accurate Credit Transactions Act of 2003 (FACTA), it’s necessary that they adopt and implement an identity theft policy and program prior to the extended deadline of August 1, 2009 “creditors” with “covered accounts” incorporate web sites that permit payment over time such as monthly or quarterly.

Conclusion

Webmasters of SaaS websites need to think of legal compliance in terms of a “system” – not just in terms of a single SaaS agreement.

This “system” really should consist of at least four agreements that are suggested or needed for every single SaaS internet site for legal compliance and legal protection of the webmaster and owner of the SaaS site. Of the four recommended or necessary documents, the most critical are the SaaS agreement itself and an up-to-date Privacy Policy.

Depending on facts and circumstances, there might be as numerous as three additional documents that are advised or required for every single SaaS site.

These documents do not operate alone. They need to be consistent from document to documents, and should work together as a “system” for maximum effectiveness.

This write-up is provided for educational and informative purposes only. This data does not constitute legal assistance, and really should not be construed as such.