SaaS contracts explained: 6 clauses every founder should understand

Most SaaS founders either copy a template they don’t understand or sign whatever the customer sends. Both end badly. These are the six clauses we spend the most time on.

1. License grant

Defines exactly what your customer can and can’t do with your software. Be specific about scope, users, and territory.

2. Data ownership

Customer data belongs to the customer. Be clear about your right to use it for analytics, model training, and aggregated benchmarks.

3. Service level agreement (SLA)

Uptime promises with teeth. Don’t commit to 99.99% if you’re running on a single region.

4. Indemnification

Mutual is fair. One-sided indemnity from a small vendor to a Fortune 500 is a landmine.

5. Limitation of liability

Cap it. A 12-month fees cap is standard. Carve-outs for confidentiality and IP infringement are often acceptable.

6. Termination & data return

Define who deletes what, when, and how the customer gets their data on the way out.

If you’re negotiating an enterprise SaaS deal, talk to us before you sign. The deltas in these six clauses can be worth more than the contract itself.