Service Agreement Template for SaaS Businesses (UK 2025)
Last updated: February 2025
Why SaaS Businesses Need a Service Agreement
SaaS service agreements govern the ongoing relationship between the provider and its customers, covering subscription terms, uptime commitments, data processing responsibilities, and support levels. Unlike one-off product sales, SaaS agreements must address continuous service delivery, data ownership upon termination, and the evolving nature of software through updates and feature changes. UK-specific GDPR obligations as a data processor make these agreements particularly important for compliance.
Key Clauses for SaaS
- Service level agreement with uptime guarantees and remedies
- Data processing and GDPR compliance obligations
- Subscription terms, auto-renewal, and cancellation rights
- Data portability and deletion upon contract termination
Common Mistakes
- Not including adequate data processing terms required under GDPR Article 28
- Failing to address what happens to customer data when the subscription is cancelled or the service is discontinued
Template Sections
- Service levels and uptime commitment schedule
- Data processing agreement as an integrated schedule
- Subscription billing, renewal, and termination provisions
FAQ
Does a SaaS service agreement need a separate data processing agreement?
Under GDPR Article 28, if you process personal data on behalf of customers, you must have a data processing agreement in place. This can be a schedule within the service agreement or a standalone document. It must cover the nature and purpose of processing, data subject categories, your obligations as processor, and sub-processor arrangements.
What uptime guarantee should a SaaS service agreement include?
Industry standard is 99.9% uptime, which allows approximately 8.7 hours of downtime per year. Define how uptime is measured, exclude scheduled maintenance windows, specify the remedy for breaches such as service credits, and include an escalation path for critical outages. Avoid guaranteeing 100% uptime as this is technically impossible.
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Get Started FreeThis is guidance for UK businesses, not legal advice. Templates are illustrative. Consult a solicitor for complex matters.
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