Don’t grant a license to SaaS, AIaaS, or other cloud services
Many software-as-a-service (SaaS) contracts grant a “license” to the vendor’s software. So do a lot of other cloud services agreements – on offerings like PaaS and AIaaS (artificial intelligence as-a-service). That’s a mistake, at least in the U.S. and jurisdictions with similar copyright laws. Licenses authorize reproduction of on-premise software (generally). Customers don’t reproduce SaaS […]
The Tech Contracts Master Class™ Now Available On-Demand
We’re excited to announce that our popular Tech Contracts Master Class™ is now available as a recorded resource – in our On-Demand library . You get one year’s access, so you can use the program both for training and as a reference guide for future projects. And for a short time, you can buy the Master […]
Why Not to Use “License” Agreements for Software-as-a-Service (SaaS) Deals
This article has been updated with a new one: “Don’t grant a license to SaaS, AIaaS, or Other Cloud Services.” Many software-as-a-service (SaaS) contracts grant a “license” to the vendor’s software. That’s a mistake. Licenses authorize making copies of on-premise software. Customers don’t copy SaaS, so they don’t need a license. And if you’re the […]
Fall in love with tech contracts – train with us
Enrollment for our Spring Tech Contracts Master Class series is now live: Four online classes, taught by industry expert David Tollen –Prime Clauses (April 18), General Clauses (April 25), Key Liability Terms (May 9), End-Game and Special Clauses (May 16). Taken together, they will prepare you to negotiate contracts about software and cloud services more confidently and efficiently, and help you avoid common pitfalls. […]
How Long Should a Warranty Last?
Students and trainees often ask me how long a warranty of function should last. And contract negotiators regularly debate it. Someone should do a thorough survey, but in the absence of good data, I’ll offer my experience. Duration I don’t often see software warranties shorter than ninety days. Thirty days seems to be the bottom. […]
Don’t Cross the (Payment) Streams
“Don’t cross the streams,” says Egon in Ghostbusters (the 1984 original). “It would be bad.” Why? “Try to imagine all life as you know it stopping instantaneously and every molecule in your body exploding at the speed of light.” You could face less extreme consequences if you cross the payment streams in a contract, but […]
IP Indemnity Exception: “Registered after the Effective Date”
Some intellectual property indemnities exclude claims about IP registered after the contract’s effective date. The tech provider argues that it shouldn’t be responsible for IP it didn’t know about when it created its product — or at least when it signed the contract. “If we couldn’t have known about that IP, it’s not our fault […]
Don’t grant or receive licenses to “use” software
Here’s a typical grant of rights from a software end-user license agreement (EULA): Provider hereby grants Customer a license to use 30 copies of the Software. Common though that clause may be, it’s dysfunctional. On-premise software licenses grant rights under copyright. And the copyright statute does not address a right to use anything. U.S. copyright […]
Cloud Services Are Neither Products nor Services
Contract drafters regularly confuse cloud services with traditional products and services. They approach software-as-a-service (aka SaaS) and other cloud services as if they were either software products or old-style services, like professional services. That leads to perplexing negotiations and contracts full of errors. Much of the trouble stems from the IT industry’s vocabulary. In the […]
Browsewraps Could Be Enforced
The Tech Contracts Handbook warns website operators not to rely on browsewraps: contracts posted online without a click-to-agree requirement. In fact, the book warns against any contract executed or even amended without without clear consent from the customer, like an “I agree” click. (See TCH 2nd Ed. Ch. III.S and Append. 3.) Without that sort […]