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What are SaaS terms of use? They are the terms of use that the provider of a SaaS service applies to the end user, outlining the rules for creating an account, what is and isn't allowed (acceptable use), fair-use limits, how user content is handled, and when an account may be suspended or blocked. Therefore, they do not regulate the commercial deal, but rather the behavior of everyone who logs in and uses the software.
The short answer
- What: General terms and conditions aimed at the end user of a SaaS service.
- What for: accounts, permitted and prohibited use, fair use, user content, suspension or blocking for abuse, liability limits.
- Validity: only binding if they are made available before or at the time of closing, usually via a click agreement during registration.
- Not the same as: the negotiated B2B master agreement, a standalone SLA, or a maintenance contract.
What exactly are SaaS terms of use
SaaS terms of use (also known as user terms) are the legal house rules between the provider and everyone who actually uses the service. Take an online project management app with thousands of end users. Not every user negotiates a contract; they click agree when creating an account. From that moment on, the terms of use apply to their behavior in the app.
The terms and conditions describe, among other things, how an account is created and secured, what the user is personally responsible for, and what use is permitted and what use is prohibited. In short, they are the blueprint for normal and abnormal use.
Difference from the main B2B agreement
This is where things often go wrong. A SaaS provider usually has two types of agreements:
- The main agreement (SaaS agreement). This is the negotiated deal with a business customer: price, term, service levels, and data processing agreements. That customer purchases the service for their organization.
- The Terms of Use. These are the rules for the individual end users who work with the software, regardless of who purchased the service.
For the project management app, the company subscribing enters into the main agreement, but the acceptable use policy and fair use limits from the terms of use apply to every employee who logs in. Both documents have their own function and should not be conflated.
What the terms of use regulate for the end user
The core of good SaaS terms of use consists of a number of fixed components:
- Account and security. Who is allowed to create an account, provide correct details, and take care of a secure password and confidential login credentials.
- Acceptable use. An acceptable use policy that describes what use is normal and what behavior is prohibited, such as hacking, spamming, damaging the service, or circumventing limits.
- Fair use limits. Limits on consumption per account, for example storage, number of projects, or API requests, to prevent a single user from burdening the service for others.
- User content. Who remains the owner of uploaded content and what limited license the user grants to the provider to be able to deliver the service.
- Suspend or block. When the provider may suspend or block an account in case of abuse.
- Liability. Reasonable limits to the provider's liability towards the user.
When do they apply legally?
Terms of Use are general terms and conditions within the meaning of the Dutch Civil Code. They only bind the user if they have been provided or made available digitally before or at the time of concluding the agreement (Articles 6:233 and 6:234 of the Civil Code). In the case of SaaS, this almost always occurs via a click agreement: when creating an account, the user checks a box indicating acceptance of the terms, with a clear link to the full text.
If the service contains unreasonably burdensome clauses, they may be annulled. If the service is aimed at consumers, the black and grey lists of clauses that are prohibited or presumably unreasonable also apply. If the provider processes personal data, the GDPR applies; if the provider processes it on behalf of a business client, a data processing agreement is required (Art. 28 GDPR).
Honest recommendation
You do not need a lawyer to understand what terms of use are or to create an initial draft if your service is simple and you provide exclusively to business users with limited risk. A good example structure will get you a long way in getting an idea of the structure. However, do engage a lawyer as soon as you want to make an acceptable use policy and fair use limits legally sound, properly define user content and liability, or serve consumers to whom the black and grey lists apply. This will prevent a clause from proving to be voidable later on.
Want to know more? View the SaaS terms of use, read how to drafting SaaS terms of use , and what it costs to have SaaS terms of use drafted .
Frequently Asked Questions
These are the terms of use that a SaaS provider applies to the end user. They govern the creation and security of accounts, acceptable use, fair-use limits, user content, suspension or blocking in case of abuse, and limits of liability. They concern the behavior of everyone who logs in, not the commercial deal.
The main agreement is the negotiated deal with a business customer regarding price, duration, and service levels. The terms of use apply to the individual end users working with the software. In the case of a project management app, the company concludes the main agreement, but the acceptable use policy applies to every employee who logs in.
They only bind the user if they are made available before or at the time of conclusion (Articles 6:233 and 6:234 of the Dutch Civil Code). In the case of SaaS, this occurs via a click agreement when creating an account, with a clear link to the full text. Without acceptance, they are not binding.
An acceptable use policy describes what use of the service is permitted and what behavior is prohibited, such as hacking, spamming, damaging the service, or circumventing fair-use limits. It gives the provider a clear basis to intervene in the event of abuse.
Fair use limits set limits on consumption per account, such as storage, number of projects, or API requests. They prevent a single user from burdening the service for everyone else and give the provider a reasonable basis to curb excessive use.
The user generally remains the owner of their own content. In the terms and conditions, they grant the provider a limited license to process, store, and display that content, to the extent necessary to deliver the service. Good terms and conditions make this explicit.
Yes, if the provider processes personal data. If it processes this on behalf of a business client, a data processing agreement is required (Art. 28 GDPR). Moreover, for consumers, the black and grey lists apply, allowing unreasonably burdensome clauses to be annulled.
