Crafting Sales-Friendly Agreements for Enterprise SaaS

Customer agreements for SaaS platforms serve a crucial role in addressing risks and defining the relationship between the SaaS provider and the customer. But, if you’re a SaaS provider you don’t want overly complicated contracts hindering sales processes.  Crafting agreements that safeguard against risks while maintaining a smooth deal flow is key to fostering positive client relationships and minimizing unnecessary legal expenses. In this post we share sales-friendly approaches to drafting and negotiating SaaS agreements.

Drafting SaaS Agreements

• Avoid Being Too Lopsided in Favor of the SaaS Provider: Draft the agreement to be favorable to the SaaS provider but avoid making it overly one-sided. If the contract is too tough on the customer, it can encourage unnecessary negotiation, slow down the deal pipeline, and foster mistrust between the sales and legal teams.
• Draft to Be as Easy to Read as Possible: Simplify the language in your agreements to ensure they are easy to understand. The clearer the terms, the less likely customers will feel the need to involve their legal teams for review, speeding up the agreement process. While larger enterprises will have legal reviews regardless, making the agreement accessible can reduce questions and pushback from smaller businesses.
• Ensure Consistent Language Throughout: Consistency is key. Avoid undefined terms, contradictory provisions, and misplaced clauses. Inconsistencies can confuse customers, leading to delays as they seek clarifications or request modifications. Make sure all defined terms are clearly outlined and used correctly throughout the document.
• Use an Order Form to Keep the Agreement Organized: Utilize an order form to clearly list all key business terms such as contract duration, pricing, and specific services purchased. This helps the sales team confirm these terms before negotiating the main agreement. Ensure that the order form aligns with the main agreement to prevent confusion and miscommunication.
• Consult Legal Counsel in Other Countries if Necessary: If your SaaS product is sold internationally, have local legal counsel review your template agreement to ensure compliance with local laws and regulations. This proactive step can prevent significant delays and legal issues in the future, ensuring smoother negotiations and quicker closures.

Negotiating SaaS Agreements 

• Align Sales and Legal Teams on Acceptable Edits: Ensure that both the sales and legal teams are on the same page regarding which edits are always acceptable, never acceptable, and sometimes acceptable. This alignment allows the sales team to handle some negotiations independently, reducing the need for constant back-and-forth with the legal team and speeding up the negotiation process.
• Accept Non-Substantive Edits: During negotiations, be willing to accept minor, non-substantive edits from the customer. These may include typographical corrections or stylistic changes that do not affect the meaning of the contract. Accommodating these changes can build goodwill and prevent unnecessary delays.
• Provide Sufficient Time for Legal Review: Ensure the legal team has adequate time to review and negotiate the agreement. Rushed reviews increase the risk of overlooking important details, which can lead to issues down the line. Allocating proper time for thorough reviews helps ensure all critical aspects are covered and agreed upon.

Sales-friendly Takeaways

Implementing sales-friendly strategies in SaaS agreements reduces friction in the sales process. It also cultivates positive relationships between clients and customers. By aligning legal and sales teams while prioritizing clarity and efficiency, providers can streamline deal flows and drive business growth in the competitive SaaS industry.

Looking to streamline agreements for your SaaS company and optimize deal flows? SPZ Legal specializes in crafting sales-friendly agreements tailored to the unique needs of SaaS providers.

With our expertise in startup consultancy and legal strategies, we can help you navigate negotiations with confidence. We'll ensure your agreements strike the perfect balance between protection and efficiency. Reach out to SPZ Legal today and let us empower your business to thrive in the dynamic world of SaaS.