Drafting Transition-Out Provisions in SaaS Agreements: Performance Requirements, Triggering Events, Fees, Damages
Course Details
- smart_display Format
On-Demand
- signal_cellular_alt Difficulty Level
- work Practice Area
Commercial Law
- event Date
Tuesday, February 15, 2022
- schedule Time
1:00 p.m. ET./10:00 a.m. PT
- timer Program Length
90 minutes
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This 90-minute webinar is eligible in most states for 1.5 CLE credits.
This CLE webinar will guide business counsel on expertly drafting the transition-out obligations within a service agreement. The panel will discuss how to address a triggering event for transition-out rights, how detailed a statement of work must be, and what types of fees and damages, including consequential damages, a provision may include.
Mr. Schultis focuses on IP transactions, and has substantial experience representing both technology consumers and vendors and a wide variety of service providers. He represents large customers in outsourcing arrangements including one of the world's largest financial institutions, a big four accounting firm, major health care providers and utilities. Prior to founding his firm, he spent a decade as a partner at Pillsbury Winthrop Shaw Pittman LLP, focusing on IP transactions.
Mr. Galkin is an information technology and internet lawyer who has dedicated his legal practice to representing internet, e-commerce, information technology and new media businesses across the U.S. and around the world. He serves as a trusted adviser to startup, emerging, established and multinational corporations on their core commercial transactions including corporate formation and transitions, intellectual property, technology and software development, licensing, transfer, and distribution, regulatory compliance, as well as agreements for online businesses, including, SaaS offerings, website terms of use, privacy policies, development agreements, affiliate agreements and sweepstakes/contest rules and compliance. Mr. Galkin’s broad experience gained during more than 20 years in practice allows him to provide cutting-edge, creative and efficient solutions to complex problems.
Ms. Quinones regularly counsels entrepreneurs and in-house counsel on business contracting, technology and intellectual property licensing, and internet/social media and privacy issues. She provides strategic advice to businesses in all stages of the business cycle, including structuring and restructuring, raising capital, day-to-day operations, and purchase and sale transactions. Ms. Quinones’ representative clients include start-ups and emerging growth companies, technology companies (SaaS providers and IP licensors and licensees), middle market companies, and product distributors.
Increasingly SaaS customers are asking for detailed transition-out provisions in SaaS agreements. If such terms are not included in a SaaS agreement, the customer's counsel should consider whether adding these terms will protect a client's interests upon termination of the customer relationship.
When it comes to drafting the transition-out obligations, a customer contract drafter should consider the nature of the services and the impact of any termination. Where appropriate, customer's counsel should clearly define performance requirements for the service provider, as well as avoid broad standards of performance phrases such as "commercially reasonable efforts." The transition provision should set clear fee obligations to avoid changing rates during the transition.
When drafting a service provider contract, counsel should include terms that allow the customer to trigger the transition-out clause whenever an expiration or termination occurs, except perhaps where termination is due to the customer's non-payment of fees. Service providers may establish flexible fees in long-term engagements that contemplate market changes. Service providers should consider whether a customer can demand the return of its data in a specified format, and counsel should include terms addressing the administrative costs of this task.
Counsel for both clients and service providers must include how to return the client's data and how confidential information for the parties is handled and how it is returned or destroyed.
Listen as our expert panel discusses critical terms in the transition-out provisions of a SaaS agreement and how to clarify the language so that all stakeholders' interests are protected.
- Software as a service agreement
- Customer considerations
- Scope of services
- Triggering events
- Fees
- Service provider considerations
- Flexible fees
- Administrative costs
- Return of data
- Handling confidential information
- Customer considerations
The panel will address these and other key topics:
- What are the key considerations that a customer will want in a transition-out provision of a SaaS agreement?
- What are the key considerations that a service provider will want in a transition-out provision of a SaaS agreement?
- How is data returned to the customer during a transition-out period?
- What should customers and providers include regarding fees and damages in transition-out provisions?
