SaaS contracts under US law

US customers and US partners expect contractual structures that differ significantly from standard German terms and conditions: their own service level agreements with clearly quantified availability guarantees, far-reaching limitations of liability and notice periods which, in line with US practice, are shorter and more unilateral than is customary under German law. The licensing structure itself – whether subscription-based, usage-based pricing or a reseller model – also has a direct impact on the contractual arrangements, as each model allocates risks and payment obligations differently.

We draft and review SaaS and licence agreements to ensure they are legally sound in the US whilst also aligning with your existing German contractual framework. We tailor service level agreements, liability clauses and termination provisions to your specific licensing model – whether it involves direct sales, subscriptions or reseller business.

There is no uniform US federal data protection law: data protection in the US is largely a matter for the individual states, each with its own state privacy laws and its own systems of fines. The best known of these is the California Consumer Privacy Act (CCPA), which imposes specific rights of access, erasure and objection on companies with Californian users – regardless of whether the company itself is based in the US. For SaaS providers with German GDPR processes, this means that their European compliance structure does not automatically cover US requirements.

We assess which US data protection obligations apply to your product and user base, and highlight where your GDPR processes need to be supplemented. This creates a data protection framework that is effective in California and other US states, without requiring you to set up a duplicate compliance structure for Europe.

Many software products are based on open-source components whose licence terms are interpreted and enforced differently in the US than in Germany – this applies to copyleft licences such as the GPL as well as to permissive licences. Anyone entering into negotiations with US customers or US investors must expect the licence chain to be scrutinised in detail as part of a due diligence review – right down to the individual component.

We can help you review your open-source licence chains and identify areas where improvements are needed before an investor or client due diligence process begins. This ensures you are well prepared for the review, rather than having to answer questions only once the process is already underway.

Direct sales, resellers and system integrators are the most common distribution channels for software in the USA – and each comes with its own contractual requirements: commission arrangements and exclusivity for resellers; liability and support issues for system integrators; and differing termination and non-competition clauses depending on the distribution model. A contract that is suitable for direct sales does not automatically apply to a reseller or partner model.

We provide legal support for the establishment of your US sales structure, from the initial partner agreement through to ongoing support, and tailor each agreement to the specific sales model.