Ben Oelsner: There is some legal risk with click-through agreements. They can be applied a little more difficult than signed agreements, as it may be easier for a party to assert that it is not bound by a click-through agreement. However, the commercial benefits of a click-through agreement may outweigh the risks. The efficiency of the contracting process makes it easier for customers to agree to your terms. This can lead to more customers and therefore more turnover for the company. The SaaS agreement regulates the provision of software and services (SaaS) to customers via the Internet. On the contrary, a saaS agreement is a service level agreement (SLA). The neglected question will be whether the customer will be reimbursed if he terminates the contract for no reason. The client`s argument is that he does not have to pay for services he does not receive. However, the SaaS supplier can argue that it does not have to reimburse the fees paid in advance. The customer only makes a business decision to go through the agreement. The cost of the loss of these costs by the customer should be taken into account in this decision, as (i) the customer who has committed for the entire duration and must pay for that term, that he later decides to terminate this period without cause, (ii) the supplier may have spent a significant amount on the implementation of the services and (iii) the customer has the largest number , if not all, benefits of using services in the first few months of the term.
It is a good practice to have a safeguard language that leaves these terms, but changes the structure so that the agreement is renewed only if both parties agree in writing. As always, be sure to meet the expiry date and data 30 and 60 days before the expiry date. Also create a simple document that allows a simple renewal of the agreement without negotiation. You want to give the customer the maximum notification and make the renewal as simple as possible. While Y-Combinator`s aforementioned SaaS agreement is sound, you should be aware of its limitations: a simpler agreement with fewer points of disagreement would avoid unnecessary back-and-forth on every minute of details of the agreement. Acting like your agreement is the only one to use, but don`t be surprised when they send them to you. Understand that the only way to get your business is to use their form and that there is probably extra time and cost for you, because it probably needs to change and negotiate. However, some customers cannot accept an automatic extension and want it removed.
So you can design an automatic renewal clause to include the term «initial» and the «conditions of extension,» which are defined together, are the «terms.» Look at the Y-Combinator SaaS agreement. Of course, the question is how much the refund will be. A reasonable amount would be the amount of royalties paid in advance for the period following the end of the contract. The reason a refund is appropriate is that the customer does not receive benefits as a result of the termination he has paid.