How to review a SaaS agreement under English law

A software-as-a-service agreement governed by the law of England and Wales is a services contract wrapped around a licence and a data processing arrangement. Most of the risk sits in four places: what the supplier actually promises, how liability is capped, what happens to the customer's data, and how the customer gets out. This checklist works for either side, and LexDraft's SaaS MSA playbook runs the review in Word.

Last checked: 17 October 2026. The law changes; check the current position before relying on this page.

Structure and precedence

• Order of precedence. SaaS deals often combine online terms, an order form, a service level schedule and a DPA. Check which document wins in a conflict, and whether online terms can change without notice.
• Click-through terms. If users accept online terms when they log in, make sure those terms do not override the negotiated agreement.

Clause checklist

• Service description. Is the service described by reference to documentation the supplier can change? Customers should ask that changes do not materially reduce functionality.
• Service levels and credits. Check the availability measure, exclusions (planned maintenance, force majeure), how credits are claimed, and whether credits are the sole remedy. A sole-remedy clause can stop a customer terminating for persistent failure.
• Liability caps. Look at the cap amount (often fees paid in the previous 12 months), what sits outside it, and whether data loss and breach of confidentiality have their own cap. Exclusions in standard terms must satisfy the Unfair Contract Terms Act 1977 reasonableness test where it applies.
• Data protection. Where the supplier processes personal data for the customer, UK GDPR Article 28 requires a written contract with specific terms. Check that the DPA is attached, that subprocessors are listed, and how international transfers are covered. See our UK GDPR DPA guide.
• Security. Ask for specific security commitments (or a recognised certification), breach notification timing, and audit or report rights.
• Intellectual property. The supplier keeps the platform. The customer should keep its data and outputs. Check feedback clauses, licence restrictions and any rights to use aggregated or anonymised data.
• IP indemnity. Customers usually ask for an indemnity against third-party IP claims about the service. Check the exclusions and the remedies (modify, replace or refund).
• Fees and price increases. Check renewal pricing, caps on increases, and whether the supplier can suspend for late payment. Statutory interest may apply under the Late Payment of Commercial Debts (Interest) Act 1998 if there is no substantial contractual remedy.
• Term and renewal. Automatic renewal with a long notice window is common. Diarise it.
• Exit. Make sure the customer can export its data in a usable format for a period after termination, before deletion.
• Insolvency. Customers depending on a small supplier may want source code or data escrow, or at least a strong data return clause.
• Governing law. Name the law of England and Wales and cover non-contractual claims.

Customer versus supplier priorities

A customer usually focuses on service levels, the liability cap for data breaches, exit and price increases. A supplier usually focuses on the overall cap, the sole-remedy status of service credits, suspension rights and limits on custom commitments. Decide which side you are on before the review, so you triage the findings correctly.

Review the SaaS agreement in Word with LexDraft

1. Open the SaaS agreement in Word, open LexDraft from the Home tab and set the jurisdiction chip to UK: England & Wales (or UK: Scotland or UK: Northern Ireland if that is the governing law).
2. Run the quick checks. They are rule-based and run without AI, catching undefined or unused defined terms, broken cross-references, numbering gaps and inconsistent capitalisation.
3. Run the review with the SaaS MSA playbook. Findings are graded Critical, High, Medium or Low, and LexDraft flags standard terms that are missing.
4. Accept or reject each proposed redline. Accepted edits land as native Word tracked changes, ready for the other side.
5. Ask the Assistant to explain a clause in plain English or suggest wording for your side. Answers use UK spelling.
6. Look up any case you want to rely on in the Case law tab, then open the judgment on Find Case Law and read it yourself. UK judgments in LexDraft come from The National Archives' Find Case Law service, which only partially represents the activities of the courts and tribunals. Not every judgment or decision is included. Find Case Law does not include judgments from Scottish or Northern Irish courts or tribunals.

LexDraft does not give legal advice and does not summarise judgments. AI output can be wrong, so qualified counsel must check every redline before it goes out.

This guide is general information, not legal advice. LexDraft does not give legal advice; qualified counsel must review every draft. LexDraft is not affiliated with or endorsed by The National Archives or any court. Spotted something out of date? Email support@lexdraft.ai and we will fix it.