Overview of a White Label Solution Agreement
A White Label Solution Agreement is a contract between a supplier and a customer of a White Label SaaS (Software-as-a-Service) solution.
Essentially, a White Label Solution Agreement sets out the terms and conditions on which the supplier will provide the SaaS solution to the customer, including the supplier’s disclaimers and limits on the supplier’s liabilities in providing the SaaS solution.
Most importantly, a White Label Solution SaaS Agreement sets out the service level agreement committed to by the supplier: for example, the services uptime commitment, how the services uptime metric will be measured, the commitment in responding to requests and problems, and service credit entitlement if the services uptime metric is not met.
What is in a White Label Solution Agreement?
Essentially, a SaaS agreement must cover these areas:
Details of the subscription service
Duration of subscription
The minimum duration of the subscription before the customer can cancel. This is also known as the commitment period.
Service Level Agreement (SLA)
Essentially, an SLA must include minimum levels of service that must be met by the SaaS platform. These service commitments must be measurable and reportable to customers on request. However, if there is a failure on the platform or if the service levels are violated, the vendor must typically provide a remediation plan. Then, failing the remediation plan, there are typically penalties such as service credits or refunds.
Examples of SLA metrics include: Response time to requests and problems. Also, support hours and channels for making help requests. As well as uptime commitments and unscheduled downtime limits.
Notably, SLAs are usually for enterprise clients who make large upfront investments on the platform.
Amount of upfront and recurring subscription fee
Typically, most SaaS platforms will have a monthly service fee. Or, an annual one (often at a discount). Usually, there are no upfront fees unless there are significant setup costs.
When should you use a White Label Solution Agreement?
Typically, a SaaS agreement is for larger enterprise contracts. In essence, these contracts have terms that are often customizable to meet the IT requirements of the client. Additionally, for platforms where clients self-register and can start using the platform, there is usually an agreement to the Terms of Service that you can tick online. Essentially, this goes along with the entry of a credit card number for online payment.
Generally, you can use Zegal’s SaaS agreement to begin negotiations with larger clients.
Should You Include an SLA (Service Level Agreement)?
Chiefly, an SLA is typically for larger engagements with enterprise clients. For turnkey SaaS solutions, clients typically expect an environment free of service outages. Additionally, cancellation is typically easier if the service levels have not been met.
What Other Documents Should You Look At?
Terms of Service
Essentially, having a Terms of Service (or Terms and Conditions) helps protect a SaaS provider from potential liabilities. Also, it helps you prevent clients from abusing your services or using your services in an unlawful way.
In summary, creating a comprehensive SaaS agreement with your client provides clear expectations on the types of services that you will deliver. This protects both sides from service issues. Generally, should you get your agreement reviewed by a lawyer? So, always ensure that a lawyer reviews all the different terms and conditions. Additionally, try to draft a standard template you can reuse for all clients. A SaaS business thrives on uniformity to be able to scale. Having bespoke versions always makes that task harder.
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Along with this document, make sure you see these other templates in our library:
- Shareholder Agreement
- Option Agreement
- Employee Option Repurchase Agreement
- Share Appreciation Rights Plan
- Share Option Plan
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