SaaS subscription terms: what should they contain? (2026)

What are SaaS subscription terms?

SaaS subscription terms (also called SaaS Terms of Service, subscription conditions or terms of use) are the legal framework that governs the relationship between a SaaS provider and the provider's customers. "SaaS" (Software as a Service) covers software delivered over the internet as a subscription, as opposed to software installed locally.

SaaS subscription terms are not the same as:

• A privacy policy, which describes how you process personal data
• A cookie policy, which describes the use of cookies
• A data processing agreement, which governs the processing of the customer's personal data (required by the GDPR)

The subscription terms describe the business relationship itself: what the customer pays for, what you deliver, what happens if something goes wrong, and how the agreement can be terminated.

Who needs SaaS subscription terms?

Any business that sells software or digital services on a subscription basis needs clear subscription terms. This includes, among others:

• B2B SaaS: software for businesses (CRM, accounting, HR systems, project management)
• B2C SaaS: software for consumers (streaming, productivity apps, storage)
• API products: access to data or functionality via an API
• Platforms and marketplaces: digital services with user sign-up
• E-learning and course platforms: access to digital course content on subscription

Without clear terms, you as a provider are vulnerable to:

• Refund claims that were not agreed
• Disputes about what is included in the subscription
• Use of your product in ways you have not approved
• A lack of clarity about the allocation of liability on outages

The 12 key elements of SaaS subscription terms

1. The parties and definitions

State clearly who the terms apply to:

• The provider's full name, CVR number and address
• Who "the customer" is (a business, a private user or both)
• Define key terms: "the Platform", "the Service", "Subscription", "User", "Administrator account" and more

Clear definitions prevent interpretation disputes.

2. The scope of the subscription and access rights

Describe precisely what the customer buys:

• Which features are included at which subscription level?
• Are there limits on the number of users, storage, API calls or transactions?
• What is required to create an account (age, CVR, acceptance of the terms)?
• Is the licence personal, or can it be transferred to others?

Many disputes arise from a lack of clarity about what the subscription actually gives access to.

3. Payment terms

• Price and price level: state all prices (excluding or including VAT) and what happens if prices change
• Billing period: monthly or annual? Paid in advance or in arrears?
• Automatic renewal: does it apply? And with what notice can the customer cancel?
• Means of payment: credit card, bank transfer, invoice?
• Late payment: when is access suspended, and what is the interest on late payment?
• Price increases: with what notice can you raise the price?

Tip for B2C: If you sell to consumers, the Consumer Contracts Act and the Sale of Goods Act rules on digital content apply, with strong consumer-protection rules. Among other things, consumers have as a rule a 14-day right of withdrawal. For a digital service or digital content, however, the consumer loses the right of withdrawal if delivery begins with the consumer's prior express consent and acknowledgement that the right of withdrawal thereby lapses.

4. The term of the agreement and termination

• Minimum period: is there a tie-in? Typically 0, 1 or 12 months
• Notice from the customer: must it be given 30, 60 or 90 days before?
• Notice from the provider: with what notice can you terminate the customer?
• What happens to the customer's data on termination? Export, deletion, retention for a number of days?

A lack of clear termination rules is one of the most common causes of disputes in SaaS.

5. Service Level Agreement (SLA)

An SLA (Service Level Agreement) defines the minimum service level you commit to:

• Availability (uptime): for example 99.5% or 99.9% monthly uptime
• Planned maintenance: with what notice, and at what time of day?
• What happens on an outage? Compensation, credit or no compensation?
• Support: which channels, what response times, and does it apply only on business days?

An SLA is not mandatory, but B2B customers expect it, and it gives both parties clear expectations.

6. Limitation of liability

The limitation-of-liability clause is one of the most important and most underrated parts of SaaS terms:

• Direct loss vs. indirect loss: typically limit liability to direct loss, and exclude operating loss, lost profit, data loss and more
• Monetary limitation: typically limit to what the customer has paid within the last 12 months
• Force majeure: you are not liable for outages due to war, cyber attacks, natural disasters and more

Important: Limitation-of-liability clauses towards consumers are subject to strict rules and cannot fully derogate from consumer protection. Consult a lawyer if you sell B2C.

7. The customer's obligations

State what the customer is responsible for:

• Correct and up-to-date contact details
• Secure storage of passwords and login details
• Compliance with the law when using the platform
• A ban on misuse (reverse engineering, scraping, selling access to third parties)
• Responsibility for their own users and sub-users

8. Intellectual property rights

• Your software, code and design are and remain your property
• The customer's data: what does the customer own? (Typically all the data the customer uploads)
• Licence: the customer receives a limited, non-exclusive right to use
• Feedback and suggestions: what happens to improvement suggestions from the customer? Can you use them freely?

9. Confidentiality and data processing

• State that both parties treat each other's confidential information confidentially
• Refer to your data processing agreement, which is mandatory when the customer is a business and shares personal data with you
• State which third-party systems you use (infrastructure providers and sub-processors)

GDPR note: If your SaaS processes personal data on behalf of the customer, you are the data processor and the customer is the data controller. In that case there must be a valid data processing agreement, and it is a legal requirement under GDPR Article 28.

10. Changes to the terms and the service

• State with what notice you can change the terms (typically 30 days)
• Describe what happens if the customer does not accept the changes (termination)
• State your right to change or discontinue functionality

11. Choice of law and venue

• State that Danish law applies
• State at which court disputes are decided (for example the Maritime and Commercial Court or the provider's home court)
• Consider an arbitration clause for B2B

12. Entry into force and acceptance

State clearly when the customer accepts the terms:

• On registration and creation of an account
• On use of the platform
• On express acceptance (checkbox, signature, email)

In Denmark and the EU, it is good practice to have active acceptance, that is the customer actively ticks a box or signs. Passive acceptance ("by continuing to use, you accept") is legally weaker.

SaaS subscription terms vs. terms of trade

Many providers use these terms interchangeably, but there is a difference:

Aspect	SaaS subscription terms	Terms of trade
Focus	Use of the software and the service	Trade in goods or services
Contains	Licence, uptime, data, termination	Delivery times, right of return, payment
Best suited to	SaaS, API, platforms	Webshop, consultants, suppliers

You may need both. A SaaS business that sells software and offers consultancy services should have both sets of terms.

SaaS and the GDPR: mandatory legal documents

If you sell SaaS to businesses in the EU, you are usually the data processor, because you process personal data on the customer's behalf. That requires:

1. A data processing agreement (DPA)
2. A privacy policy for your own users' data
3. A cookie policy if your platform uses cookies

If you lack a data processing agreement, you risk fines that, under the GDPR, can reach up to EUR 20 million or 4% of global annual turnover, whichever is higher.

Typical mistakes in SaaS subscription terms

1. Copied terms from foreign services. English or American terms are not adapted to Danish and EU law. Limitations of liability, the right of withdrawal and GDPR requirements differ significantly from US law.

2. No clear SLA. No definition of uptime means the customer has unlimited expectations. Even a simple SLA protects you against unreasonable claims.

3. A missing termination procedure. What happens to the customer's data on termination, and when is it deleted? A lack of answers creates legal problems and GDPR problems.

4. A weak acceptance mechanism. "Continued use constitutes acceptance" does not always hold up legally in the EU. Ensure active acceptance on sign-up.

5. No data processing agreement. If you handle personal data for the customer (emails, usernames, activity data), a data processing agreement is mandatory under the GDPR.

Conclusion

Clear SaaS subscription terms protect your business from day one. The most important elements are a precise description of what the subscription gives access to, clear payment and termination rules, a well-considered limitation of liability and the necessary GDPR documents. Be especially careful if you sell to consumers, where consumer protection sets limits on what you can agree.

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The content of this article is for information purposes only and does not constitute legal advice. SaaS law is complex and depends on your business model, customer group and data processing. Contact a lawyer specialising in IT law for advice adapted to your specific situation.