Representations and Warranties Indemnification Liability Caps Evolution of IT Licensing: From Software Licensing to Software as a Service Representations and Warranties Indemnification Liability Caps

SaaS Agreements: Reps & Warranties Warranties typically very limited Performance in accordance with [the Documentation/Services Policies] “in material respects” Reasonable and appropriate measures to secure Customer Content against accidental or unlawful disclosure or misappropriation No viruses or other malware For cases where cloud systems will interact with Customer systems Disclaimer of all implied and other warranties In some cases, SAAS Provider will make documentation available but may be unwilling to rep or covenant compliance

SaaS Agreements: Indemnification By Provider: indemnity is often only for non-infringement Provider obligations: modify the service, obtain a license, or terminate the service Commonly negotiated exceptions: Combinations with other services/technology Use outside of scope provided in user documentation Use of superseded version By Customer: Unauthorized or unlawful use of the service Infringement by Customer Content

SaaS Agreements: Limitations on Liability Commonly negotiated exclusions Consequential damages Punitive damages Liability cap Most common cap is 12 months fees May include separate caps for different losses Confidentiality SLA failures Reduced statute of limitations