Can SaaS contracts be concluded as service contracts?

Case law has qualified SaaS contracts as rental contracts since 2005 (ASP).

How do you achieve the applicability of service contract law for SaaS or DaaS contracts?

I. The concerns of our clients in sample cases:

1) SaaS: In many areas, the services we provide depend on foreign providers (Microsoft, Adobe, etc.) who provide their services in accordance with service contract law. In contrast to German tenancy law, it is therefore possible to change services during the term of the contract, discontinue functions, etc. The contractual provisions on the limitation of liability and warranty in the partner agreements with the companies in Ireland or the USA provide for practically no warranty and only very limited liability, whereas German rental law not only provides for the obligation to maintain and service all functions available at the time the contract is concluded, but also to provide a warranty that the software provided always meets the current technical, legal and professional requirements. These are requirements that the German distributor cannot grant a customer because its supplier does not assume such obligations.

Hence the desire of the German distributors of US-American partners to apply service contract law.

2) DaaS: Here too, the distributor cannot guarantee the accuracy, completeness or even the availability of all data because the content providers do not assume any corresponding supply obligations. The distributor will not be able to provide the services for checking and ensuring the quality of the data itself.

II For this reason, too, the desire to to apply service contract law. How can this be achieved in practice?

By describing the services accordingly. It must be made clear that no guarantee is given for the availability, up-to-dateness and accuracy of the data. As already emphasized several times, service contract law cannot be applied, for example, by sending the customer general terms and conditions with the heading service contract or by using the word service contract. Case law qualifies the applicable contract type according to the typical content of the services provided by the service provider. If you therefore use GTC that are ideally suited to service contract law, but the lawyer comes to the conclusion that the services you have promised are to be qualified under tenancy law, then the case law of the Federal Court of Justice applies: The GTC you used violate the "guiding principle" of the law and are therefore void. The statutory provisions then take their place. And these are the statutory provisions of tenancy law, which, as already shown, are intended to protect the consumer and are only suitable to a very limited extent when it comes to the provision of IT services.

Service contract law applies, for example, if you offer the customer to try (!) to provide the customer with the correct data, but not to assume any warranty for it, etc. You would have to make it clear that you do not want to assume any warranty. You would have to make it clear that you do not want to assume any warranty, more or less explicitly.

In short, service contract law applies, in which you promise the customer that you will try to provide them with software that has all the functions and features that were available yesterday (sorry for the irony, I use Microsoft).

Such a reduction in liability risks is then bought at the price of a reduction in the attractiveness of the offer. What I mean by this is that marketing and the desire to limit liability are almost in an antagonistic relationship here.

III Legally, the issue can be defused in two places:

You can enter into service contracts with short terms. The problem with service contract law is that the customer's investment in the wrong decision is fundamentally lost (exception: damages for non-performance, termination for good cause), whereas tenancy law has far-reaching liability and compensation options with the legal remedy of warranty.

Service contract law becomes a problem for the customer if he spends a lot of money for nothing. So you should unilaterally give them the option of terminating the contract at short notice or a trial period, etc. You have to give the customer the opportunity to gain trust. The disadvantage of this method is, of course, that the customer can terminate the contract at any time, making it more difficult to plan payment flows.

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