Businesses today "live" on software: ERP, CRM, accounting software, e-commerce platforms. Yet software purchase/licence contracts are often signed hastily — on the provider's template, barely negotiated. When incidents strike (service outages, held data, unreasonable fee hikes), companies discover what they actually signed.
This article covers negotiation points for three common technology contracts: SaaS, software licences, and technology transfer.
Table of contents
- 1. Three models: SaaS, licence, technology transfer
- 2. SaaS contracts: the SLA is the heart
- 3. Customer data: who owns, who protects
- 4. Software licences: negotiating rights scope
- 5. Technology transfer: distinctive points
- 6. IP in technology contracts
- 7. Termination and the data trap
- 8. Negotiation checklist
- 9. FAQs
- 10. When to work with counsel
- References
- Language versions
1. Three models: SaaS, licence, technology transfer
| Model | Nature | Contract focus |
|---|---|---|
| SaaS | Rented internet-service access, recurring fees | SLA, data security, termination/data migration |
| Software licence | Rights to use a software copy | Rights scope (users, devices, territory), maintenance |
| Technology transfer | Know-how, processes, training | Technology scope, training, know-how confidentiality |
Confusing models leads to misplaced negotiation — e.g., demanding "perpetual maintenance" in a SaaS contract (updates are already in the subscription).
2. SaaS contracts: the SLA is the heart
The Service Level Agreement is the most important clause:
- Uptime commitment: availability ratio (e.g., 99.9%) and measurement — where measured, whether maintenance windows excluded;
- Service credits: fee reductions for SLA breaches — usually the exclusive remedy, not full damages;
- Response/remediation times by severity;
- Exclusions: scheduled maintenance, force majeure, customer-side faults.
Read the exclusive-remedy clause before signing — many companies are stunned when a serious outage is "compensated" with a few percent of subscription fees.
3. Customer data: who owns, who protects
SaaS contracts must clearly provide:
- Data ownership stays with the customer — the provider processes only to deliver the service;
- Security measures and breach-notification duties;
- Compliance with Vietnam's personal data protection law — an independent legal duty that cannot be contracted away;
- Data export rights and deletion/return timelines on termination.
4. Software licences: negotiating rights scope
Five factors determining licence value and cost:
- Subjects: concurrent vs named users, device counts, servers;
- Territory;
- Term: perpetual vs subscription; renewal and fee-increase terms;
- Derivative rights: modification, integration, sub-licensing — typically prohibited by default;
- Termination: conditions and consequences (cease use, delete copies, any fee refunds).
Broader licences cost more — negotiate scope to actual needs (don't overbuy "to be safe").
5. Technology transfer: distinctive points
Technology transfer differs from pure software licensing in its subject: technical know-how, processes, training — "brains", not packaged products.
Contracts should cover:
- Transfer scope (documents, know-how, training);
- The transferor's training and technical-support duties — how detailed, how long;
- Know-how confidentiality — during and after the contract term;
- Liability limits for application results (the transferor warrants delivering the technology as described, not business outcomes);
- Contract registration where the law requires it.
6. IP in technology contracts
- Software is a copyright subject under the IP Law — users hold only licensed rights, not ownership;
- For custom development contracts: clearly state who owns the deliverable — it doesn't automatically belong to the ordering party without agreement;
- Non-infringement warranties and indemnification for third-party IP disputes.
7. Termination and the data trap
The clause many skip at signing and regret at termination:
- Transition period for data export;
- Export formats (usable or useless raw files?);
- The provider's data-deletion deadline after return;
- Who bears migration-support costs.
Without it, companies risk "locked" data when switching providers — negotiated from a hopeless position.
8. Negotiation checklist
- ☐ Identify the right model (SaaS / licence / technology transfer)
- ☐ SLA: uptime, service credits, remediation times, exclusions
- ☐ Data: ownership, security, export/deletion on termination
- ☐ Licence: user/device/territory/term scope
- ☐ IP: who owns custom-development deliverables
- ☐ Termination: transition period, data formats, migration costs
- ☐ Liability caps and exclusive remedies — read carefully before signing
9. FAQs
How do SaaS contracts differ from traditional software licences? The delivery model: a traditional licence grants rights to use a software copy; SaaS provides internet-service access on a recurring basis. Consequence: SaaS contracts center on SLAs, data security, and termination/data-migration; licence contracts center on rights scope and maintenance.
What should an SLA in a SaaS contract cover? Four groups: (1) uptime commitment and measurement; (2) service credits for breaches (usually the exclusive remedy); (3) response/remediation times; (4) exclusions. Read the exclusive-remedy clause before signing.
How is customer data protected in a SaaS contract? The contract should provide: customer data ownership; security measures and breach notification; personal data protection compliance; export rights and deletion/return timelines on termination.
What licence-scope points need negotiation? Five factors: (1) licensed subjects; (2) territory; (3) term and renewal; (4) modification, integration, sub-licensing rights; (5) termination conditions and consequences. Broader licences cost more.
What is special about technology transfer contracts? The subject is technical know-how, processes, training. Contracts should cover: transfer scope, training/support duties, know-how confidentiality, liability limits for application results, and registration where required.
What happens to company data when a SaaS contract ends? A good contract provides: a transition period for export; export formats; the provider's deletion deadline; who bears migration costs.
10. When to work with counsel
Technology contracts are where "the provider's template" meets "the company's real needs" — counsel rebalances: negotiating SLAs, licence scope, data and IP clauses to protect the company instead of signing the seller's template wholesale.
For technology contract review and negotiation, contact FLAT Law Firm — hotline 0988424851.
References
- Civil Code No. 91/2015/QH13 (effective 01/01/2017).
- Law on Intellectual Property (current text — check when applying).
