Software-as-a-Service (SaaS) has become an essential part of modern business operations. From customer relationship management (CRM) platforms and accounting software to cloud storage, project management tools and online booking systems, businesses increasingly depend on third-party software providers to manage their daily activities.
Although SaaS solutions offer flexibility, scalability and convenience, they also create legal risks that businesses should consider before signing a subscription agreement.
In Thailand, SaaS contracts may involve several areas of law, including contract law, intellectual property, data protection and cybersecurity. A poorly drafted agreement can expose a business to unexpected costs, service interruptions, intellectual property disputes or difficulties accessing important business information.
This article examines seven important legal clauses that businesses operating in Thailand should review before entering into a SaaS agreement.
Scope of Services and Subscription Terms
The first step is to understand exactly what the SaaS provider is promising to deliver.
Some agreements describe services in broad terms without clearly identifying the software features, subscription limits or technical support included in the package.
Businesses should ensure that the agreement specifies:
- The software services and functionalities included in the subscription.
- The number of authorised users and permitted devices.
- Subscription fees and payment schedules.
- Additional charges for upgrades, storage or premium features.
- Service limitations and technical requirements.
- The provider’s responsibilities for software maintenance and updates.
Clear service descriptions help prevent disagreements about what the provider is contractually required to deliver.
Intellectual Property Rights and Software Ownership
Intellectual property is one of the most important considerations in any software agreement.
Under Thailand’s Copyright Act B.E. 2537 (1994), computer programs are protected by copyright. Businesses should therefore distinguish between obtaining permission to use software and acquiring ownership of the software itself.
Most SaaS agreements grant customers a limited licence or subscription-based right to access the provider’s platform. This does not automatically transfer ownership of the software or its source code.
Businesses should clarify:
- Who owns the underlying software and source code.
- Whether the subscription grants an exclusive or non-exclusive licence.
- Who owns custom-developed features and integrations.
- Whether customers can export or reuse their own materials.
- What happens to intellectual property rights when the agreement ends.
Special attention should be given to customised software development. Under Sections 9 and 10 of Thailand’s Copyright Act, different default ownership rules apply to works created in the course of employment and works created on commission. Written contractual arrangements should clearly address ownership and licensing rights.
Data Protection and Confidentiality Obligations
SaaS platforms frequently process commercially sensitive information and personal data on behalf of their customers.
For businesses operating in Thailand, the Personal Data Protection Act B.E. 2562 (2019), commonly known as the PDPA, may apply depending on the nature of the data processing activities.
When a SaaS provider processes personal data on behalf of a customer, the parties should carefully assess their respective roles and obligations under the PDPA.
The agreement should address:
- The categories of personal data processed through the platform.
- The purposes and permitted scope of processing.
- The responsibilities of the customer and service provider.
- Confidentiality obligations for employees and subcontractors.
- Security measures designed to protect stored information.
- Procedures for handling personal data incidents.
- Data deletion or return when the agreement terminates.
Where appropriate, businesses should also consider whether a separate Data Processing Agreement (DPA) is necessary.
A clear contractual framework helps businesses understand how their information is handled and reduces uncertainty when working with external technology providers.
Service Level Agreements (SLAs) and System Availability
When a business relies on cloud software for daily operations, service availability becomes a critical commercial consideration.
A system outage can affect customer communications, online transactions, internal operations and revenue-generating activities.
A Service Level Agreement (SLA) should establish measurable service expectations, including:
- Guaranteed or target system availability.
- Scheduled maintenance periods.
- Technical support availability and response times.
- Procedures for reporting service interruptions.
- Incident resolution targets.
- Service credits or other contractual remedies where applicable.
Businesses should also determine whether service credits represent their only contractual remedy for downtime or whether additional remedies may be available in specified circumstances.
These provisions help establish accountability and provide a clearer framework for managing operational disruptions.
Limitation of Liability and Indemnification
Liability clauses determine how financial responsibility is allocated when something goes wrong.
Some SaaS agreements impose strict liability limitations that significantly restrict the compensation available to customers following a serious incident.
Before accepting these provisions, businesses should examine:
- Maximum liability limits and how they are calculated.
- Exclusions for indirect or consequential losses.
- Responsibility for unauthorised disclosure of confidential information.
- Liability arising from intellectual property infringement.
- Responsibility for security incidents and service failures.
- Indemnification obligations between the parties.
Businesses should pay particular attention to whether the liability cap is appropriate for the financial and operational risks associated with the service.
For example, a company using a SaaS platform to manage critical customer information may require stronger contractual protections than a business using a simple internal scheduling application.
Subcontractors, Third-Party Services and Data Transfers
Many SaaS providers depend on external infrastructure, cloud hosting companies, payment processors and other technology partners.
As a result, customer information may be processed or stored by multiple organisations rather than exclusively by the primary software provider.
Businesses should understand which third parties may access their information and what contractual safeguards apply to those relationships.
Important points to review include:
- Whether the provider can appoint subcontractors without prior approval.
- How customers are informed about material changes to subcontractors.
- What confidentiality and security obligations apply to third parties.
- Where business information and personal data are stored.
- Whether information may be transferred outside Thailand.
- What safeguards apply to relevant international data transfers under the PDPA.
International data transfers require particular attention when a SaaS provider uses overseas infrastructure. Businesses should assess the applicable PDPA requirements rather than assuming that the provider’s standard international hosting arrangements automatically satisfy Thai legal obligations.
Contract Termination, Data Portability and Exit Rights
One of the most overlooked aspects of a SaaS agreement is what happens when the customer wants to stop using the service.
Businesses may become dependent on a particular platform over time, making it difficult or expensive to migrate to another provider.
A well-structured agreement should explain:
- The contract duration and renewal conditions.
- Notice periods for termination.
- Grounds for termination following a contractual breach.
- Access to information during the transition period.
- Available data export formats and associated costs.
- Procedures for returning or deleting customer information.
- Assistance with migration to another service provider.
Businesses should also verify whether the provider can suspend access immediately in certain circumstances and whether customers receive sufficient notice and an opportunity to resolve the issue.
Effective exit provisions help businesses maintain operational continuity and avoid unnecessary dependence on a single technology provider.
Why Businesses in Thailand Should Review SaaS Agreements Carefully
Using a SaaS platform is not simply a technical decision. It is also a contractual and legal commitment that can affect business operations, intellectual property rights, customer information and financial exposure.
For companies operating in Thailand, reviewing these agreements before signing can help identify potential problems and ensure that contractual obligations are appropriate for the organisation’s activities.
A legal review should consider the specific service, the parties’ respective responsibilities, applicable Thai legislation and any cross-border elements involved in the arrangement.
Conclusion: Protect Your Business Before Signing a SaaS Agreement
SaaS agreements provide businesses with access to valuable digital tools, but the convenience of cloud-based services should not replace careful contractual review.
By examining service scope, intellectual property ownership, data protection, service availability, liability, subcontracting and termination rights, businesses can better understand their legal position and reduce avoidable risks.
Before entering into a new SaaS arrangement or renewing an existing subscription, businesses should ensure that the agreement reflects their operational requirements and provides appropriate legal protections.
Need legal assistance with a SaaS agreement in Thailand? PimLegal provides legal guidance on digital law, software agreements, intellectual property, data protection and online business risks. Contact our team to discuss how we can help protect your business in the digital environment.