Audit law in SaaS contracts: how to properly manage it?
The audit clause is an important clause that is too often overlooked in SaaS. What should it include?
The right to audit is a frequent but sensitive clause in SaaS contracts, which is particularly required by key account customers. If it is not precisely defined from the initial drafting of the contract, this right can quickly become intrusive, imprecise or even inapplicable.
The right to audit allows the customer to verify that the SaaS company respects its commitments, especially in terms of security and regulatory compliance (such as GDPR). These controls reassure customers, especially large companies or financial institutions, who have strong regulatory obligations.
However, in a SaaS context, an undefined right to audit can create problem situations:
To avoid these excesses, the audit clause must be precise, realistic and adapted to your operational model.
Here are the concrete recommendations that I always recommend including in your contracts:
The right to audit must exclusively concern:
It is best to exclude any general audit, such as verifying the commercial aspects of the contract. They are often irrelevant in the context of a SaaS audit.
In the SaaS model, on-site auditing is rarely relevant. It introduces unnecessary security risks and service interruptions. Specify that:
This measure ensures data security and operational continuity.
SaaS companies often use cloud or infrastructure subcontractors. These big players generally do not allow their own customers to conduct direct audits. So you need to:
This precision avoids requests that are impossible to satisfy and create a significant contractual risk.
To avoid untimely or excessive audits, set:
This allows for better internal organization and prevents unnecessary interruptions in your business.
If the customer wants to use an external auditor, impose:
These precautions protect your sensitive and strategic information.
Request to receive the audit report for validation. You should be able to:
This approach avoids any misinterpretation. The audit report will be fundamental in the event of a dispute so your point of view must be taken into account.
If the audit reveals a disagreement or an area for improvement, clearly state that:
This allows you to maintain your technical and commercial autonomy.
A well-written audit clause is essential to secure your business and reassure your customers. It avoids unnecessary conflicts, reduces legal risks, and effectively protects your commercial and technical interests.
Accepting an audit right is normal and sometimes even required by regulations (in particular GDPR). However, it must be strictly and realistically framed.
Don't neglect the drafting of your audit clause. A good clause prevents conflict situations and maintains a healthy and productive customer relationship.
If you want to secure your SaaS contracts, I am at your disposal to assist you in drafting and negotiating these sensitive clauses.
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I have been supporting software and SaaS companies for more than 10 years, to structure their business, protect their intellectual property and improve their contracts.
