23/08/2026
If you see this edit in an agreement, be worried.
Be very worried.
This edit alerted us to the fact that we had made product roadmap commitments on our SaaS product to the customer.
Big implications on product development and revenue recognition.
If you want to know why this edit is such an issue, download “10 SaaS Contract Basics SaaS Attorneys Must Know!”
https://www.techattorneycohort.com/freesaasguide1
15/07/2026
In SaaS, the indemnity against third-party IP claims is generally uncapped. So, there are no limits on the vendor’s liability to fulfill the indemnity.
But, an uncapped IP indemnity may not cover one of the most painful consequences of the infringement: replacing the SaaS.
Assume the IP indemnity is excluded entirely from the limitation of liability cap.
The vendor must defend the third-party claim and pay the settlement or judgment without any contractual cap. Or if it’s a broader indemnity provision, it may also be required to cover broader losses related to the claim.
That is significant protection for the customer.
However, the indemnity also includes limited infringement remedies which require the vendor to procure for the continued use of the SaaS, modify or replace it, or terminate the subscription and refund unused prepaid fees.
Those remedies are generally stated as the customer’s sole and exclusive remedies.
So, after the legal costs and liability arising from the claim, and a refund, the customer’s most painful problem, broader replacement and transition costs, may not be covered.
The customer will need to procure a replacement platform, migrate its data, rebuild integrations, retrain users and redesign business processes around the new service.
So even so indemnities may be uncapped and the customer may receive a refund of unused fees, they still will be left carrying the cost of replacing a platform that has become embedded in its operations.
This is an issue that is easy to miss because the negotiation often focuses on whether the IP indemnity is capped or uncapped, or how broad the indemnity language is. Rarely do the parties negotiate over the remedies and replacement costs, if the infringement cannot be remedied and the agreement is terminated.
Should reasonable migration and replacement costs be recoverable under the IP infringement provisions, subject to a separate cap or agreed transition obligation?
Don’t get stuck in SaaS negotiations on key issues you don’t have a good answer to. Download my free guide, 10 SaaS Contract Basics, to avoid the most common pitfalls → https://www.techattorneycohort.com/freesaasguide1