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Drafting Transition-Out Provisions in SaaS Agreements: Performance Requirements, Triggering Events, Fees, Damages

Recording of a 90-minute CLE video webinar with Q&A

This program is included with the Strafford CLE Pass. Click for more information.
This program is included with the Strafford All-Access Pass. Click for more information.

Conducted on Tuesday, February 15, 2022

Recorded event now available

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This CLE webinar will guide business counsel on expertly drafting the transition-out obligations within a service agreement. The panel will discuss how to address a triggering event for transition-out rights, how detailed a statement of work must be, and what types of fees and damages, including consequential damages, a provision may include.


Increasingly SaaS customers are asking for detailed transition-out provisions in SaaS agreements. If such terms are not included in a SaaS agreement, the customer's counsel should consider whether adding these terms will protect a client's interests upon termination of the customer relationship.

When it comes to drafting the transition-out obligations, a customer contract drafter should consider the nature of the services and the impact of any termination. Where appropriate, customer's counsel should clearly define performance requirements for the service provider, as well as avoid broad standards of performance phrases such as "commercially reasonable efforts." The transition provision should set clear fee obligations to avoid changing rates during the transition.

When drafting a service provider contract, counsel should include terms that allow the customer to trigger the transition-out clause whenever an expiration or termination occurs, except perhaps where termination is due to the customer's non-payment of fees. Service providers may establish flexible fees in long-term engagements that contemplate market changes. Service providers should consider whether a customer can demand the return of its data in a specified format, and counsel should include terms addressing the administrative costs of this task.

Counsel for both clients and service providers must include how to return the client's data and how confidential information for the parties is handled and how it is returned or destroyed.

Listen as our expert panel discusses critical terms in the transition-out provisions of a SaaS agreement and how to clarify the language so that all stakeholders' interests are protected.



  1. Software as a service agreement
    1. Customer considerations
      1. Scope of services
      2. Triggering events
      3. Fees
    2. Service provider considerations
      1. Flexible fees
      2. Administrative costs
      3. Return of data
      4. Handling confidential information


The panel will address these and other key topics:

  • What are the key considerations that a customer will want in a transition-out provision of a SaaS agreement?
  • What are the key considerations that a service provider will want in a transition-out provision of a SaaS agreement?
  • How is data returned to the customer during a transition-out period?
  • What should customers and providers include regarding fees and damages in transition-out provisions?


Galkin, William
William S. Galkin, Esq.

Galkin Law

Mr. Galkin is an information technology and internet lawyer who has dedicated his legal practice to representing...  |  Read More

Quinones, Stephanie
Stephanie QuiƱones


Ms. Quinones regularly counsels entrepreneurs and in-house counsel on business contracting, technology and intellectual...  |  Read More

Schultis, Larry
Larry Schultis

Founding Partner
Schultis Law Group

Mr. Schultis focuses on IP transactions, and has substantial experience representing both technology consumers and...  |  Read More

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