SaaS Reseller Agreement Checklist

What should go into a SaaS reseller agreement before you let another business sell your product?

The reassuring answer is that it doesn't have to be complicated, but it does need to be specific. SaaS reseller deals can go wrong when everyone is excited about the sales opportunity, but nobody has pinned down who owns the customer relationship, who supports the customer, how commissions work, and what happens to customer data.

If you're appointing a reseller, distributor or channel partner in Australia, your agreement should protect your software, your revenue and your customer experience. A generic reseller agreement often misses the software-specific details that matter most for a SaaS business.

What Is A SaaS Reseller Agreement?

A SaaS reseller agreement is a contract that lets another business promote, sell or arrange access to your SaaS product for customers, usually in return for a margin, commission or discount.

You might also hear it called a software reseller agreement, SaaS channel partner agreement, reseller contract for software or SaaS distribution agreement. The label matters less than the substance. The agreement should clearly explain what the partner can do, what they can't do, and how customers are handled after the sale.

In a SaaS context, there are a few common models:

• Referral model: The partner introduces leads to you, and you contract directly with the customer.
• Reseller model: The partner sells subscriptions to customers, often under your pricing rules or approved terms.
• Distributor model: The partner may manage a region, vertical or sales network, sometimes with sub-resellers.
• White label model: The partner sells your platform under their own brand, which needs extra care around IP, support and customer data.

For example, say CloudDesk Pty Ltd builds workflow software for accounting firms. It appoints a bookkeeping consultancy as a channel partner to sell annual subscriptions to its client base. If the agreement doesn't say whether CloudDesk or the consultancy owns the customer relationship, both businesses may later claim the renewal revenue. That's exactly the kind of dispute a clear SaaS reseller agreement is meant to avoid.

Do You Need A Separate Agreement From Your SaaS Terms?

Yes, you usually need a separate agreement because your SaaS terms govern customer use of the software, while your reseller agreement governs your relationship with the reseller.

Your customer-facing SaaS terms should cover things like account access, subscription fees, acceptable use, limitations of liability and termination rights between you and the end user. Your reseller agreement has a different job. It should cover sales rights, commission, marketing obligations, support roles, reporting, data handling and restrictions on the reseller.

In many deals, you'll need both documents to work together. The reseller agreement should say whether customers must accept your standard SaaS terms and conditions before accessing the platform. If the reseller uses its own customer terms, your agreement should say which minimum protections must be included.

This is especially important where your customer terms contain:

• licence limits, such as user numbers, territory or permitted business use
• acceptable use rules for your platform
• privacy and data processing terms
• service level commitments or exclusions
• payment, suspension and termination rights
• limitations of liability and warranty disclaimers

Templates can be a helpful starting point, but they often assume a simple goods resale model. SaaS is different because the product keeps running after the sale. Your agreement should be tailored to how your platform is delivered, supported and renewed.

Who Owns The Customer Relationship?

It depends on your commercial model, but your agreement should answer this directly because customer ownership is one of the biggest pressure points in SaaS reseller deals.

If you contract directly with the end customer, you'll usually want to make clear that the customer is your customer, even if the reseller introduced them. The reseller may receive commission for the initial sale and sometimes renewals, but it shouldn't be able to block you from supporting, renewing or communicating with the customer.

If the reseller contracts with the customer, the position is more nuanced. The reseller may own the commercial relationship, but you still need enough rights to protect your software, enforce usage rules and meet your privacy and security obligations.

Questions To Settle Early

• Who can invoice the customer? You, the reseller, or both in different situations?
• Who controls renewals? Is the reseller entitled to renewal commission, and for how long?
• Who can contact customers? Can you contact them for support, billing, product updates or legal notices?
• What happens when the reseller relationship ends? Do customers stay with you, move with the reseller, or get a choice?
• Can the reseller sell competing products? If not, define the restriction carefully so it's commercially reasonable.

Be careful with exclusivity. Giving a reseller exclusive rights to a territory or industry can be useful if they're genuinely investing in growth. But if they underperform, exclusivity can stop you from selling into your own market. If you do grant exclusivity, tie it to measurable targets, such as minimum annual sales or qualified opportunities.

What Should Your SaaS Reseller Agreement Checklist Include?

Your SaaS reseller agreement checklist should cover the commercial deal, the software licence, customer terms, data protection, support, payments, IP, termination and what happens after the relationship ends.

Here is a practical outline you can use when briefing your lawyer or reviewing a draft. This isn't a finished legal document. A lawyer should tailor it to your product, risk profile, sales model and customers before you use it.

1. Parties And Background: List each party's legal name, ACN or ABN, address and role in the arrangement.
2. Appointment: State whether the reseller is appointed as a referral partner, reseller, distributor, white label SaaS partner or another model.
3. Territory And Market: Define the region, industry vertical, customer type or sales channel the reseller may target.
4. Exclusivity: Say whether rights are exclusive, non-exclusive or conditional on sales targets.
5. Permitted Sales Activity: Explain what the reseller can say, do and promise when marketing your SaaS product.
6. Customer Contracting: State whether customers contract with you, the reseller, or both, and which terms apply.
7. Software Licence And Sublicensing: Set out whether the reseller can grant access, create accounts or sublicense your software to customers.
8. Fees And Commission: Cover pricing, discounts, payment timing, commission calculations, clawbacks, GST treatment and commission agreement mechanics.
9. Support Responsibilities: Allocate first-level support, technical escalation, onboarding, training and response processes.
10. Data Protection: Cover personal information, security standards, breach notification and Privacy Act 1988 obligations where they apply.
11. Intellectual Property: Confirm that you retain ownership of the software, trade marks, documentation, APIs and product materials.
12. Marketing Approval: Require approval for logos, claims, case studies, website copy and paid advertising using your brand.
13. Reporting And Records: Set out sales reporting, pipeline updates, customer lists, audit rights and invoice records.
14. Term And Termination: Cover the initial term, renewal, termination for convenience, breach, insolvency and underperformance.
15. Exit Plan: Explain what happens to customers, data, unpaid commission, confidential information and access after termination.

If your reseller is overseas, you may also need to think about governing law, overseas data transfers, tax withholding issues and local consumer laws. You can keep the agreement under Australian law, but that won't always stop overseas compliance questions from coming up.

How Should Commissions And Reseller Payments Work?

Your agreement should explain commission in a way that someone can calculate without guessing, because unclear payment clauses are a common source of tension.

Start with the basic model. Some resellers buy subscriptions from you at a discount and resell them at their own price. Others don't buy anything themselves, but receive a percentage commission on customer payments you actually receive. Both can work, but they create different risks.

A clear payment clause should cover:

• whether commission is based on gross revenue, net revenue or amounts actually received
• whether GST is included or excluded in the calculation
• when commission is earned, such as on signed order, customer payment or after a cooling-off or refund period
• whether commission applies to renewals, upgrades, add-ons or expansion seats
• what happens if the customer cancels, downgrades, receives a refund or doesn't pay
• whether commission continues after the reseller agreement ends

A Simple Worked Example

Say your reseller sells an annual SaaS subscription for $20,000 plus GST, and the agreement gives them 20% commission on net subscription fees actually received in the first 12 months only.

If the customer pays the full $20,000 upfront, the commission is $4,000 plus any GST treatment that applies to the reseller's invoice. If the customer pays monthly at $1,666.67 plus GST, you might pay commission monthly as payments come in, rather than paying the full $4,000 on day one.

If the customer cancels after 6 months and receives a refund for the unused period, the agreement should say whether commission stops, is reduced, or must be clawed back. Without that detail, you may end up paying commission on revenue your business didn't keep.

If your reseller is promising discounts or custom pricing, set approval rules. For example, you might allow discounts up to 10% without approval, but require written approval for anything larger or any non-standard payment term.

Who Handles Support, Data And Compliance?

You should allocate support, data and compliance responsibilities in writing because customers won't care whose job it was internally when something goes wrong.

For support, decide whether the reseller provides first-level help, such as onboarding, basic account questions and user training, while you handle technical issues. Your agreement should say how issues are escalated, what information the reseller must collect, and whether the reseller can promise service levels to customers.

If you don't want resellers making promises about uptime, response times, integrations or security certifications, say so clearly. A reseller's marketing claim can create a customer expectation you never agreed to.

Data Protection And Privacy

For data, work out who collects personal information, who stores it, who can access it and who must respond if there's a data breach. The Privacy Act 1988 and Australian Privacy Principles may apply to your business, especially if you have annual turnover over $3 million, handle health information, provide certain credit-related services, or fall within another covered category.

If the Notifiable Data Breaches scheme applies, you need processes to assess a suspected eligible data breach. The assessment should usually be completed within 30 days after you become aware of reasonable grounds to suspect an eligible data breach. If notification is required, affected individuals and the Office of the Australian Information Commissioner may need to be notified as soon as practicable.

Your reseller agreement should also cover confidentiality, security standards, password practices, audit rights, data deletion and whether customer data can be used for analytics, AI training or product improvement. If customer data may leave Australia, say where it may be transferred and who is responsible for checking privacy requirements.

What Legal Risks Are Specific To Software Resellers?

The main software-specific risks are unauthorised sublicensing, IP misuse, misleading sales claims, data mishandling and reseller promises that don't match your SaaS terms.

Start with sublicensing. If the reseller can create accounts or grant customers access to your platform, your software licence agreement should say exactly how that permission works. If they can't sublicense, say that too. Otherwise, a reseller may assume they can package your software into their own broader service offering without your approval.

Protect your intellectual property carefully. Copyright automatically protects your software code, documentation and many creative materials in Australia. Trade marks, such as your product name and logo, can be registered through IP Australia. Your reseller agreement should make clear that using your brand to sell the product doesn't give the reseller ownership of your IP.

The Australian Consumer Law also matters in B2B SaaS sales. Resellers shouldn't make misleading claims about your product's features, integrations, performance, security or pricing. If a reseller tells customers your platform integrates with Xero, MYOB or Salesforce when it doesn't, your business may still be pulled into the fallout.

Set practical guardrails, such as:

• approved sales scripts, product descriptions and pricing documents
• a rule that technical claims need your written approval
• clear limits on guarantees, warranties and service levels
• brand guidelines for logo and trade mark use
• approval rights for paid ads, landing pages and case studies
• confidentiality obligations for roadmap, pricing and customer information

Also check restraints and exclusivity carefully. Australian law can treat broad restraints as unenforceable if they go further than reasonably needed to protect legitimate business interests. The drafting needs to match the actual risk.

Key Takeaways

• A SaaS reseller agreement is different from your customer SaaS terms because it governs your channel partner relationship.
• Your agreement should clearly deal with customer ownership, renewals, commissions, support roles and what happens when the reseller arrangement ends.
• Software-specific clauses matter, especially sublicensing, IP ownership, brand use, data protection and limits on reseller promises.
• Commission clauses should use clear numbers and timing rules, including what happens with refunds, cancellations and unpaid invoices.
• Privacy Act 1988, Australian Consumer Law and IP protection issues can all be relevant to an Australian software reseller agreement.
• A checklist is a helpful starting point, but your reseller contract should be tailored to your SaaS product, pricing model and growth plans.

If you'd like help with your SaaS reseller agreement, channel partner terms, software licensing clauses or data protection wording, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.