7 Questions to Ask Before Signing a SaaS Contract

The demo was polished, the references were glowing, and the price looks reasonable. Then the contract arrives, and the details that decide whether this purchase pays off or becomes a problem are buried in the fine print. Before you sign, press on these seven questions.

1. What is the true total cost? Start with the quoted subscription, then add implementation fees, onboarding, premium support tiers, API call limits, storage overages, and training. Ask for a three-year cost projection at your expected growth, not just year-one pricing.

2. How are renewals and price increases handled? Many contracts auto-renew with uncapped increases. Negotiate a cap on annual increases, ideally tied to a fixed percentage or an inflation index, and set the notice period for non-renewal so you do not miss it.

3. What happens to our data if we leave? Confirm you own your data, can export it in a usable format, and how long the vendor retains it after termination. A vendor who is vague here is telling you something.

4. What do the service levels actually guarantee? An uptime percentage means little without defined remedies. Look for service credits, response times by severity level, and the right to terminate for repeated failures.

5. How is our data secured? Ask for current security attestations such as SOC 2 or ISO 27001, details on encryption, breach notification timelines, and the list of subprocessors who touch your data.

6. How flexible is the license? Can you reduce seat counts at renewal, or only add them? What happens if you merge, divest, or reorganize? Rigid minimums can leave you paying for shelfware.

7. What is the exit plan if the vendor changes? Acquisitions, product sunsets, and strategy pivots happen. Ask what protections exist if the vendor is acquired or discontinues the product, including termination rights and refund terms.

Bring the right people in. Procurement, legal, security, and the business owner each see different risks. Involve them before the final round of negotiation, when you still have leverage, rather than after the verbal commitment.

Use timing to your advantage. Vendors are most flexible near the end of a quarter or fiscal year. If you have alternatives, make that clear. Competitive tension remains the most effective negotiating tool you have.

Get promises in writing. Anything the salesperson said that matters to your decision, from roadmap commitments to included features, belongs in the contract or an order form addendum. If it is not written down, assume it does not exist.

These questions will not slow down a good vendor. The ones who welcome the scrutiny are usually the ones worth signing with.