Negotiating a SaaS contract should be about getting to yes—not getting stuck in an endless back-and-forth. Yet, too often, SaaS deals stall because of hidden risks buried deep in the contract. These roadblocks trigger legal objections, create uncertainty for buyers, and ultimately delay revenue.

At TermScout, we believe contracts should accelerate deals, not slow them down. That’s why we independently certify SaaS agreements to remove friction and build trust from the start. If you’ve ever experienced delays due to legal redlines or unexpected pushback, you’re not alone. Here are five of the most common hidden risks in SaaS contracts that can bring your deal to a screeching halt.

1. The "No Liability, No Problem" Clause (Except It’s a Big Problem)

It’s not uncommon for SaaS providers to include broad disclaimers of liability, essentially saying, “No matter what happens, we’re not responsible.” While this may seem like a standard risk mitigation tactic for vendors, it’s one of the fastest ways to stall a deal.

Why? Because most buyers—especially larger enterprises—simply won’t accept it. If a vendor isn’t liable for anything, it raises serious concerns about accountability. What happens if their platform goes down for days? What if a data breach occurs due to their negligence? A blanket waiver of liability will almost always trigger legal objections and force a round (or several) of negotiations.

How to Avoid Delays

Instead of an absolute liability disclaimer, align your contract with market standards. A balanced contract acknowledges some level of vendor responsibility, especially for direct damages related to breaches of confidentiality, gross negligence, or willful misconduct.

2. Overreaching Data Usage Rights

Data is a major concern in SaaS contracts. Many agreements contain overly broad language that grants the vendor the right to use customer data in ways that could create compliance risks. For example, clauses that allow the vendor to freely use, analyze, or even resell customer data can trigger serious legal redlines.

With GDPR, CCPA, and other privacy regulations tightening, companies can’t afford to sign contracts that don’t explicitly define how their data will be used, stored, and protected.

How to Avoid Delays

Make sure the contract clearly states that customer data remains the property of the customer, with limitations on how it can be used by the vendor. Explicitly exclude resale or broad usage rights that could introduce regulatory risk.

3. Non-Solicit and Non-Compete Restrictions on Customers

It’s not unusual for vendors to include non-solicitation clauses, preventing customers from hiring their employees. However, some SaaS contracts go further—restricting a company’s ability to work with competitors or even barring them from hiring anyone who previously worked at the vendor.

For businesses that rely on a competitive vendor marketplace, these restrictions can be deal-killers. Enterprise customers often flag non-competes and aggressive non-solicits as non-starters, leading to significant delays in contract negotiations.

How to Avoid Delays

Remove broad non-compete language. If non-solicitation clauses are necessary, limit them to direct hiring efforts (e.g., no active recruiting of vendor employees) rather than a blanket prohibition.

4. Automatic Renewals That Feel Like a Trap

Enterprise buyers hate surprises—especially when they come in the form of unexpected auto-renewals with price hikes. Many SaaS contracts automatically renew unless the customer provides advance written notice, often months before the renewal date.

Worse, some contracts include one-sided price increase clauses, allowing the vendor to change pricing without customer consent. These types of clauses often trigger intense scrutiny from legal teams and procurement departments.

How to Avoid Delays

Transparency is key. If your contract includes automatic renewal, make sure:

• The renewal terms are clear.
• Customers have ample time to cancel (e.g., 30-60 days before renewal).
• Pricing increases require mutual agreement or advance notice.

Contracts that are upfront about renewals and pricing stand a better chance of getting signed without pushback.

5. IP Assignment Landmines

Many SaaS vendors include intellectual property (IP) assignment clauses that inadvertently transfer customer-created work back to the vendor. For example, if a customer configures the software or integrates it into another system, some contracts automatically grant the vendor ownership rights over those modifications.

For enterprises, this is a major red flag. It creates uncertainty about who owns the work product and customizations—especially in cases where a business has built proprietary workflows on top of the SaaS product.

How to Avoid Delays

Keep ownership clear. If your contract includes IP language, ensure that:

• Customers retain rights to their own work product.
• The vendor only owns the software itself and any pre-existing IP.
• Custom developments remain the property of the party that created them.

The Fast Track to Frictionless Deals

Hidden risks like these don’t just slow down contracts—they stall revenue. Every unnecessary redline or legal objection adds days, weeks, or even months to the sales cycle.

At TermScout, we believe in a different approach: transparent, fair, and market-ready contracts that move deals forward—fast. Our Contract Certification process helps SaaS vendors eliminate friction by proving that their terms are balanced and free of common deal-breakers. The result? Faster deal cycles, fewer legal battles, and a smoother path to closed revenue.

If you’re ready to stop losing deals to contract redlines, explore how TermScout Certify can help your SaaS agreements become an asset—not an obstacle.