Why You Need a Disclaimer In Your SaaS Agreement?

Why You Need a Disclaimer In Your SaaS Agreement?

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I have always thought that disclaimers were good things to add to SaaS agreements, but this very recent case demonstrates that they really can make a difference in a legal dispute.

By the way, a disclaimer is a statement regarding things you are not liable for.

Example, if you provide a medical software service, it is a good idea to state that you are not providing medical advice, and that the doctors are solely responsible for providing medical advice. You get the picture.

So in this case, a building material company was certifying contractors as Master Craftsman regarding their products. The good news is if a customer wanted to search for a Master Craftsman on the building company’s site they had to agree to the building company’s Terms of Service which stated that:

Although we take certain steps to examine the credentials of our listed service professionals, CertainTeed makes no guarantees or representations regarding the skills or representations of such service professional or the quality of  the job that he or she may perform for you if you elect  to retain their services. CertainTeed does not endorse or recommend the services of any particular service professional.”

So despite that warning, a customer sued (yep, can you believe it) the building company for fraud (and some other things). The good news is the court got it right, and threw the case out  (aka dismissed the case early) as there was no misrepresentation (= no fraud).

So the takeaways for every SaaS company is to think about things or decisions that you think your customer should own and be responsible for (i.e. should not expect from your service). Then add those to a disclaimer on your website or in your SaaS agreement to make it clear that it is their responsibility.

Long story short, this is a great example of why disclaimers matter and why you should seriously consider adding them to your SaaS agreement. PS you can read my disclaimer below!

Resources:

Solum vs Certainteed Corporation

Wikipedia on Disclaimers

Disclaimer: This post is for informational and educational purposes only, and is not legal advice. You should hire an attorney if you need legal advice, which should be provided only after review of all relevant facts and applicable law.

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