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SaaS Order Forms & Subscription Agreement

How would you handle the following scenario?

We updated our order form and subscription agreement several months ago. A customer deal that was in the works for a while using a drafted older version of the subscription agreement was finally closed and sales obtained the order form signed.

Sales did not get the subscription agreement signed (another issue/annoyance but that's not what my question is directed at as I have arms comfortably around revenue recognition) and so when I asked for the current updated subscription agreement to be signed, they sent it to the customer, who said that their legal team had already reviewed the older subscription agreement and did not want to sign the newer version. The newer version uses more standard legal terms then our old version which was poorly written and the new version represents a much more enforceable contract. The new version doesn't change the substance of the subscription agreement and in fact provides for better customer rights in terms of legal required notification on renewals, etc. Yet the customer doesn't want to put the contract through their legal internal review again and keeps pushing back on sales.

Would you hold firm and insist sales obtains a signed current agreement or just accept the signed older agreement?

Answers

Len Green
Title: Performance Improvement Consultant and E..
Company: Haygarth Consulting LLC
LinkedIn Profile
(Performance Improvement Consultant and ERP Strategist, Haygarth Consulting LLC) |

Anon

If both parties executed a document then that is the contract, isn't it?
If the shoe were on the other foot, would you really sign a new, tougher contract, without extracting some new concession? I would not.

From both a customer service and legal perspective, I doubt you can "hold firm and insist."

What you should perhaps look at is how to mitigate the risks inherent in the earlier contract that they signed, and make sure your sales/ops team know exactly what that means in terms of fulfillment of the contract.

What does your legal team say?

EMERSON GALFO
Title: CFO
Company: C-Suite Services
LinkedIn Profile
(CFO, C-Suite Services) |

1. The situation was NOT the fault of the customer.
2. You were willing to deal with this customer with the wordings of the OLD contract.
3. You have to weigh the possibility of having to enforce a contract (ie, quality of this customer/client) against standing firm on getting the new worded contract signed or "no service". From experience, if the customer wants to reneg on the contract, your "strongly worded" contract won't matter.
4. Lastly, importance of this customer to your sales numbers.

I would still continue servicing this customer at least for the remaining term of the contract until the next contract is up for negotiation or renewal. Then I would have the NEW contract go through their process.

Anonymous
(Director of Finance/Controller) |

thanks to both of you for the feedback!

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