# Overview

## Negotiation and counterparty dynamics

To help answer common questions regarding contract negotiation in SaaS agreements, we’ve put together a refresh of our Contract Benchmark Report. This report contains insights about common terms in SaaS commercial agreements, designed to aid decision-making and speed up contract signing.

We based the report on data from over 1,000 contracts using the Common Paper platform, coupled with insights from the [Common Paper Committee](/content/committee/index.html), which consists of attorneys from various practice backgrounds. You can also find our previous [2022 report here](/content/resources/contract-benchmark-2022/index.html).

## Contract data, stats, and expert opinions

### Customer roles and titles

The signatory levels on the customer side of Cloud Service Agreements are:

| **Customer Role**                     | **% of Signed CSAs** |
|---------------------------------------|----------------------|
| Executive (including CXO, VP, Founder)| 74%                  |
| Director (including Director, Principal)| 18%                 |
| Manager (including Manager, Lead)    | 8%                   |

### AI clauses in agreements

Clauses regarding the use of customer data for AI and ML have been increasing in prevalence. In Q1 2023, under 5% of CSAs mentioned AI, while by Q4 2023 this percentage rose to 25%.

### Time to sign by customer size

The median contract signing time varies by company size:

| **Customer Company Size** | **Median Time to Sign** |
|---------------------------|-------------------------|
| SMB                       | 3 days, 1 hour         |
| Mid-market                | 3 days, 20 hours       |
| Enterprise                | 4 days, 9 hours        |

### Commonly negotiated terms

Commonly negotiated terms in Cloud Service Agreements include the following:
- Fee amount and structure 
- Auto-renewal/nonrenewal notice 
- Invoice period

In NDAs, commonly negotiated terms include:
- Term of confidentiality 
- NDA term 
- Chosen courts

### Insurance requirements by company size

Vendors are often required to carry insurance to mitigate risk, particularly for larger customers:

| **Customer Size** | **% of CSAs w/ Insurance Minimums** |
|-------------------|------------------------------------|
| SMB               | 6.5%                              |
| Mid-market        | 11.5%                             |
| Enterprise        | 28.6%                             |

## Cloud Service Agreement

A Cloud Service Agreement governs the sale and use of cloud services or SaaS, including business and legal terms:

### Subscription details

- 70% of CSAs are annual, 19% monthly.
- 90% include automatic renewal, with 29% including an automatic fee increase upon renewal.

### Payments

- Most common payment period: “30 days from customer’s receipt of invoice” (62% of CSAs).
- Invoicing: 48% are monthly, 46% annual, 5% quarterly.

### Dispute resolution

Disputes are managed through courts or [binding arbitration](/content/standards/cloud-service-agreement/add-mandatory-arbitration/index.html). Commonly used governing law and chosen courts by CSAs:
- 71% use Delaware.

### Risk mitigation

Covered claims define obligations regarding legal liabilities:
- 76% of CSAs included default positions on covered claims.

### Add-ons

- 39% of CSAs include a Service Level Agreement (SLA).
- 37% include a security policy.
- 45% include some form of publicity rights.

## Mutual NDA

### Location

Common governing laws:
- Delaware: 63%
- California: 16%
- New York: 10%

### Time

Most common NDA term lengths:
- 1 year: 74%
- No fixed expiration: 36%

### Confidentiality

Most common term of confidentiality: 2 years, comprising 56% of NDAs.

## Design Partner Agreement

### Partner and provider obligations

**Partner obligations:**
- 72% include regular feedback participation; most commonly every twice monthly (46%) or once monthly (36%).
- **Provider obligations:** Discounts on future subscriptions appear in 43% of agreements.

| **Discount Percentage** | **% of Design Partner Agreements with Discount** |
|-------------------------|-----------------------------------------------|
| 50 percent              | 40%                                           |
| 20 percent              | 21%                                           |
| 30 percent              | 14%                                           |

### Fees and term length

Common durations of design partner agreements:
- 3 months: 27%
- 6 months: 22%
- 1 year: 19%