Software Licence and SaaS Agreement Lawyers Adelaide: Terms That Hold Up
Software licences and SaaS agreements in South Australia
A SaaS agreement or software licence is the document a software business earns its revenue under, and the one its customers turn to when the product fails. Talon Legal drafts and reviews licences, subscription terms and click-through terms for Adelaide software providers and for the businesses that buy from them. Book a same-day free 30-minute consultation or call (08) 7094 2021.
Software and SaaS agreement key facts
| Issue | Position in South Australia |
|---|---|
| What the customer gets | Usually a licence: permission to use the software, not ownership. Doing an act comprised in the copyright without the owner's licence infringes it (Copyright Act 1968 (Cth) section 36(1)). An exclusive licence must be in writing signed by or for the owner (section 10(1)). |
| Software as goods | Goods include computer software (Australian Consumer Law section 2). Downloaded software was held to be goods in ACCC v Valve Corporation (No 3) [2016] FCA 196 at [137]. |
| Guarantees for services | Hosting, support and other services supplied to a consumer carry guarantees of due care and skill (section 60), fitness for a purpose made known (section 61) and supply within a reasonable time where none is fixed (section 62). |
| Who is a consumer | A customer paying $100,000 or less, or acquiring goods or services of a kind ordinarily acquired for personal, domestic or household use (section 3 and regulation 77A). |
| Excluding the guarantees | Void (section 64). For business-type supplies, liability can be limited to repair, replacement or resupply unless that is not fair or reasonable (section 64A). |
| Unfair terms | Void in standard form consumer and small business contracts (section 23(1)). Making a contract containing an unfair term the business proposed, or applying or relying on one, is a contravention, and each term is a separate one (section 23(2A) to (2C)). |
| Most exposed SaaS terms | One-sided rights to vary the terms, the features or the price, to renew or not renew, to terminate, or to limit the customer's right to sue (section 25). |
| Maximum penalty | Body corporate: the greatest of $100,000,000, three times the benefit, or 30% of adjusted turnover. Anyone else: $2,500,000 (section 224). |
| Online acceptance | A contract is not invalid because it was made by electronic communications (Electronic Communications Act 2000 (SA) section 7(1)). |
| Customer data | Reasonable security steps (APP 11.1). Disclosing personal information overseas requires reasonable steps so the recipient does not breach the APPs (APP 8.1), and the discloser can be liable for the recipient's acts (Privacy Act section 16C). |
| Subscriptions from 1 July 2027 | Consumer and small business subscriptions must have an exit method that is easy to find and straightforward, and an online one where the customer signed up online (new ACL section 48F). |
| Time limits | Six years for contract claims (Limitation of Actions Act 1936 (SA) section 35) and ACL damages claims (section 236(2)). |
| First step | Same-day free 30-minute consultation. Call (08) 7094 2021. |
Need a SaaS agreement lawyer in Adelaide?
Our SaaS agreement lawyers in Adelaide work on licences, subscription terms, end user licence agreements and the terms behind a sign-up button. The law that overrides those terms is in the Australian Consumer Law (ACL), Schedule 2 of the Competition and Consumer Act 2010 (Cth), the Copyright Act 1968 (Cth) and the Privacy Act 1988 (Cth). This page states the law current to 24 October 2026.
This guide is part of our information technology law practice. Related guides cover software development agreements, IT services and support agreements, data protection and privacy and technology IP and IT disputes.
If you sell subscriptions to consumers, run an app or operate a marketplace, see our guides to subscription and membership terms, app terms and conditions and online marketplace and platform terms.
For AI features and AI vendor terms, see our guides to AI contracts and data licensing and AI and privacy. For customers’ security schedules and breach notice terms, see data security clauses.
Free Consultation. Send us your terms, or the terms you have been asked to accept. Book a same-day free 30-minute consultation or call (08) 7094 2021.
On this page
- Licence or subscription: what is the customer buying?
- Are click-through terms binding?
- Which consumer guarantees apply to software and SaaS?
- Which SaaS terms are most at risk of being unfair?
- How far can liability be limited?
- What should a SaaS agreement say about data?
- What changes for subscriptions from 1 July 2027?
- Should a licence include source code escrow?
- How similar matters tend to play out
- How we act on software and SaaS agreements
- Case law
- Frequently asked questions
Licence or subscription: what is the customer buying?
Usually a licence. The software stays the property of its copyright owner, and the customer gets permission to use it. A person who does, or authorises, an act comprised in the copyright without the owner’s licence infringes it (Copyright Act section 36(1)). The scope of the licence therefore decides what the customer may lawfully do: how many users, which sites, whether it can modify or sublicense, and for how long. It is the first thing a SaaS agreement lawyer reads.
An exclusive licence must be in writing signed by or on behalf of the owner (section 10(1)). A non-exclusive licence can be given in click-through terms, and most are. In ACCC v Valve Corporation (No 3) [2016] FCA 196, the licence and subscriber agreements accepted on download conferred a contractual licence, which Edelman J described as a permission to do what would otherwise infringe the owner’s rights ([144]).
SaaS changes the delivery but not the principle. The customer accesses software hosted by the provider and does not receive a copy. The SaaS agreement then reads as much like a services contract as a licence, and it should deal with both: the right to use, and the service levels, support and data handling that come with it.
Are click-through terms binding?
A contract is not invalid because it was made online. Under section 7(1) of the Electronic Communications Act 2000 (SA), a transaction is not invalid because it took place wholly or partly by electronic communications. A transaction includes a contract, and the offer and acceptance that form it (section 5).
Whether particular terms bind is a separate question, and in a dispute it is a practical one: what the customer saw, what it clicked, and whether the terms were available before it agreed. A provider that wants to change its terms later needs a variation clause. A right for one party alone to vary the terms is one of the statutory examples of a term that may be unfair (ACL section 25(d)).
Transparency counts. In deciding whether a term is unfair, the court must take into account how transparent it is (section 24(2)). A term is transparent if it is expressed in reasonably plain language, legible, presented clearly and readily available to the party affected (section 24(3)). In ACCC v JJ Richards & Sons Pty Ltd [2017] FCA 1224, the terms were in legal language, in small print, and could have been presented more clearly, which counted against them ([60]).
Which consumer guarantees apply to software and SaaS?
For software supplied to a consumer, the guarantee of acceptable quality applies (ACL section 54), because goods include computer software (section 2). In Valve (No 3), Edelman J held that a platform supplying downloaded games supplied goods ([137]). Not everything it supplied was goods, but at the core of the supply was computer software ([157]).
Hosted SaaS is less settled. The customer uses software it never receives, alongside hosting, support and updates that are plainly services. Those services carry the guarantees of due care and skill (section 60), fitness for any purpose the customer makes known (section 61) and, where no time is fixed, supply within a reasonable time (section 62). A provider should assume that both sets of guarantees may apply to a bundled product.
The guarantees protect a business customer that counts as a consumer. That is a customer paying $100,000 or less, or acquiring goods or services of a kind ordinarily acquired for personal, domestic or household use (section 3 and regulation 77A of the Competition and Consumer Regulations 2010). Most small business subscriptions are under that figure.
Foreign terms do not avoid them. In Valve Corporation v ACCC [2017] FCAFC 224, the Full Court rejected the argument that the guarantees do not apply where the contract’s proper law is the law of another country ([103]). It said section 64 exists so that parties cannot contract out of them ([107]).
Which SaaS terms are most at risk of being unfair?
The unfair terms regime applies to standard form consumer contracts and small business contracts (section 23(1)). A small business contract is one for goods or services where at least one party employs fewer than 100 persons or had turnover under $10,000,000 in its last income year (section 23(4)). Most SaaS terms are standard form: the same terms for every customer, accepted with a click. A contract alleged to be standard form is presumed to be one unless the other party proves otherwise (section 27(1)).
The statutory examples in section 25 read like a list of common SaaS clauses. They include a right for the provider alone to vary the terms (paragraph (d)), to renew or not renew (paragraph (e)), or to vary the price without giving the customer a right to terminate (paragraph (f)). A right to change the features of the service unilaterally (paragraph (g)), to terminate (paragraph (b)) or to limit the customer’s right to sue (paragraph (k)) is on the list too.
The cases show how those clauses are assessed. In JJ Richards, an automatic renewal clause bound customers to further terms of equal length unless they cancelled within a 30 day window, and the supplier had no duty to remind them. The Court accepted that this created a significant imbalance, because the supplier is more likely than a small business to know when a contract is about to renew ([56]). A price clause allowing increases for any reason, with no corresponding right to terminate or change the service, was unfair for similar reasons ([56]). In ACCC v Fujifilm Business Innovation Australia Pty Ltd [2022] FCA 928, unilateral variation, automatic renewal, liability limitation and termination payment terms in equipment, software and support contracts were declared unfair by consent.
The supplier carries the burden. A term is presumed not to be reasonably necessary to protect the supplier’s legitimate interests unless the supplier proves otherwise (section 24(4)). In JJ Richards the supplier did not try, and the Court was satisfied the terms were not reasonably necessary in any event ([57] to [58]).
The consequences are now serious. An unfair term is void, though the rest of the contract continues if it can operate without it (section 23(2)). Since 9 November 2023, using an unfair term is also a contravention, each term counts separately (section 23(2A) to (2C)), and the maximum penalty for a body corporate is the greatest of $100,000,000, three times the benefit, or 30% of adjusted turnover (section 224).
Some terms are outside the test. Terms that define the main subject matter of the contract or set the upfront price, and terms required or expressly permitted by law, are not affected (section 26(1)).
How far can liability be limited?
Further than many providers expect for business customers, and not at all for some consumer rights. A cap on liability, an exclusion of consequential loss or a disclaimer is construed by its natural and ordinary meaning, read in light of the contract as a whole (Darlington Futures Ltd v Delco Australia Pty Ltd [1986] HCA 82 at [16]). A clearly drafted limit can be effective. In Darlington, a clause limiting a broker’s liability to $100 for each contract applied even to contracts the client had not authorised ([19]).
Statute then cuts across the contract. A term that excludes, restricts or modifies the consumer guarantees is void (ACL section 64). For goods or services not of a kind ordinarily acquired for personal use, a supplier can limit its liability for most guarantees to repair, replacement or resupply, or the cost of it (section 64A(1) and (2)). That limit does not apply if the customer shows that relying on it is not fair or reasonable (section 64A(3)). For a small business customer on standard terms, a one-sided limitation can also be attacked as unfair (section 25(a) and (k)).
A limitation clause that survives scrutiny preserves the guarantees that cannot be excluded and uses section 64A where it is available, with the cap stated in plain terms.
What should a SaaS agreement say about data?
Whatever the Privacy Act requires of the customer. A customer covered by the Act must take reasonable steps to protect the personal information it holds, including technical and organisational measures (APP 11.1 and 11.3), and the provider’s security is part of those steps. Where personal information is disclosed to a recipient outside Australia, the customer must take reasonable steps so that the recipient does not breach the APPs (APP 8.1). In defined circumstances the recipient’s act is treated as the customer’s own breach (section 16C).
The first civil penalty case under the Act shows the risk of leaning on a provider. In Australian Information Commissioner v Australian Clinical Labs Limited (No 2) [2025] FCA 1224, one reason the company had not taken reasonable steps was its overreliance on third party service providers, without adequate procedures of its own to detect and respond to incidents ([52]).
A SaaS agreement should therefore deal with where data is stored, who can access it and the security standard. It should require the provider to tell the customer about an incident quickly enough for the customer to complete its own assessment within 30 days (Privacy Act section 26WH), and provide for the return or deletion of data at the end. Our data protection and privacy guide covers those obligations in detail.
What changes for subscriptions from 1 July 2027?
The Competition and Consumer Amendment (Unfair Trading Practices) Act 2026 commences on 1 July 2027. For a subscription contract that meets the consumer requirement or the small business requirement, the supplier must provide a way for the subscriber to end the contract (new ACL section 48F(1)). Each way must be easy to find and straightforward, and require only the steps reasonably necessary to end the contract and protect the subscriber’s interests. If the subscriber signed up online, or the supplier offers online sign-up for the same goods or services, one way must be online (section 48F(2)).
The small business requirement mirrors the unfair terms test: a standard form contract with a subscriber that employs fewer than 100 persons or had turnover under $10,000,000 (new section 48G(2)). The same Act prohibits unfair trading practices that manipulate a consumer or unreasonably distort the consumer’s decision environment, and cause or are likely to cause detriment (new section 28B), and adds rules on displaying transaction based charges. A SaaS business that requires customers to cancel by phone or by email should plan the change now.
Should a licence include source code escrow?
For software a business depends on and cannot replace quickly, often yes. An escrow arrangement deposits the source code with an independent agent, to be released to the customer on defined events such as the developer’s insolvency or a failure to support the product.
Its value depends on three practical things. The release events must be ones that will actually happen in a failure. The deposit must be kept current, and verified. And the customer must be licensed to use and modify the code once it is released, because a customer with the code but no licence still infringes by using it (Copyright Act section 36(1)).
How similar matters tend to play out
Three illustrations of how the law on this page combines on ordinary facts. They are not predictions. Outcome depends on the terms, the evidence and the court.
Lower range. A SaaS provider’s click-through terms let it change features and fees on 7 days’ notice by email, and most customers are small businesses. Rewriting the clause to give customers a right to terminate on a change, and to limit variations to stated reasons, moves it away from the statutory examples in section 25(d), (f) and (g). Done before a complaint, it is a drafting exercise rather than a defence.
Middle range. A business licenses software for $60,000 and the product does not do what the vendor said it would. At that price the business is a consumer (section 3). The vendor’s exclusion of all warranties is void so far as it excludes the guarantees (section 64). A promise of a feature that was never on the roadmap is a representation about a future matter, which the vendor must have had reasonable grounds to make (section 4).
Upper range. A provider hosting customers’ personal information on overseas servers suffers a breach. Each customer must assess within 30 days and notify if the breach is eligible. Customers whose contracts did not require prompt notice from the provider may be out of time, and claims against the provider follow. The Australian Clinical Labs case shows that relying on a provider’s limited assessment is not enough ([77] to [78]).
How we act on software and SaaS agreements
As SaaS agreement lawyers we act for providers and for customers. For a provider, the aim is terms that protect the revenue and survive the unfair terms test. For a customer, it is a licence that matches how the software will actually be used, with remedies that work when it fails.
| Stage | What happens | What we do |
|---|---|---|
| Review | The terms are sent for advice, before launch or before signing. | Mark the terms that are void, unfair or missing, measured against sections 23 to 27, 64 and 64A. |
| Drafting | The licence, subscription terms or SaaS agreement is prepared. | Draft the licence scope, service levels, variation, renewal, price, liability and data clauses. |
| Negotiation | An enterprise customer or vendor proposes changes. | Negotiate the clauses that carry real risk and record what was negotiated. |
| Rollout | The terms go live in the sign-up flow. | Check how the terms are presented and accepted, and how changes will be notified. |
| Dispute | A customer refuses to pay, or the product fails. | Advise on the guarantees, the limitation clause, the dispute clause and the limitation period. |
We cannot promise an outcome, and no lawyer can. We can make sure the terms do what the business thinks they do before a customer tests them.
Every hour matters. Book a same-day free 30-minute consultation, or call (08) 7094 2021 now.
Software and SaaS case law
Valve and Fujifilm concerned software. AIBI concerned an IT services contract. The other decisions concern standard form and limitation clauses, which are assessed the same way in software and SaaS terms.
| Case | Court | Principle | Pinpoint |
|---|---|---|---|
| Valve Corporation v ACCC [2017] FCAFC 224 | Full Federal Court | Foreign proper law does not displace the guarantees; no contracting out | [103], [107], [225] |
| ACCC v Valve Corporation (No 3) [2016] FCA 196 | Federal Court | Downloaded software is goods; click-through licence is a contractual licence | [137], [144], [157] |
| ACCC v JJ Richards & Sons Pty Ltd [2017] FCA 1224 | Federal Court | Automatic renewal and price variation terms unfair; transparency | [56] to [60] |
| ACCC v Fujifilm Business Innovation Australia Pty Ltd [2022] FCA 928 | Federal Court | Variation, renewal, limitation and termination terms unfair by consent | [1] to [3] |
| AIBI Holdings Pty Ltd v Virtual Technology Services Pty Ltd [2022] FCA 696 | Federal Court | A genuinely negotiated contract was not standard form | [93], [96], [97] |
| Darlington Futures Ltd v Delco Australia Pty Ltd [1986] HCA 82 | High Court | Construction of exclusion and limitation clauses | [16], [19] |
| Australian Information Commissioner v Australian Clinical Labs Limited (No 2) [2025] FCA 1224 | Federal Court | Overreliance on third party providers; reasonable steps | [52], [77], [78] |
Case notes
Valve Corporation v ACCC [2017] FCAFC 224
A foreign games platform argued that the consumer guarantees did not apply because its contracts were governed by foreign law. The Full Court rejected that argument ([103]), said section 64 exists so that parties cannot contract out of the guarantees ([107]), and dismissed the appeal with costs ([225]).
ACCC v Valve Corporation (No 3) [2016] FCA 196
Edelman J held that the platform supplied consumers with goods, because the definition of goods includes computer software ([137]). The licence and subscriber agreements conferred a contractual licence ([144]). Not everything supplied was goods, but computer software was at the core of the supply ([157]).
ACCC v JJ Richards & Sons Pty Ltd [2017] FCA 1224
On agreed facts, eight terms of a supplier’s small business standard form contracts were declared unfair and void. The automatic renewal clause and the price variation clause each created a significant imbalance ([56]). The supplier did not rebut the presumption that the terms were not reasonably necessary ([58]), and the terms were not transparent ([60]).
ACCC v Fujifilm Business Innovation Australia Pty Ltd [2022] FCA 928
The respondents supplied office equipment with associated software and support services ([1]). After a successful mediation, the Court made consent declarations that ten categories of terms in their small business contracts were unfair and void ([3] and orders).
AIBI Holdings Pty Ltd v Virtual Technology Services Pty Ltd [2022] FCA 696
Perram J held that an IT services contract was not standard form, because the customer had an effective and successful opportunity to negotiate it ([93], [96]), so the unfair terms challenge did not arise ([97]). The decision predates the 2023 amendments, which added the repeat use factor and section 27(3).
Darlington Futures Ltd v Delco Australia Pty Ltd [1986] HCA 82
An appeal from South Australia. The High Court held that exclusion and limitation clauses are construed by their natural and ordinary meaning in light of the whole contract, and against the party relying on them where appropriate in case of ambiguity ([16]). The $100 limit applied to each unauthorised contract ([19]).
Australian Information Commissioner v Australian Clinical Labs Limited (No 2) [2025] FCA 1224
The Court found the company had not taken reasonable steps to protect personal information, in part because of its overreliance on third party service providers ([52]). Its reliance on a provider’s limited assessment of a cyberattack was unreasonable ([77] to [78]).
Frequently asked questions
Is a software licence the same as buying the software?
No. A licence is permission to use software that remains the copyright owner’s property. Using it beyond the licence can infringe copyright (Copyright Act section 36(1)), so the licence scope matters as much as the price.
Does a software licence have to be in writing?
An exclusive licence does: it must be in writing signed by or on behalf of the owner (Copyright Act section 10(1)). A non-exclusive licence can be granted in click-through terms, as in ACCC v Valve Corporation (No 3) at [144].
Are click-through terms legally binding in South Australia?
They can be. A contract is not invalid because it was made by electronic communications (Electronic Communications Act 2000 (SA) section 7(1)). Whether particular terms bind depends on how they were presented and accepted, and standard form terms must still pass the unfair terms test.
Can SaaS terms exclude all warranties?
Not the consumer guarantees. A term that excludes, restricts or modifies them is void (ACL section 64). For goods or services not ordinarily acquired for personal use, liability can be limited to repair, replacement or resupply unless that is not fair or reasonable (section 64A).
Does the ACL protect business customers of a SaaS provider?
Often. A business paying $100,000 or less is a consumer for the guarantees (section 3 and regulation 77A). The unfair terms regime protects businesses with fewer than 100 employees or turnover under $10,000,000 on standard form contracts (section 23(4)).
Can a subscription renew automatically?
It can, but an automatic renewal clause in standard form terms is a statutory example of a term that may be unfair (ACL section 25(e)). In JJ Richards, a renewal clause with a 30 day cancellation window and no reminder was declared unfair ([56]). From 1 July 2027, consumer and small business subscriptions also need an easy exit method (new section 48F).
Can a provider change its prices during a subscription?
Only with care. A term letting one party vary the upfront price without the other having a right to terminate is a statutory example of a term that may be unfair (section 25(f)). A price clause allowing increases for any reason was declared unfair in JJ Richards ([56]).
What happens if a SaaS term is unfair?
It is void, and the rest of the contract continues if it can operate without it (section 23(2)). Making a standard form contract containing an unfair term the business proposed, or applying or relying on one, is also a contravention with a maximum penalty for a body corporate of the greatest of $100,000,000, three times the benefit, or 30% of adjusted turnover (sections 23(2A) to (2C) and 224).
Who is responsible if an overseas hosting provider leaks data?
Potentially the business that disclosed the data to it. Before disclosing personal information to an overseas recipient, an entity must take reasonable steps so that the recipient does not breach the APPs (APP 8.1), and in defined circumstances the recipient’s act is treated as the entity’s breach (Privacy Act section 16C).
Is source code escrow worth it?
For critical software that cannot be replaced quickly, often. Its value depends on the release events, on keeping the deposit current, and on the customer being licensed to use the code once released.
What changes for subscription businesses in 2027?
From 1 July 2027, suppliers of consumer and small business subscriptions must provide a way to end the contract that is easy to find and straightforward, and an online way where the customer signed up online (new ACL section 48F). Unfair trading practices will also be prohibited (new section 28B).
Do I need a SaaS agreement lawyer?
For terms the business depends on, yes. Renewal, price, variation, liability and data clauses are the ones most often void or unfair, and since 9 November 2023 using an unfair term carries penalties. A SaaS agreement lawyer can fix those clauses before a customer tests them. A free 30-minute consultation will tell you where you stand.