Learn how to protect yourself if the service fails to meet contractual obligations.
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Margherita Manca
Using software in SaaS (Software as a Service) mode means relying on a continuously evolving service: the program is always online, always updated, always “present.”
But what happens when the provider stops updating that software? When the service freezes in time while the world keeps moving?
This is not just a technical inconvenience. It’s a concrete legal issue involving the fulfillment of contractual obligations. In this article, we analyze it with balance and rigor, offering a practical guide to understanding what the law provides, what the client can do, and how to prevent these situations.
In a SaaS contract, the client doesn’t purchase the software but obtains its use for a specified time and under defined conditions. Access is remote, ownership remains with the provider, but availability and functionality of the software are essential promises.
Choosing SaaS means entering a continuous relationship based on the assumption that the service will remain efficient, secure, and up to date.
The provider, in turn, undertakes not only to ensure the software’s daily functionality but also to update it regularly, fix malfunctions, and safeguard customer data properly. These aspects are usually governed by so-called SLAs (Service Level Agreements), which set response times, service availability levels, and support procedures.
As long as everything works, these aspects may seem marginal. But when something breaks—especially when updates stop—these details become crucial.
When you sign a SaaS contract, you’re not just paying to use software. You’re buying a service that must function over time, remain updated, secure, compatible with systems, and compliant with regulations.
According to Italian civil law, anyone who undertakes to do something and fails to do so correctly is liable for breach of contract and may be required to compensate damages. This principle applies to SaaS contracts: if a provider stops updating the software without justification, it’s a contract violation.
In these contracts, software isn’t a “finished” product—it’s a continuous service. Functionality at activation isn’t enough—it must continue over time. Without updates, software becomes ineffective, then risky, and eventually unusable. At that point, you’re no longer receiving what you paid for.
In short, if a provider stops updating SaaS software without justification or a valid alternative, they are no longer fulfilling their contractual duties. This gives the customer several legal tools: they can demand updates or terminate the contract and seek compensation if they’ve suffered damage.
A recent ruling by the Court of Venice (no. 1484/2023) clearly illustrates the legal consequences when a SaaS provider fails to maintain and update the service.
The contract involved a platform delivered via portal and mobile app that allowed end customers to access digital information linked to physical products. However, just a few months after signing, the service developed major technical issues, such as failure to correctly link images to the products. Despite numerous complaints, the issue remained unresolved.
The core problem wasn’t just a defective product. The provider could no longer update or fix the software because it lacked access to the source code, credentials, and development tools. These elements are crucial in SaaS contracts, where operational continuity is not optional but essential.
The provider was thus materially unable to fulfill its contractual obligations. The client terminated the contract, and the court upheld their claims, awarding damages for both direct economic losses and reputational harm due to the loss of a strategic partnership.
This decision reinforces a key principle: in SaaS contracts, the provider’s responsibility goes beyond initial delivery. If they can’t update, maintain, or fix the software—even due to internal mismanagement—it may constitute a serious contractual breach, with the associated legal consequences.
Many SaaS-related issues—especially when updates stop or the service falters—can be avoided with a well-drafted contract that works both on paper and in practice.
First, the obligation to update the software must be explicitly stated. The contract should define how often updates will be released, what types (functional, security, regulatory), and how they will be communicated and handled.
Another key point involves SLAs. These are often seen as optional, but they’re essential because they measure service quality. It’s necessary to specify software availability, issue resolution times, support methods, and support hours.
What if something goes wrong? The contract should include an express termination clause. This allows either party to end the agreement if serious disruptions occur (e.g., lack of maintenance over time), helping avoid legal disputes and enabling the client to exit a failing service quickly.
Finally, a crucial but often overlooked element is end-of-contract data handling. The contract should clearly outline how the client’s data will be returned, in what format, within what timeframe, and with what guarantees. Without this, the client risks being locked out or losing valuable data.
If a provider stops updating software, the client shouldn’t just wait and see. Delaying may worsen the issue and make it harder to contest effectively. The first step is always formal communication.
The client should send a formal notice of default, that is, a clear and detailed document explaining that the service received is no longer in compliance with the provisions of the contract. In the notice, the client may request that the provider take action within a reasonable period of time to restore the proper functioning of the service, specifying the nature of the problem and the concrete consequences being suffered. This communication should be sent via certified email or registered letter in order to have certain proof of both the sending and the content. It is a strategic act, which also serves to demonstrate the client’s good faith and to formally place the provider in default.
If there’s no effective response, or the provider denies responsibility or ignores the issue, the client may consider terminating the contract. As mentioned, this may already be allowed through an express clause.
Clients may also take legal action to have the breach acknowledged and the contract officially dissolved.
Naturally, judicial proceedings may also involve damage compensation. If the failure caused economic harm—such as data loss, business interruptions, reputational damage, or lost commercial relationships—the client can seek compensation. However, actual harm must be proven, possibly through documents, data, witness testimony, or technical assessments.
A fundamental right is data portability. When the contract ends, the client is entitled to receive their data in a readable, complete, and reusable format. This is a minimum guarantee the provider must honor.
Clients are never powerless. If the service fails, the software isn’t updated, or the relationship breaks down, there are legal paths forward. With the right attention, legal advice, and documentation, clients can protect their rights and restore order.
Margherita Manca
