What are the best practices for managing Terms of Service (ToS) for a SaaS company?

You should also keep up to date with E-sign and other laws or potential legislation related to online contract formation and retention of records.  TOS don't mean much if you can't legally prove they have accepted the terms (and which TOS they agreed to, which is why version control/retention is critical so you can tie which TOS applies to that consumer and show they accepted those terms).

The nature of SaaS and its recent evolution has changed what may be recommended for TOS, resulting in longer versions.  New issues pop up that may not have been thought about before, new lawsuits, new cases, new security breaches, data privacy leaks, new ways or platforms to use the service, new accounting rules on how to recognize revenue, etc. 

The use of the word "software" is somewhat misleading because they are treated as a subscription to a service, instead of a license to use software, which is how you use things like Word or MS Office.   They may need to include a limited license with the subscription to download and use any software code to access the service from things like tablet, mobile, or desktop apps. 

There have been some changes over the last few years, but maybe down the road there will be a push to make more uniform rules or case law will establish how the issues in TOS will be handled more definitely.  For now, lawyers spend their time thinking about all possible ways to cover your butt, resulting in long forms.  Eventually shrink-wrap licenses held up in many courts (although not always) as valid agreements even though many of them only state that by opening the box/shrink-wrap, you agree to the terms, which are often not all listed on the outside of the box, but incorporated into it.  With a few courts saying that is not enough to have a valid contract unless the person reads the whole thing before agreeing, it is best to retain an attorney to over your specific facts or use the full/comprehensive version.

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