Recovering unpaid SaaS subscription fees through demand letters: seat-based vs usage-based billing, audit rights, suspension procedures, and data export obligations

📤 SaaS License Nonpayment Demand Letters

SaaS vendors face unique collection challenges when subscribers fail to pay: the customer is actively using your platform, often with critical business data inside your system, yet payment obligations are disputed or ignored. A well-structured demand letter establishes breach, preserves suspension/termination rights, and creates settlement leverage while managing customer data obligations.

⚖️ Legal Foundation for SaaS Collection

Breach of License Agreement: SaaS subscriptions are typically governed by Terms of Service (ToS) and Master Subscription Agreements that establish payment obligations, billing models (seat-based, usage-based, or hybrid), and vendor remedies for nonpayment.

Implied Contract (Click-Through): Even if the customer never signed a written contract, acceptance of your Terms during account creation, combined with actual platform use, typically establishes an enforceable subscription contract.

Account Stated: Regular monthly or annual invoicing without objection, especially with a history of prior payments, can establish an "account stated" claim with favorable statute of limitations.

When to Send a SaaS Nonpayment Demand Letter
✅
Platform Access is Active The customer is still actively using your SaaS platform, accessing features, storing data, or consuming resources despite nonpayment.
✅
Payment Grace Period Expired Your ToS grace period (typically 5-15 days past invoice due date) has elapsed, and automated payment retry attempts have failed.
✅
No Legitimate Billing Dispute The customer has not raised quality complaints, service-level agreement (SLA) violations, or billing calculation disputes that would justify withholding payment.
✅
Pre-Suspension Documentation You want to establish a clear paper trail before suspending or terminating service, protecting against wrongful termination claims.
✅
Data Export Obligations Your ToS requires you to provide customer data export before permanent deletion, and the demand letter process allows you to fulfill this while collecting payment.
Structuring Your SaaS Nonpayment Demand Letter
📝 Essential Components
  1. Account and License Summary: Identify the customer account, subscription tier, billing model (per-seat, usage-based, enterprise), contract start date, and current status.
  2. Contract Formation: Establish how the contract was formed—signed MSA, click-through ToS acceptance, or email confirmation of upgrade/purchase.
  3. Billing Model Details: Explain whether billing is seat-based (per-user licenses), usage-based (API calls, storage, compute), or hybrid, and how charges accrued.
  4. Invoice History: List all unpaid invoices with dates, amounts, billing periods, and due dates. Include any partial payments or credits applied.
  5. Payment Terms and Breach: Quote the ToS payment terms and state clearly that the customer has breached by failing to pay.
  6. Service Usage Despite Nonpayment: Document that the customer continues to use the platform (login records, API usage logs, storage consumption) despite unpaid invoices.
  7. Suspension and Termination Rights: Reference your ToS provisions allowing suspension or termination for nonpayment, and state the deadline before you exercise these rights.
  8. Data Export Window: If applicable, offer a limited window (e.g., 10 days) for customer to pay and avoid suspension, or to request data export before account closure.
  9. Audit Rights (If Applicable): For enterprise contracts with self-reported usage or seat counts, assert your right to audit actual usage and adjust billing retroactively.
  10. Interest and Late Fees: Calculate and demand interest, late fees, and any suspension/reactivation fees authorized by your ToS.
  11. Attorney's Fees: If your ToS includes fee-shifting, prominently note this to increase settlement pressure.
⚠️ Critical SaaS-Specific Mistakes to Avoid
  • Suspending without notice: Immediate suspension without contractual notice can expose you to damages claims if customer loses critical business data or functionality.
  • Failing to preserve customer data: Deleting customer data before ToS-required retention periods expire can trigger data breach, conversion, or destruction of property claims.
  • Overstating usage-based charges: If you can't document actual API calls, storage volumes, or compute hours with system logs, your demand will fail.
  • Ignoring SLA violations: If your platform had downtime or performance issues, the customer may have offsets or excuses for nonpayment—address this proactively.
  • Continuing to provide service indefinitely: Allowing ongoing free use undermines your breach claim and can create waiver or estoppel defenses.
Seat-Based vs Usage-Based Billing Challenges

Different billing models create different collection issues:

💺 Seat-Based (Per-User) Licensing

Common Issue: Customer disputes the number of active seats, claims users were deactivated, or argues that "viewer" or "guest" access shouldn't count as paid seats.

Your Evidence: Pull user login logs, active session data, license assignment records, and admin panel screenshots showing actual seat utilization during billing period.

Demand Letter Strategy: Include a detailed seat reconciliation table showing each user, activation date, and activity during the billing period. Offer to conduct a joint seat audit if customer disputes the count.

📊 Usage-Based (Consumption) Billing

Common Issue: Customer disputes API call volumes, data storage calculations, or bandwidth/compute usage metrics that drove the invoice amount.

Your Evidence: System logs showing timestamped API calls, storage snapshots, bandwidth metrics, and any customer-accessible usage dashboards that displayed real-time consumption.

Demand Letter Strategy: Attach usage log summaries (redacted for brevity but showing totals and sampling), reference customer's real-time dashboard access, and offer audit cooperation if they believe your metering is inaccurate.

💡 Data Hostage vs Lawful Leverage

SaaS vendors walk a fine line: you have leverage because the customer's data is in your system, but you cannot unlawfully "hold data hostage." Most ToS allow suspension for nonpayment and require a data export window (typically 30-60 days post-suspension) before permanent deletion.

Best Practice: In your demand letter, offer a clear path: (1) pay now and maintain access, or (2) request data export within [X] days, after which the account will be permanently closed and data deleted per ToS Section [X].

Audit Rights in Enterprise SaaS Contracts

Many enterprise SaaS agreements include audit provisions allowing the vendor to verify customer's actual usage against self-reported metrics or contracted seat counts. If you suspect under-reporting:

  • Invoke audit rights formally: Reference the ToS audit clause and provide [30-60 days] notice of audit intent, or state that you will conduct the audit if payment is not received.
  • Estimate under-reporting damages: If system logs show usage exceeding contracted tiers, calculate the shortfall and include it in your demand amount.
  • Negotiate settlement: Many customers prefer to settle audit discrepancies for a percentage of estimated underpayment rather than undergo a full audit.
📨 You Received a SaaS Nonpayment Demand Letter

Receiving a demand letter from your SaaS vendor—especially when your business data is in their platform—creates urgent pressure. Responding strategically protects your access, data, and legal position while resolving the payment dispute.

🔍 First 48 Hours: Triage and Secure Your Data
  1. Immediate data backup: If the vendor offers API or export functionality, initiate a full data backup immediately. Don't wait for suspension.
  2. Review the invoices: Pull your records—what did you actually pay? What do you owe? Are there duplicate charges, incorrect seat counts, or usage calculation errors?
  3. Check your contract: Review your ToS, MSA, or Order Form for payment terms, billing dispute procedures, suspension notice requirements, and data export rights.
  4. Assess platform dependency: How critical is this SaaS platform to your operations? Do you have backup systems or can you migrate quickly if suspended?
  5. Document quality issues: Have there been service outages, SLA violations, bugs, or feature failures that justify withholding payment or seeking offsets?
Response Strategy Options
💳
Pay Immediately (If You Clearly Owe It) If the charges are accurate and you have no defenses, pay promptly to avoid service suspension, data loss, and escalating late fees or legal costs.
🧮
Dispute Billing Calculations If seat counts, usage metrics, or billing calculations appear incorrect, request detailed usage logs and propose a joint audit to reconcile discrepancies.
⚖️
Assert SLA Violations as Offset If the vendor breached SLA uptime, performance, or support commitments, document this and propose reduced payment or credits against the disputed invoice.
📦
Request Data Export and Negotiate Exit If you're planning to migrate away from the platform, negotiate a settlement (partial payment) in exchange for extended data export access and orderly transition period.
🛡️
Assert Billing Dispute Process If your contract requires the vendor to follow a formal billing dispute process before suspension, assert this and demand compliance before any service interruption.
⚠️ What NOT to Do
  • Ignore the letter and hope for continued access: Most SaaS vendors will suspend without further warning once the demand letter deadline passes.
  • Fail to back up your data: Waiting until suspension to request data export may result in delays, fees, or data loss.
  • Make partial payment without clarifying terms: Partial payment can be construed as acknowledging the full debt under "account stated" theories.
  • Publicly bash the vendor: Negative reviews or social media complaints can expose you to defamation claims and eliminate settlement goodwill.
  • Assume you can withhold payment for minor issues: Unless SLA violations are material and documented, withholding payment for small bugs or support delays is usually not a valid defense.
Data Export and Migration Rights

Before suspension or termination, you have contractual and practical rights to your data:

  • Review data export provisions: Most SaaS ToS require vendors to provide data export in standard formats (CSV, JSON, database dumps) for [30-60] days post-termination.
  • Request immediate export access: Even if disputing payment, proactively request data export to avoid business disruption.
  • Negotiate extended access: Offer partial payment or settlement in exchange for extended read-only access while you migrate to a new platform.
  • Preserve export evidence: If the vendor refuses or delays data export in violation of ToS, document this—it can become a counterclaim or defense to collection.
💡 Settlement is Usually Cheaper Than Migration Chaos

Even if you have billing disputes or SLA grievances, consider the total cost of fighting: rushed migration to a new platform, data transfer headaches, business disruption, and employee retraining often exceed the disputed invoice amount. Settling for 70-90% and maintaining platform access may be the most cost-effective path.

📋 Evidence Checklist for SaaS Nonpayment Claims
For SaaS Vendors (Claimants)
📄
Contract and Terms of Service Master Subscription Agreement (MSA), Order Forms, ToS acceptance records (click-through logs with timestamps and IP addresses), and any amendments or upgrades.
🧾
Invoice History and Payment Records All invoices issued, payment receipts for any amounts paid, credit memos, and records of failed payment attempts (credit card declines, ACH rejections).
💺
Seat/User License Logs (Seat-Based Billing) Admin panel exports showing active users, seat assignment records, user login activity during billing period, and deactivation/reactivation history.
📊
Usage Metrics (Usage-Based Billing) API call logs with timestamps and endpoints, storage consumption snapshots, bandwidth/compute usage reports, and customer-facing dashboard screenshots.
💬
Communication Records Email threads about billing, support tickets related to invoices, any customer acknowledgments of usage or charges, and dunning/reminder emails sent.
🔔
Suspension Notices and Warnings Automated and manual payment reminders, grace period notices, pre-suspension warnings, and evidence that customer received and read these (email open tracking, portal login after notice).
⚙️
Service Level and Performance Records Uptime logs, incident reports, SLA compliance dashboards—to rebut any claims that service failures justify nonpayment.
For SaaS Customers (Defendants)
📋
Contract and Payment Terms Your signed MSA, ToS acceptance records, Order Forms, and any side letters or amendments that modify billing or payment terms.
💳
Payment Records Bank statements, credit card statements, ACH confirmations, and internal accounting records showing what you actually paid and when.
🔍
Billing Dispute Evidence Internal seat audits showing actual user counts, usage calculation spreadsheets, screenshots of your admin panel showing lower usage than billed, and any prior billing error corrections.
⚠️
SLA Violations and Service Issues Support tickets documenting outages, performance problems, or feature failures; vendor incident reports acknowledging downtime; and any SLA credit requests you submitted.
📧
Dispute Communications Emails or support tickets where you raised billing questions, requested usage breakdowns, or disputed charges—especially if vendor ignored or dismissed your concerns.
📦
Data Export Requests and Responses Any requests you made for data backup or export, vendor responses (or lack thereof), and evidence of data export limitations or delays.
💡 Preservation and Audit Trails

For SaaS disputes, digital evidence is everything. Vendors should preserve complete system logs, billing calculation worksheets, and user activity records. Customers should immediately export all available usage dashboards, billing history from the vendor portal, and support ticket records before suspension cuts off access.

💰 Settlement Ranges and Practical Outcomes

SaaS nonpayment disputes typically settle faster than traditional service contract disputes because both sides have strong incentives: vendors want payment, customers want uninterrupted access and data security.

📊 Typical Settlement Patterns
  • Clear usage, no disputes, established payment history: 90-100% recovery within 30-60 days, often with payment plan.
  • Seat count or usage calculation disputes: 70-90% recovery after joint audit or reconciliation process.
  • SLA violations or service quality issues: 50-80% recovery, with vendor offering credits or extended service in lieu of full cash payment.
  • Customer migration/exit scenarios: 60-85% recovery, often structured as partial payment in exchange for extended data export window and orderly offboarding.
Factors That Increase Vendor Recovery
🔒
Customer Data Dependency If critical business data or workflows are locked in the platform, customers settle quickly to avoid suspension and business disruption.
📊
Clear Usage Documentation Detailed, timestamped logs showing API calls, seat usage, or consumption metrics make disputes difficult to sustain.
⚖️
Attorney's Fees Clause ToS provisions allowing fee recovery create significant settlement pressure, especially for smaller disputed amounts.
🎯
Clean SLA Compliance Record If you can show strong uptime and SLA compliance, customer quality defenses evaporate.
Factors That Reduce Vendor Recovery
❌
SLA Violations or Service Outages Documented downtime or performance failures give customers legitimate offsets and negotiation leverage.
📉
Billing Calculation Opacity If you can't clearly explain how usage charges were calculated or can't produce detailed logs, customers will dispute vigorously.
⏰
Prior Billing Errors If you've had to issue credits or corrections in the past, customers will assume current charges are also wrong.
🚪
Customer Already Migrating If the customer has already moved to a competitor and extracted their data, your leverage disappears.
💡 Payment Plans and Extended Access

Offering structured payment plans in your demand letter dramatically increases settlement rates for SaaS disputes. Example language: "If paid in full within 10 days, I will waive late fees totaling $[X]. Alternatively, I will accept payment over 3 months with the first installment due within 5 days, provided you agree in writing by [date]."

For customers planning to migrate: "If you need to transition to another platform, I'm willing to provide 60 days of read-only data access in exchange for payment of $[reduced amount] representing [X]% of disputed invoices, plus execution of a mutual release."

Litigation and Arbitration Considerations

Most SaaS ToS include mandatory arbitration clauses, which changes the dispute landscape:

  • Arbitration costs: Initiation fees for commercial arbitration ($1,500-$5,000+) often exceed small unpaid invoice amounts, reducing vendor's willingness to sue.
  • Venue and jurisdiction: Many SaaS ToS specify vendor-favorable venues (e.g., California, Delaware), giving the vendor home-court advantage.
  • Class action waivers: Most SaaS ToS prohibit class actions, limiting customer's ability to aggregate small disputes.
  • Fee-shifting: If ToS allows prevailing party to recover fees, this creates massive settlement pressure for customers with weak defenses.
⏱️ Realistic Timelines
  • Demand letter to initial response: 5-15 days
  • Negotiation and settlement: 30-60 days
  • Suspension for nonpayment (if no resolution): 15-30 days from demand
  • Arbitration filing to award: 6-12 months
  • Small claims (if under jurisdictional limit): 60-120 days to judgment
✍️ SaaS Nonpayment Demand Letter Snippets

Use these professionally drafted snippets as starting points. Customize with your specific ToS terms, billing model, and jurisdiction.

Opening Paragraph – Account and Contract Summary
This letter constitutes formal demand for payment of $[AMOUNT] in unpaid subscription fees for your use of [PLATFORM NAME] under Account ID [XXXXX]. Your company accepted our Terms of Service on [DATE] via click-through acceptance (IP: [XXX.XXX.XXX.XXX], timestamp: [ISO-8601]), and subsequently subscribed to our [TIER NAME] plan on [DATE]. Your current subscription status is [Active/Suspended/Grace Period], with unpaid invoices dating back to [EARLIEST UNPAID DATE].
Seat-Based Billing Detail
Your subscription is billed on a per-seat basis at $[AMOUNT] per active user per month, as outlined in Section [X] of our Terms of Service. During the billing period [START DATE] to [END DATE], your account had the following seat activity: • [NUMBER] seats active as of [START DATE] • [NUMBER] seats added on [DATES] • [NUMBER] seats deactivated on [DATES] • Average active seats: [NUMBER] • Billable seats per ToS Section [X]: [NUMBER] Total seat charges for this period: $[AMOUNT] Attached as Exhibit A is a detailed user roster showing each seat, activation date, last login, and activity status. This data was exported from your account's Admin Panel, which you had full access to throughout the billing period.
Usage-Based Billing Detail
Your subscription is billed based on actual platform usage, calculated as follows per ToS Section [X]: • API calls: $[RATE] per [1,000/10,000] calls • Data storage: $[RATE] per GB per month • [Other usage metric]: $[RATE] per [unit] For the billing period [START DATE] to [END DATE], your account consumed: • API calls: [NUMBER] ([ENDPOINT BREAKDOWN if relevant]) • Data storage: [NUMBER] GB (average monthly) • [Other metric]: [NUMBER] [units] Total usage charges: $[AMOUNT] Attached as Exhibit B are usage log summaries showing daily/weekly totals and sample detailed logs. Your account's Usage Dashboard displayed real-time consumption metrics throughout this period, and you received automated usage threshold alerts on [DATES].
Invoice Summary and Breach Declaration
The following invoices remain unpaid: Invoice No. [####] – Issued [DATE] – Due [DATE] – Amount: $[AMOUNT] – Status: [DAYS] days overdue Invoice No. [####] – Issued [DATE] – Due [DATE] – Amount: $[AMOUNT] – Status: [DAYS] days overdue Invoice No. [####] – Issued [DATE] – Due [DATE] – Amount: $[AMOUNT] – Status: [DAYS] days overdue Total Principal Owed: $[AMOUNT] Late fees per ToS Section [X] ($[AMOUNT]/invoice after [X] days): $[AMOUNT] Interest at [X]% per month: $[AMOUNT] TOTAL AMOUNT DUE: $[AMOUNT] Section [X] of our Terms of Service requires payment within [NET 30] days of invoice date. All payment deadlines have passed, and automated payment retry attempts on [DATES] failed due to [declined card/insufficient funds/expired card]. Your failure to remit payment constitutes material breach.
Suspension and Data Export Warning
Section [X] of our Terms of Service grants us the right to suspend or terminate service for accounts [X] days or more overdue. Your account currently meets this threshold. If payment is not received by [DATE] ([NUMBER] business days from this letter), I will suspend your account access, including: • Platform login disabled for all users • API access terminated • Data accessible in read-only mode for [30/60] days per ToS Section [X] • Permanent data deletion after [X] days if account remains unpaid To preserve your data and business continuity, you may: Option 1: Pay the full amount due ($[AMOUNT]) by [DATE] to maintain uninterrupted access. Option 2: Request data export by [DATE] via [support@platform.com / API endpoint / self-service export]. Data export is available for [X] days post-suspension. Option 3: Propose a payment plan (see below) to maintain access while resolving the outstanding balance.
Audit Rights Assertion (Enterprise Contracts)
Section [X] of our Master Subscription Agreement grants us the right to audit your actual usage of the platform to verify compliance with contracted seat counts and usage tiers. Our system logs indicate that your actual usage during [TIME PERIOD] exceeded your contracted [TIER/SEAT COUNT] by approximately [X]%. Specifically: • Contracted seats: [NUMBER] • Actual peak concurrent users: [NUMBER] • Underpayment estimate: $[AMOUNT] I hereby invoke our audit rights under Section [X]. You have [30/60] days to either: 1. Pay the estimated underpayment of $[AMOUNT] plus current unpaid invoices, or 2. Cooperate with a formal usage audit, the cost of which will be borne by [you/us/shared] per the MSA. If you choose Option 2, I will provide audit procedures and scheduling within [X] days. If audit reveals underpayment exceeding [X]%, you will bear full audit costs per Section [X].
Payment Plan Offer (Golden Bridge)
While I am prepared to suspend service and pursue all legal remedies, I am willing to consider a structured payment arrangement if you respond promptly: Option 1: Pay $[AMOUNT] in full by [DATE] and I will waive $[AMOUNT] in late fees. Option 2: Pay $[AMOUNT] (representing principal + interest) over [3] months: • $[AMOUNT] due within 5 business days • $[AMOUNT] due on [DATE] • $[AMOUNT] due on [DATE] Acceptance of this payment plan requires: • Written confirmation by [DATE] • Execution of a payment plan agreement (I will provide template) • First payment received by [DATE] • Continued platform access contingent on timely payments This offer expires on [DATE]. Failure to accept will result in immediate service suspension and pursuit of full amount through arbitration per ToS Section [X].
Attorney's Fees Warning
Section [X] of our Terms of Service provides that the prevailing party in any dispute is entitled to recover reasonable attorney's fees, costs, and expenses. Should I be forced to initiate arbitration or litigation, I will seek recovery of: • All unpaid principal, interest, and late fees • Arbitration filing and administrative fees • Attorney's fees and costs • Any suspension reactivation fees per ToS Section [X] Based on typical fee structures for commercial collection matters, your total exposure could reach $[ESTIMATED RANGE], substantially more than the $[CURRENT AMOUNT] currently owed. I strongly encourage immediate payment to avoid this escalation.
Closing Demand and Deadline
I demand payment in full of $[AMOUNT] no later than [DATE] ([NUMBER] business days from the date of this letter). Payment should be made via: • Credit card through your account billing portal at [URL] • ACH/Wire transfer to [BANK DETAILS] • Check payable to [COMPANY NAME] and mailed to [ADDRESS] If you dispute any portion of this amount, you must: • Respond in writing within [5] business days • Provide detailed explanation and supporting documentation • Engage in good-faith billing reconciliation per ToS Section [X] Failure to pay or respond by [DATE] will result in: • Immediate account suspension • Initiation of arbitration proceedings per ToS Section [X] • Pursuit of all amounts owed plus attorney's fees and costs I prefer to resolve this matter professionally. Please contact me immediately at [EMAIL] or respond through your account portal. Sincerely, [YOUR NAME] [YOUR TITLE] [COMPANY NAME] [CONTACT INFORMATION]
Response Letter Snippets (For Customers)
Response – Disputing Usage Calculations
I am in receipt of your demand letter dated [DATE] claiming $[AMOUNT] in unpaid subscription fees. I dispute the amount claimed for the following reasons: 1. Seat Count Discrepancy: Your invoice claims [NUMBER] active seats during [PERIOD], but our internal audit shows only [NUMBER] active users. Attached as Exhibit A is our user roster exported from your Admin Panel on [DATE], showing [NUMBER] active seats and [NUMBER] deactivated seats that should not have been billed. 2. Usage Calculation Error: Your usage-based charges appear to include [SPECIFIC ERROR: e.g., "duplicate API calls," "storage from deleted projects," etc.]. Please provide detailed usage logs showing [SPECIFIC REQUESTS]. 3. SLA Credits Not Applied: We experienced [X hours/days] of service outages during [DATES] as documented in your own incident reports (Incident IDs: [XXXX]). Per Section [X] of the SLA, we are entitled to [X]% service credits totaling approximately $[AMOUNT], which should offset the disputed invoice. I request: • Detailed usage logs for [PERIOD] showing [specific metrics] • Joint reconciliation meeting to review seat counts and usage calculations • Application of SLA credits per our agreement I am willing to pay any legitimately owed amounts promptly upon reconciliation, but I do not acknowledge the debt as currently stated. [SIGNATURE BLOCK]
Response – Requesting Data Export and Proposing Settlement
I acknowledge receipt of your demand letter dated [DATE]. While I dispute portions of your claim, I recognize the need to resolve this matter promptly to avoid service disruption. My company is currently migrating to an alternative platform, and we require orderly access to our data. I propose the following resolution: 1. I will pay $[AMOUNT] (representing [X]% of your claimed amount) within [X] days, reflecting: • Undisputed invoices: $[AMOUNT] • Partial payment on disputed usage charges: $[AMOUNT] • Waiver of late fees and interest 2. In exchange, you will provide: • Full data export in [CSV/JSON/SQL] format within [X] days • Extended read-only platform access for [60] days to facilitate migration • Written confirmation that payment constitutes full settlement with mutual release This offer is contingent on your acceptance by [DATE] and immediate provision of data export access upon my payment. If you do not accept this proposal, I reserve all defenses and counterclaims, including claims for improper suspension and data access interference. Please respond by [DATE]. [SIGNATURE BLOCK]
⚖️ How I Handle SaaS Subscription Payment Disputes

I represent both SaaS vendors seeking to recover unpaid subscription fees and businesses responding to SaaS payment demands. My approach recognizes the unique leverage dynamics and data custody issues in these disputes.

For SaaS Vendors (Claimants)

Contract and Billing Model Review: I analyze your ToS, MSA, and Order Forms to assess payment terms, suspension rights, data retention obligations, and fee-shifting provisions. I evaluate whether your billing model (seat-based, usage-based, or hybrid) is clearly documented and defensible.

Usage Evidence Preparation: I work with you to compile user logs, API call records, storage metrics, and customer-facing dashboard evidence that substantiates your billing calculations and refutes customer disputes.

Demand Letter Drafting: I prepare comprehensive demand letters that establish breach, quantify damages with supporting usage data, assert suspension rights while preserving data export obligations, and offer payment plan options to accelerate settlement.

Suspension and Data Management Strategy: I advise on lawful suspension procedures that comply with your ToS and avoid wrongful termination or data conversion claims, including timing, notice requirements, and data export windows.

Arbitration and Litigation: For unresolved disputes, I handle commercial arbitration or litigation to obtain judgment and enforce collection.

For SaaS Customers (Respondents)

Demand Triage and Data Preservation: I immediately assess your data dependency risk and advise on emergency data backup and export strategies to protect business continuity before suspension.

Billing Audit and Dispute Preparation: I review your usage records, seat counts, and platform activity to identify billing errors, duplicate charges, or SLA violations that justify reduced payment or offsets.

Response Strategy: I draft professional responses that protect your access and data rights without making unnecessary admissions, and I negotiate reduced settlements or payment plans where appropriate.

Migration and Exit Negotiation: If you're transitioning to a new platform, I negotiate extended data access and orderly offboarding in exchange for partial payment and mutual release.

Defense Litigation: If necessary, I defend arbitration or litigation claims, asserting billing calculation defenses, SLA violation counterclaims, and data access interference claims.

Fee Structures
📄
Demand letter: Flat fee $450
💼
Billing Reconciliation and Audit Support Hourly billing for joint billing audits, usage calculation reviews, and extended negotiation after initial demand letter phase.
⚖️
Arbitration and Litigation Hourly billing for arbitration or court representation. For vendors with strong fee-shifting provisions, I may consider hybrid or contingency arrangements.
Schedule a SaaS Payment Dispute Strategy Call

If you're dealing with unpaid SaaS subscription fees or responding to a SaaS vendor demand letter, I can help you understand your rights, assess your leverage, and develop a cost-effective resolution strategy.

Use the Calendly link below to schedule a strategy call, or email me directly at owner@terms.law.

Schedule Strategy Call
Frequently Asked Questions

It depends on your Terms of Service. Most SaaS ToS require notice and a grace period (typically 5-15 days) before suspension. However, some ToS allow immediate suspension for accounts significantly past due. Review Section headings like "Payment Terms," "Suspension," and "Termination" in your agreement. If the vendor suspends without following their own ToS procedures, you may have claims for breach and damages.

Most SaaS ToS provide a data retention window (typically 30-60 days) after suspension, during which you can export your data. After this period, the vendor may permanently delete your data. Critical: Do not wait for suspension to request data export. If you receive a demand letter, immediately back up your data using available export tools or API access. Once suspended, export may be delayed, limited, or subject to additional fees.

Request detailed seat utilization reports showing each user, activation dates, and activity during the billing period. Export your own admin panel data showing deactivated users or inactive seats. Propose a joint seat audit to reconcile discrepancies. If your ToS includes a billing dispute process, follow it formally. Many vendors will adjust charges if you can demonstrate concrete seat count errors with documentation.

Generally, no—unless the SLA violations were material and your agreement specifically allows withholding payment (most don't). Instead, you should: (1) document the outages with support tickets and vendor incident reports, (2) calculate SLA credits you're entitled to under the agreement, and (3) request application of credits against the disputed invoice. Withholding payment without following contractual dispute procedures can expose you to suspension and fee-shifting liability.

Demand letter: Flat fee $450. Hourly rate: $240/hr. Contingency: 33-40%. This includes ToS review, usage evidence evaluation, demand letter drafting, and limited follow-up negotiation support.

If you have click-through acceptance logs (timestamp, IP address, user ID), email confirmations of upgrades or plan changes, or evidence of actual platform use, you can typically establish an enforceable contract. Even without signed agreements, courts generally uphold SaaS ToS if: (1) the customer had reasonable notice of terms (e.g., link to ToS during signup), (2) the customer took affirmative action indicating acceptance (clicking "I agree," entering payment info), and (3) the customer used the service. I evaluate your formation evidence and advise on contract enforceability.