Legal Framework for SaaS Feature Removal Claims
Your Core Legal Rights: When a SaaS vendor removes features, degrades functionality, or forces unwanted migrations after you have paid for a subscription, you may have claims for breach of contract, breach of implied warranty, violations of California's Unfair Competition Law (UCL), and potentially bait-and-switch under the Consumer Legal Remedies Act (CLRA).
Breach of Contract (California Civil Code)
The foundation of most SaaS feature removal claims is breach of contract. When you subscribe to a SaaS product, you enter into a contract based on:
- Express Terms: The written subscription agreement, Terms of Service, and any Order Forms specifying features included
- Marketing Representations: Feature lists, product pages, and promotional materials that became part of the bargain
- Implied Terms: The reasonable expectation that core functionality will remain available during your subscription term
- Course of Dealing: Features you have been using throughout your subscription history
| Contract Element | How It Applies to Feature Removal |
|---|---|
| Offer & Acceptance | Your subscription creates a binding contract for the features advertised |
| Consideration | Your subscription payments in exchange for access to specified functionality |
| Material Breach | Removing features that were material to your decision to subscribe |
| Damages | Cost of replacement services, lost productivity, migration costs, refund of fees paid |
Implied Warranty of Merchantability (Commercial Code 2314)
Under California Commercial Code Section 2314, there is an implied warranty that goods are merchantable and fit for their ordinary purpose. While traditionally applied to physical goods, courts have increasingly applied similar principles to software and SaaS products:
- Fitness for Purpose: The software must perform its advertised functions
- Consistent Quality: Functionality should not materially degrade during the subscription term
- Reasonable Expectations: The product should meet reasonable buyer expectations based on marketing
Important: Many SaaS agreements attempt to disclaim implied warranties. However, under California Civil Code Section 1668, disclaimers of liability for fraud, willful misconduct, or violations of law are void. If the vendor engaged in deceptive practices, warranty disclaimers may not protect them.
Unfair Competition Law (Bus. & Prof. Code Section 17200)
California's UCL prohibits any unlawful, unfair, or fraudulent business act or practice:
| UCL Prong | Application to SaaS Feature Removal |
|---|---|
| Unlawful | Conduct that violates any other law (breach of contract, CLRA violations) |
| Unfair | Conduct where harm to consumers outweighs any legitimate business justification |
| Fraudulent | Conduct likely to deceive members of the public (marketing features then removing them) |
Consumer Legal Remedies Act (Civil Code 1750-1785)
If you subscribed to the SaaS for personal, family, or household purposes, the CLRA provides additional protections:
- Section 1770(a)(5): Representing that goods have characteristics they do not have
- Section 1770(a)(7): Representing that goods are of a particular quality when they are not
- Section 1770(a)(9): Bait-and-switch - advertising goods with intent not to sell them as advertised
- Section 1770(a)(16): Representing that a transaction confers rights that it does not
30-Day Notice Required: Before filing a CLRA lawsuit for damages, you must send a 30-day notice giving the vendor an opportunity to cure. The notice must be sent by certified mail and identify the specific violations. This notice requirement does not apply to injunctive relief claims.
Statute of Limitations
| Claim Type | Time Limit | When Clock Starts |
|---|---|---|
| Written Contract Breach | 4 years | Date of breach (feature removal) |
| Oral Contract Breach | 2 years | Date of breach |
| UCL Claims | 4 years | Date of violation |
| CLRA Claims | 3 years | Date of violation |
| Fraud | 3 years | Discovery of fraud |
Related California Demand Letter Guides
Common SaaS Feature Removal Issues
1. Feature Removal Without Notice
Most Common Scenario: The vendor removes a feature you rely on with little or no advance notice. One day it works; the next day it is gone. This is often the clearest case for a demand letter, especially if the feature was material to your subscription decision.
- Critical integration or API endpoint suddenly discontinued
- Reporting or analytics capabilities removed
- Export or data portability features eliminated
- Automation or workflow features deprecated
- Storage limits reduced without prior notice
2. Functionality Degradation
Sometimes vendors do not remove features outright but degrade them to the point of uselessness:
| Type of Degradation | Example |
|---|---|
| Performance Throttling | API rate limits reduced from 10,000/hour to 100/hour |
| Quality Reduction | Video export quality downgraded from 4K to 720p |
| Capability Limits | Team member limits reduced from unlimited to 5 |
| Storage Reduction | File storage reduced from 1TB to 100GB |
| Integration Restrictions | Third-party integrations that previously worked are blocked |
Documentation is Key: If functionality is being degraded, document the before and after. Take screenshots of error messages, record response times, and save any communications about the changes. This evidence is essential for your demand letter.
3. Forced Migration to New Platforms
- Sunset Announcements: Vendor announces the product is being discontinued and you must migrate
- Forced Upgrades: Required to upgrade to a more expensive tier to keep features
- Platform Consolidation: Vendor acquired and product being merged into different system
- Version Discontinuation: Older version being retired with no equivalent in new version
Migration Costs: When vendors force migration, you may be entitled to compensation for: (1) the cost of evaluating alternatives, (2) data migration expenses, (3) retraining staff, (4) lost productivity during transition, and (5) any price increases for comparable functionality.
4. Bait-and-Switch Pricing
This occurs when vendors advertise features to attract subscribers, then remove or paywall them:
- Free features moved to paid tiers after you have become dependent
- Features included in your tier moved to higher-priced plans
- Unlimited features suddenly given hard limits
- Add-on pricing introduced for previously included functionality
CLRA Bait-and-Switch: Under California Civil Code Section 1770(a)(9), advertising goods or services with intent not to sell them as advertised is a prohibited practice. If the vendor marketed features knowing they would remove them, this may constitute bait-and-switch subject to CLRA penalties including punitive damages.
5. API and Integration Changes
- API Deprecation: APIs your business depends on are discontinued
- Breaking Changes: API updates that break existing integrations
- Rate Limit Reduction: API call limits reduced making the service unusable
- Webhook Removal: Real-time notification features eliminated
- Export Format Changes: Data export formats changed, breaking your workflows
6. Terms of Service Changes
Vendors sometimes change ToS to retroactively justify feature removal:
- Adding "we may modify or discontinue features at any time" clauses
- Removing SLA commitments for specific features
- Adding arbitration clauses to prevent class actions
- Changing data ownership or export rights
Unilateral Changes May Not Be Enforceable: Under California contract law, material unilateral modifications to a contract require additional consideration or mutual assent. Simply updating Terms of Service may not bind you to accept feature removal if you were not given meaningful notice and opportunity to reject.
Writing Your SaaS Feature Removal Demand Letter
Step 1: Gather Your Documentation
Before writing your letter, compile comprehensive evidence:
- Subscription Records: Original order, invoices, payment receipts, renewal confirmations
- Marketing Materials: Screenshots of feature pages, pricing pages, and product descriptions at time of purchase
- Product Documentation: Help articles, API documentation, feature guides that described removed functionality
- Communication History: All emails, chat logs, and support tickets about the changes
- Usage Evidence: Screenshots, exports, or records showing you used the removed features
- Impact Documentation: Records of business disruption, workarounds required, and costs incurred
- Terms of Service: Both the version when you subscribed and the current version
Use Archive.org: The Wayback Machine (web.archive.org) is excellent for retrieving historical versions of product pages and pricing that showed features at the time you subscribed.
Step 2: Calculate Your Damages
| Damage Category | How to Calculate |
|---|---|
| Subscription Fees Paid | Total paid for the subscription period when features were available but removed |
| Proportional Refund | Value of removed features as percentage of total subscription cost |
| Replacement Service Costs | Cost of alternative services to replace removed functionality |
| Migration Expenses | Staff time, consultant fees, data migration costs |
| Lost Productivity | Business losses attributable to feature removal or workarounds |
| Future Damages | Difference in cost for remaining subscription term |
Step 3: Identify Your Legal Claims
Your letter should cite the specific legal theories supporting your demand:
- Breach of Contract: The subscription agreement promised specific features that are no longer provided
- Breach of Implied Warranty: The software no longer performs its intended purpose
- UCL Violation: The conduct is unlawful, unfair, or fraudulent
- CLRA Violation: If consumer transaction, cite specific prohibited practices
- Fraud/Misrepresentation: If vendor made false statements about features
Step 4: Structure Your Demand
| Section | Content |
|---|---|
| Header | Your info, date, vendor's legal name and address |
| Subject Line | "Demand for Remedy - Feature Removal Breach of Contract" |
| Introduction | Identify yourself, your subscription, and the purpose of the letter |
| Factual Background | When you subscribed, what features were included, what was removed |
| Legal Claims | Cite breach of contract, implied warranty, UCL, CLRA as applicable |
| Damages | Itemize your losses with specific amounts |
| Demand | State exactly what you want: reinstatement, refund, compensation |
| Deadline | Give 14-30 days to respond |
| Consequences | State you will pursue legal action if not resolved |
Step 5: Specific Remedies to Demand
- Feature Reinstatement: Restore the removed features for the remainder of your subscription
- Partial Refund: Proportional refund based on value of removed features
- Full Refund: Complete refund if the removal makes the product substantially useless to you
- Downgrade Option: Ability to downgrade to a lower-priced tier that reflects actual functionality
- Migration Assistance: Data export in usable formats and reasonable transition period
- Compensation: Reimbursement for costs incurred due to the removal
CLRA 30-Day Notice: If you are asserting CLRA claims for damages, your letter must be sent by certified mail and give the vendor 30 days to cure. The letter should explicitly state it is a notice under Civil Code Section 1782.
Step 6: Delivery Method
- Certified Mail, Return Receipt Requested: Required for CLRA claims; creates proof of delivery
- Email Copy: Send courtesy copy to legal department and your account manager
- Keep Records: Retain copies of the letter, mailing receipt, and return receipt
- Track Deadline: Calendar the response deadline (30 days for CLRA, 14-21 days otherwise)
Escalation Strategy: If the vendor has a customer success team or account manager, consider giving them a brief heads-up before sending the formal demand. Some vendors will resolve issues quickly to avoid legal escalation. However, do not delay sending the formal letter if they are unresponsive.
Create Your SaaS Feature Removal Demand Letter
Interactive Generator: Fill in the form below and watch your letter update in real-time. All California-specific legal citations are automatically included. Click "Download" when finished to get your letter as a Word document.
Your Information
Vendor Information
Original Features Promised
List each feature on a new line
Changes Made by Vendor
Impact on Your Business
Include subscription fees, replacement costs, lost productivity
Remedy Demanded
30 days required for CLRA claims
After generating your letter:
- Review all highlighted fields and ensure accuracy
- Attach copies of your subscription confirmation and screenshots of original features
- Send via Certified Mail, Return Receipt Requested for CLRA compliance
- Keep a copy of everything for your records
- Calendar the 30-day deadline for response
Remedies & Enforcement Options
Available Remedies Under California Law
| Remedy | Description | Requirements |
|---|---|---|
| Actual Damages | Compensation for economic losses including subscription fees, replacement costs, lost productivity | Prove causation between breach and harm |
| Punitive Damages | Additional damages for willful CLRA violations | Show vendor acted intentionally or with reckless disregard |
| Restitution | Return of money paid for features not delivered | Available under CLRA and UCL |
| Injunctive Relief | Court order requiring vendor to restore features or stop practices | No 30-day notice required for injunction claims |
| Attorney Fees | Reimbursement of legal costs | Mandatory for prevailing CLRA plaintiffs |
California Small Claims Court
Best Option for Many Cases: California Small Claims Court allows claims up to $12,500 for individuals ($6,250 for businesses) without an attorney. The process is fast, inexpensive, and designed for exactly these types of disputes.
- Filing Fee: $30-$75 depending on claim amount
- Timeline: Typically 30-70 days from filing to hearing
- Venue: County where defendant does business or where contract was entered
- No Attorney Required: Parties represent themselves
- Service: Must serve defendant with claim at least 15 days before hearing
Civil Litigation (Superior Court)
For claims exceeding small claims limits or seeking injunctive relief:
- Limited Civil: $12,501 - $35,000
- Unlimited Civil: Over $35,000 or seeking injunctive relief
- Discovery: Can obtain internal documents about feature removal decision
- Class Action: If many subscribers affected, class action may be appropriate
Arbitration Clauses: Many SaaS agreements contain mandatory arbitration clauses. Review your Terms of Service. Under California law, some arbitration provisions may be unconscionable and unenforceable, particularly if they limit CLRA remedies or bar class actions in consumer contracts.
Regulatory Complaints
Filing complaints can create pressure for resolution:
| Agency | What They Handle |
|---|---|
| California Attorney General | Consumer complaints about unfair business practices, CLRA violations |
| FTC | Deceptive trade practices, bait-and-switch advertising |
| Better Business Bureau | Consumer complaints (not regulatory, but creates public record) |
| State Consumer Protection | CA Dept. of Consumer Affairs for licensed businesses |
Chargeback (Credit Card Dispute)
If you paid by credit card, you may be able to dispute charges:
- Timeframe: Generally 60-120 days from the charge date
- Grounds: Services not provided as described, quality not as represented
- Evidence: Provide documentation of feature changes and original representations
- Limitations: May only recover recent charges, not historical subscription fees
Combining Strategies: The most effective approach often combines multiple tactics: (1) send formal demand letter, (2) file regulatory complaints to create pressure, (3) initiate chargeback for recent charges, (4) file small claims if no resolution. This multi-pronged approach signals you are serious about pursuing remedies.
Calculating Your Claim Value
- Subscription Fees: Calculate fees paid during period when features were unavailable
- Feature Value: If possible, calculate value of removed features as percentage of total cost
- Replacement Costs: Document cost of alternative services to replace lost functionality
- Migration Expenses: Staff time, consultant fees, data migration costs
- Productivity Loss: Document hours spent on workarounds multiplied by hourly rate
- Consequential Damages: Lost business, missed deadlines, customer complaints
Attorney Services
Need Help With Your SaaS Dispute?
I help individuals and businesses enforce their rights when SaaS vendors remove features, degrade functionality, or breach subscription agreements. From demand letters to litigation, I can help you recover what you are owed.
How I Can Help
- Case Evaluation: Review your subscription agreement, marketing materials, and documentation to assess claim strength
- Demand Letter Drafting: Professional, legally compliant demand letters citing all applicable California statutes
- Negotiation: Direct negotiation with vendor's legal team to reach resolution
- Arbitration: If your agreement requires arbitration, representation in arbitration proceedings
- Litigation: Filing and prosecuting claims in California courts
- Class Actions: Evaluating and pursuing class action claims if many subscribers affected
Types of Cases I Handle
- SaaS feature removal without notice or consent
- Functionality degradation making product unusable
- Forced migration to more expensive tiers
- API deprecation breaking business integrations
- Bait-and-switch pricing (features moved behind paywalls)
- Data hostage situations (can't export without paying more)
- Subscription auto-renewal disputes
- Terms of Service changes that materially alter the bargain
When to Consult an Attorney
Consider consulting an attorney if:
- Your damages exceed $10,000
- The vendor has ignored your demand letter
- Your agreement contains arbitration or class action waiver clauses
- You believe many other subscribers were affected (potential class action)
- You need injunctive relief to force feature restoration
- The vendor is threatening legal action against you
- You operate a business critically dependent on the removed features
Fee Arrangements
- Demand letter: Flat fee $450
- Hourly: Pay as you go for ongoing representation
- Contingency: For larger claims, fees may be paid from recovery
- Statutory Fee Recovery: CLRA mandates attorney fee awards to prevailing consumers
Schedule a Consultation
Book a call to discuss your SaaS feature removal case. I will review your situation, explain your legal options, and recommend the most effective strategy.
Contact Information
Email: owner@terms.law
Frequently Asked Questions
It depends on what your subscription agreement says and how the features were marketed. Most SaaS agreements give vendors broad discretion to modify the service, but this does not mean they can do anything they want. Under California law, if features were material to your subscription decision and were expressly or impliedly promised, their removal may constitute breach of contract. If the vendor marketed features knowing they would remove them, this may be bait-and-switch under the CLRA. Additionally, terms that allow unlimited modification may be unconscionable and unenforceable.
For CLRA damage claims, yes. California Civil Code Section 1782 requires you to send a written notice by certified mail giving the vendor 30 days to cure the violation before you can sue for damages. The notice must identify the specific CLRA violations and the harm suffered. However, the 30-day notice is NOT required if you are only seeking injunctive relief (a court order stopping the practice). For breach of contract claims that do not invoke the CLRA, no statutory notice is required, but sending a demand letter is still advisable.
Many SaaS agreements contain mandatory arbitration clauses that prevent you from suing in court. These are generally enforceable under federal law (the Federal Arbitration Act). However, California courts have found some arbitration clauses unconscionable, particularly if they: (1) are buried in fine print, (2) require arbitration in an inconvenient location, (3) impose excessive fees, or (4) eliminate remedies available under consumer protection statutes. Even with arbitration, you can still pursue CLRA and breach of contract claims - you just do so in arbitration rather than court. The CLRA prohibits waiving its substantive protections.
You may recover: (1) actual damages including subscription fees paid for functionality not received, (2) cost of replacement services, (3) lost productivity and business losses, (4) migration and transition costs, (5) punitive damages if the vendor's conduct was willful (CLRA claims), and (6) attorney fees if you prevail on CLRA claims. There is no cap on CLRA damages. For breach of contract, you can recover the benefit of the bargain - what you would have received had the contract been performed.
Possibly. Credit card chargebacks are available for services not provided as described. You typically have 60-120 days from the charge date to initiate a dispute. Provide your credit card company with documentation showing the original feature promises and evidence of removal. Be aware that chargebacks may only recover recent charges, not your entire subscription history. Also, the vendor may close your account in response to a chargeback. It can be an effective tool but should be used strategically, often in conjunction with a demand letter.
Consider your options carefully before canceling. If you cancel, you may lose access to data and any leverage for negotiation. On the other hand, continuing to pay for a degraded service may weaken your claim that the breach was material. A middle approach: send your demand letter first and request a refund while maintaining access. If the vendor refuses to remedy the situation, you can then cancel and demand a full refund. Document everything before canceling - export your data, take screenshots, and preserve evidence of the current state of the product.