Your AI software might not be working for you

Let me put you in a hypothetical scenario right away. Imagine you’ve just signed up for a new SaaS platform to manage your customer data.

At first, everything looks great. The software seems to be doing what it promised. But halfway through the setup, things start to fall apart.

The platform doesn’t integrate with your existing systems the way it should, and suddenly, you’re stuck with a solution that isn’t working for your business.

Now what?

If your contract doesn’t give you an easy way out, you’re stuck.

You’ve already poured time and money into this platform, and there’s no way to walk away without paying heavy penalties.

This is why having termination rights, a way to exit when things go wrong, is so important in SaaS agreements.

It gives you the flexibility to cut your losses if the software doesn’t deliver.

The Wrong Steps I've Seen People Take

When dealing with SaaS contracts, businesses often rely on strategies that seem reasonable at the time but end up being risky.

Here’s what I've seen people typically do—and why these approaches don’t always work:

1) Assuming the Software Will Work as Promised:

A lot of companies trust that the software will work exactly like the vendor promised and don’t plan for what happens if it doesn’t.

But no matter how great the software looks in demos, real-world use can uncover issues.

Maybe it doesn’t play well with your other systems, or it lacks the features you need.

Without a way to exit the contract, you’re stuck paying for something that isn’t helping your business.

In some cases, you could be tied to a long-term deal with software that’s holding you back, and the only way out is to pay big penalties.

2) Relying on Vendor Support to Fix Everything:

Some businesses assume that if things go wrong, the vendor will provide support and fix the issues.

The best thing to happen is - vendors offer some level of support, but there’s no guarantee they can solve major problems.

Especially if the issue is with how the software integrates with your existing systems.

If your new CRM doesn’t work with the tools you already use, vendor support may not be able to help.

Without an exit strategy in your contract, you could be stuck waiting for a solution that may never come.

3) Thinking a Warranty Covers All Problems:

Many companies believe that the standard warranties in a SaaS contract will protect them if the software doesn’t work as expected.

Warranties usually have limitations. They might cover defects in the software but not issues with how it integrates into your systems or fits your specific needs.

Even if the software is technically working, it might not be delivering what you expected—and a warranty won’t give you an easy way to walk away.

4) Skipping the Testing Phase:

Some businesses rush into full use of the software without including a testing phase in their contract.

If you don’t test the software first, you might not realize there are problems until it’s too late.

A well-written contract should include a post-implementation testing phase, where you can fully assess whether the software works for your needs.

If it doesn’t, you should have the option to back out without penalties.

Here's An Example To Understand This Better

Let’s say you’ve signed up for a new SaaS platform, but during setup, you discover big issues.

The software isn’t syncing with your CRM, and it’s slowing everything down.

You reach out to the vendor, who promises updates will fix it, but months go by, and nothing improves.

Now, you’re stuck in a multi-year contract with no way to exit without paying huge fees, and the software is holding your business back.

Compare that to a scenario where your contract includes a termination-for-convenience clause.

You realize early on that the software isn’t meeting your needs, so you cancel the agreement without penalties.

You save time, and money, and avoid further disruption to your business. Now, you’re free to find a solution that works.

My Steps To Protect A Business

To avoid getting stuck in a bad SaaS deal, you need to build flexibility into your contract from the start. Here’s what I suggest:

1) Include a Termination-for-Convenience Clause:

This clause lets you cancel the contract at any time, for any reason, without having to prove the software is broken.

It gives you the freedom to walk away if things aren’t working out.

While vendors may push back on this, it’s worth negotiating for. Especially if you’re committing to a long-term contract.

2) Set Up a Post-Implementation Testing Period:

Make sure your contract includes a testing phase after implementation, where you can assess the software’s performance.

If it doesn’t meet the agreed standards, you should be able to cancel without penalties. This gives you a safety net before fully committing.

3) Define Measurable Performance Goals:

Include specific performance benchmarks in your contract—things like uptime guarantees, integration with your existing tools, or processing speeds.

If the software doesn’t meet these targets, you should have the right to exit the deal without penalty.

4) Outline Termination Rights for Major Failures:

If the software fails to do something critical—like integrate with your key systems—your contract should allow you to cancel.

Make sure it’s clear what counts as a “major failure” and how you can walk away if it happens.

5) Negotiate Pro-Rated Refunds:

If you cancel early, negotiate for a pro-rated refund of any fees you’ve already paid.

This way, you’re not stuck paying for months of service you never used. It helps soften the financial blow if you need to back out.

Final Takeaway:

Normally termination rights are ignored. But I treat them as safety nets for businesses. If something goes wrong, you can fall back on them.

Without them, you’re at the mercy of software that might not live up to its promises, and you could find yourself locked into an expensive contract that’s not delivering value.

By making sure your contract includes a way to exit, a testing phase, and clear performance goals, you’re protecting your business from being stuck with software that doesn’t work for you.

At the end of the day, you're keeping your business flexible.

If you need my help in reviewing such Contracts for you, reply "REVIEW" and I'll send you steps on how we can work together.