Your SaaS Project Just Broke - Who’s Responsible?

Last week, I was thinking about how much personal branding has changed things for me.

My LinkedIn is pulling in leads, I’m getting discovery calls with the right people, and it’s all finally clicking.

But you know what hasn’t changed? The fact that most people still sign contracts without reading them.

Especially in SaaS.

Every week, I see founders agree to terms they haven’t even skimmed. They assume responsibility for things completely outside their control.

Then, when something breaks, they’re stuck footing the bill.

Let’s say you’re running a SaaS platform. Your product relies on a third-party API to process payments. One day, the API crashes. Transactions fail. Customers can’t pay.

Now your inbox is flooded with angry emails. Your biggest client demands compensation. The API provider? They’re silent.

You check your contract, and suddenly, you realize: that nowhere does it say who’s responsible when this happens.

Now, you’re refunding customers, covering losses, and taking the hit for something that wasn’t even your fault.

This is why every SaaS agreement needs clear liability terms.

Why Third-Party Risks Kill Businesses

Most SaaS platforms rely on third-party tools - APIs, integrations, cloud services, you name it.

But here’s the problem: when those tools fail, your clients don’t care whose fault it is. They just want it fixed.

Let’s break down how this plays out:

Scenario 1: The API Crash

Your payment processor’s API goes down. Transactions fail, and your clients lose revenue.

They demand compensation, but your contract doesn’t specify who’s responsible for third-party failures. Now, you’re stuck refunding customers and covering losses.

Scenario 2: The Cloud Outage

Your hosting provider has a major outage. Your platform goes offline for hours.

Clients demand SLA credits, but your uptime guarantee doesn’t exclude third-party issues. Now, you’re paying for downtime that wasn’t your fault.

Scenario 3: The Integration Gone Wrong

A client insists on using a third-party tool you’ve never tested. It breaks, and they blame you. Without a clause shifting responsibility, you’re left fixing the mess.

The common thread? You’re paying for problems you didn’t cause.

Ways I Suggest To Protect Your SaaS Business

You can’t stop third-party tools from failing, but you can make sure you’re not left holding the bag. Here’s what I recommend.

1. Add a Third-Party Disclaimer

What to say:

“We are not liable for disruptions caused by integrations, APIs, or tools outside our control.”

This ensures that if an external service fails, you’re not responsible for the fallout.

It’s a simple way to shift liability back to the third party - or the client if they insist on using the tool.

Side tip: For extra protection, list specific third-party tools in your contract. For example:

“Client acknowledges that [Payment Processor X] and [Cloud Provider Y] are third-party services outside our control.”

2. Define Uptime Guarantees Carefully

What to say:

“99% uptime applies only to our core platform, excluding third-party services.”

Clients often demand refunds for downtime, even when it’s caused by third-party failures.

This clause makes it clear that your uptime guarantee doesn’t cover external tools.

3. Require Client Sign-Off on Integrations

What to say:

“Client acknowledges and accepts risks of using [Third-Party Tool X]. Developer is not responsible for disruptions caused by this integration.”

This eliminates the “We didn’t know!” argument when something breaks. If the client insists on using a risky tool, they’re agreeing to take responsibility for the consequences.

Your Pre-Signature Checklist

Now to wrap it all up, before signing any contract, ask:

1) Third-party tools: Are we liable if they fail? If so, add a disclaimer.

2) Uptime guarantees: Do they exclude third-party issues? If not, clarify.

3) Client sign-off: Do they acknowledge the risks of using external tools? If not, require it.

Final Note: Plan for the Break Before It Happens

Most SaaS platforms rely on third-party tools. But if you don’t set clear boundaries in your contracts, you’re the one who pays the price when things go wrong.

So before you sign anything, ask yourself: If this breaks, who takes the hit?

If the answer isn’t clear, fix it before it’s too late.