SAP agreements are built to keep you paying, even when SAP cannot perform. Force majeure clauses that protect SAP but not you. Termination provisions that make exit prohibitively expensive. Lock-in that compounds with every renewal. This guide tells you what to change before you sign.
SAP termination rights are the provisions most enterprises review last and least. The sales cycle focuses on what SAP will do for you; the lawyers focus on liability and indemnity; the technical team focuses on implementation requirements. Exit provisions — the clauses that govern how and when you can end the relationship — are treated as theoretical concerns for a future problem that may never arrive.
This logic fails in practice. Enterprises that have signed multi-year SAP agreements without adequate SAP termination rights find themselves trapped when business circumstances change: a strategic pivot away from SAP, a major M&A event, a persistent performance failure that falls just short of the contractual "material breach" threshold, or a financial crisis that makes the SAP commitment unsustainable. In each of these scenarios, the absence of negotiated exit rights forces a choice between massive break fees and continuing to pay for something that no longer serves you.
The same logic applies to force majeure provisions. The COVID-19 period provided a generation of legal and procurement teams with a live lesson in how force majeure clauses actually operate — and the lesson was a difficult one for enterprises with one-sided SAP provisions. Our SAP contract negotiation team has helped dozens of enterprises avoid these traps. This article maps the provisions to watch and the counter-positions that protect you.
Force majeure clauses are intended to address extraordinary events — natural disasters, pandemics, war, government action — that prevent a party from fulfilling its contractual obligations. The concept is well-established and reasonable. The problem with SAP's standard force majeure clauses is in the execution: they are drafted asymmetrically to protect SAP's interests, not yours.
SAP's standard force majeure clause typically: (1) lists a broad range of events — natural disasters, acts of government, industrial action, supply chain failures — that can trigger force majeure relief for SAP; (2) suspends SAP's performance obligations (delivery, support, system availability) during the force majeure event; (3) does NOT suspend your payment obligations — you continue to pay during the period SAP cannot perform; (4) provides SAP with the right to terminate the agreement if the force majeure event continues beyond a defined period without corresponding right for you; and (5) includes cyber events and infrastructure failures within the scope of "force majeure" events, giving SAP broad relief from cloud availability commitments.
The asymmetry is intentional. SAP gets performance relief; you continue paying. If the event drags on, SAP can exit; you cannot (without penalty). This structure was tested severely during COVID-19, when multiple SAP customers discovered they had continued payment obligations for periods when SAP was delivering reduced service levels under force majeure protection.
A balanced force majeure provision operates on a simple principle: the same force majeure event that relieves SAP of its performance obligations should also relieve you of your payment obligations. This symmetry is the minimum standard for a commercially fair arrangement. Specifically:
SAP's standard agreements for multi-year commitments — particularly RISE with SAP, GROW with SAP, and multi-year on-premise agreements — do not include a customer right to terminate for convenience. Once you sign a five-year RISE agreement, you are committed to five years of payments regardless of what changes in your business, your technology strategy, or your financial position.
This is the starkest example of asymmetric contract design. SAP retains the right to terminate for cause (if you fail to pay or materially breach the agreement). SAP may retain force majeure termination rights. But you — the customer paying tens of millions over the contract term — have no unilateral right to exit without penalty. The commercial justification SAP offers is that it has made committed infrastructure and delivery investments based on your subscription. The reality is that SAP's standard position is simply the most commercially aggressive outcome SAP can secure in negotiation.
A Global 500 enterprise signs a RISE with SAP agreement for five years at €8 million per year. Two years into the agreement, the company is acquired by a US private equity firm that has a strategy of replacing SAP with a specialist ERP for the acquired business. Without a termination for convenience right, the enterprise faces three years of remaining obligations — €24 million — with no unilateral exit mechanism. The PE firm must either pay the break cost, negotiate a termination settlement with SAP from a position of zero leverage, or continue paying for SAP systems they are actively working to replace.
This scenario is not hypothetical. Our negotiation team regularly advises enterprises caught in this exact position. The solution is to negotiate termination for convenience rights before signature — not to manage the consequences after.
Termination for convenience rights are achievable in SAP agreements, particularly for large multi-year commitments where SAP has significant commercial interest in closing the deal. The negotiating framework our team uses is as follows:
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Our SAP contract negotiation team can secure termination for convenience rights before you sign. Book a free consultation — the time to negotiate is now, not after signature.
Where termination for convenience is absent, termination for cause becomes the customer's only unilateral exit mechanism. The problem with SAP's standard termination for cause provisions is that the threshold for what constitutes "cause" is set extremely high — and the cure periods SAP is granted before you can exercise termination rights are extremely long.
SAP's standard position defines "cause" as material breach of the agreement, with a cure period of 30 to 60 days from written notice. "Material breach" is defined narrowly: typically, failure to pay licence fees and a small number of fundamental performance failures. Persistent support failures, repeated SLA breaches, product defects that impair your operations, and failure to deliver contracted functionality on schedule do not automatically constitute "material breach" under standard SAP definitions.
Effective termination for cause provisions should include: explicit definition of what constitutes material breach, including specific SLA breach thresholds; cure periods proportionate to the severity of the breach (not a blanket 60 days for all breaches); escalating consequences for repeated breaches, even where individually cured within the cure period; and termination right without penalty for persistent failure over a defined measurement window (e.g., three consecutive months below agreed SLA).
SAP's change of control provisions are a source of significant commercial friction during M&A transactions. Standard provisions require SAP's written consent for any assignment of the SAP agreement arising from acquisition, merger, or divestiture — and SAP uses this consent requirement as leverage to drive incremental licence purchases during corporate restructuring events.
The typical scenario: a company is acquired, and the acquirer wishes to merge the target's SAP environment with its own. SAP's consent requirement gives SAP the opportunity to conduct a comprehensive licence review of the combined entity and assert that additional licences are required. Since both parties need the agreement to proceed with the restructuring, SAP has maximum leverage at the moment of the consent request. Enterprises that have pre-negotiated change of control provisions — streamlined consent processes, agreed valuation methodologies for licence transfers, and caps on SAP's ability to impose additional commercial requirements — avoid this trap entirely. The full context for SAP contract management is covered in our SAP T&Cs complete guide.
Related to termination rights but distinct from them, step-down provisions give you the right to reduce your SAP licence and subscription scope — number of users, product modules, cloud capacity — during the contract term. SAP's standard position on step-down is restrictive: licences cannot be reduced below the initial contracted level without SAP's consent, which SAP is not obliged to give.
For enterprises that experience headcount reductions, operational changes, or technology consolidation during a multi-year SAP agreement, the inability to step down scope creates a significant overpayment problem. Our SAP licence optimisation service has helped enterprises renegotiate step-down rights and recover millions in ongoing overcommitment. For context on how SAP structures licence scope, the SAP licensing basics guide provides the foundation.
Under standard RISE with SAP terms, early termination for SAP performance failure requires demonstrating "material breach" — a high threshold that persistent but sub-catastrophic service failures typically do not meet. To secure meaningful performance-based termination rights, you need to negotiate specific SLA breach thresholds that trigger termination rights, with defined measurement windows and cure periods. These provisions are achievable but must be negotiated before signature.
For on-premise perpetual licences, termination of a maintenance agreement does not automatically terminate your right to use the software — you retain your perpetual licence. However, you lose SAP support and the right to use new versions, and SAP's licence terms restrict ongoing use of unsupported software in ways that create practical complications. For cloud agreements (RISE, GROW, BTP subscriptions), termination ends your right to access the cloud services and requires data extraction within SAP's defined retention window.
SAP's standard RISE agreements include SLA commitments for cloud availability and performance, but the force majeure clause provides SAP with relief from these commitments in defined circumstances. The key issue is that the definition of force majeure events that trigger SLA relief overlaps significantly with infrastructure and operational events that SAP should be managing as part of its cloud delivery obligation. Cyber incidents, infrastructure failures, and third-party provider issues are all potentially within SAP's force majeure scope under standard terms. Restricting force majeure relief for events within SAP's operational control is an important negotiating objective for RISE agreements.
Before any M&A transaction involving an SAP estate, check: (1) change of control provisions — whether SAP's consent is required and what conditions SAP can impose; (2) assignment restrictions on licence transfers between entities; (3) audit rights — whether an acquisition event triggers an SAP audit right; (4) price renegotiation rights — whether SAP can renegotiate pricing upon change of control; and (5) step-down rights — whether you can reduce scope after the transaction. Our contract negotiation team provides pre-M&A SAP contract assessments as a standard service.
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