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What Is an End-User License Agreement?
An end-user license agreement is a license that gives the user the right to use an application. It details how the software application can be used, as well as explains any restrictions. Most end-user license agreements, for example, prohibit the end user from sharing or distributing the software in any way that benefits the buyer rather than the original creator.
Before you can download and install any type of software application, you usually are required to read and agree to a user license. Once the user opens the software installer, the EULA typically must be signed digitally or the installation cannot be completed.
EULAs are not legally binding . When a consumer agrees to the terms specified in the license agreement, they are actually renting or purchasing a license from the vendor. The downside of a license agreement is that it doesn't protect the consumer. The EULA protects only the copyright owner. In fact, not only does the vendor own the license, but they also legally own any private data that the consumer entered into the software. These software owners can access, read, or share this private consumer data in any way they want.
Other Names for an End-User License Agreement
The end-user license agreement goes by a number of different names, including:
- Licensed application end-user agreement.
- Software license agreement.
- Licensing agreement.
- Software license agreement.
- Click-wrap license.
- Shrink-wrap license.
- Browse-wrap license.
Common Clauses for End-User License Agreements
There are some clauses that software owners should include in every EULA. They address the granting of licenses, infringement information, restrictions on how the application can be used, termination of licensing, and other limitations and disclaimers for the warranties and liability. The clauses include:
- License Granting The primary purpose of an end-user license agreement is to give the buyer or user the right to use the application. For this reason, every EULA should include a section that specifically states that a license is being granted.
- Restrictions for Use An end user could potentially use an app in different ways, including illegal means. You should include a section that states restrictions on how it can be used. Usually, you'll see restrictions on things like copying the license into multiple devices, using it to break laws, or on reverse engineering the software to reproduce it. It's important to always include a Restrictions of Use clause so you can limit the actions other people can take using your software application.
- Copyright Infringement Infringement issues are common when you're dealing with software. For this reason, you should always include a section in your licensing agreement that states what will happen if a user commits copyright infringement. While this section can be brief, it should include specific language that makes it really clear to the user that if copyright infringement takes place, the user will be held liable for any legal issues that arise.
- Termination of Licensing In the event of restriction violations or other issues, the software owner should keep the right to terminate the license. The Termination of Licensing clause is usually absolute, granting strong rights to the licensor of the app rather than the user or buyer.
- Warranty Disclaimer A disclaimer of warranties is an extremely important clause in any licensing agreement. It essentially states that the app is available as it is and that the developer or owner isn't responsible for making any changes or improvements to better meet the needs or desires of the end user.
- Limitations of Liability In this clause, the licensor states that they aren't responsible for any damages that could occur as a result of the app. It's an important clause to include in order to protect the licensor or provider from liability. For example, if someone installs an app on their mobile device and the phone malfunctions as a result, the owner cannot pursue liability from the provider for reparations for the phone that is damaged, even if the app did, in fact, cause the malfunction.
Components of an End-User Licensing Agreement
While a licensing agreement will vary from one product to the next, they should always include some basic components, including:
- Licensor The name, address, and other contact information for the person who developed the software.
- Warranty disclaimer Says that the software is delivered "as is" and that the provider isn't responsible for any problems that occur as a result of the software.
- Infringement acknowledgment States that any violation of copyright law assigns to the licensee.
- Governing law This identifies the state's laws that apply if any conflict comes up.
- Licensee Provides the name, address, and other contact information for the user who's requesting to use the software.
- License granting This grants permission for the licensee to use the software.
- Software Provides the name of the software being licensed.
- Maintenance and support This states whether support and maintenance will be available for the app and whether it will be delivered over the phone, via email, or in person. It also states how often maintenance will occur and on what schedule.
- Start date This states at what point the end user is bound to the terms and conditions. For example, they may be bound to the terms upon download or when they open the package.
- User restrictions This places limitations on how the end user can legally use the application.
- Site licenses This states whether the user can install the software on more than one device.
- Termination States what violations give the software provider the right to cancel the agreement.
Why Use an End-User License Agreement
When a customer downloads your software, they're essentially copying your work onto their computer or personal device. If you want to maintain any control over how it's used, you should include an EULA in the purchasing or downloading process. If the app or software has to be purchased by the user, they are typically required to agree to the EULA before paying, which means that there is no harm done if the user doesn't agree to the licensing agreement.
Some companies include licensing agreements to maintain control of their image. They may include a clause that states specifically how the software can be used or what material can be put into the app. Licensing agreements are particularly common with mobile apps and social media.
Ultimately, an end-user license agreement protects you, the owner, or licensor of the app from copyright infringement and other misuse of the software, so it's important to include one when you are distributing software to customers. If you need help creating an end-user license agreement , our lawyers can assist you.
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