Software License Agreement

Clients Rate Lawyers on our Platform 4.9/5 Stars
based on 3,979 reviews

Jump to Section

Need help with a legal contract?

CREATE A FREE PROJECT POSTING
Post Project Now

Software license agreements protect developers and sell their services as intended. We’ve outlined everything you need to know about software license agreements and how they work in this post.

What is a Software License Agreement?

A software license agreement is a legal agreement between a developer and user. They protect their legal rights and against the unauthorized distribution of software. Businesses create these conditions to safeguard the developer’s intellectual property (IP) rights and limit potential liability for damage caused by their software.

Here is an article that also discusses software license agreements.

What’s Included in a Software License Agreement?

The majority of businesses rely on software to expand and grow. Enterprises increasingly leverage cloud-based technologies to leverage the cloud’s critical IT infrastructure, e-commerce tools, and efficiencies.

Below, we’ve outlined nine terms typically included in a software license agreement:

Term 1. Intellectual Property Rights

Intellectual property is a prized possession. If the end-user has access to or uses IP in any way, the agreement should establish who owns it, how and when they may use it, and address violations of those obligations. The developer will own the intellectual property rights to their services and impose strict license terms on customers who use those services.

Term 2. Information Security Policy

Businesses should prepare proactively for data security and privacy breaches. Privacy and data laws are stringent, and penalties for violations can be severe. It is critical that the agreement adequately addresses service providers with access to personally identifiable information’s cybersecurity obligations (PII).

Term 3. Scope

All contracts benefit from comprehensive and unambiguous definitions, which help avoid disputes over divergent interpretations. However, establishing clear explanations can be tricky, even more so in the context of development. Ensure that you get as detailed in your software licenses agreement as necessary.

Term 4. Limitations of Liability

Service providers will always seek to limit their liability. Along with reducing their exposure, liability limitations provide developers with greater certainty regarding unforeseen future costs. Caps on liability are a widely used method of limiting liability as well.

Term 5. Warranty Exclusions

Agreements often include warranties and limitations to balance the developer and the customer, providing each with the reasonable protection they seek. Service providers generally prefer to limit their warranties as well. Things happen, and customers frequently have unreasonable expectations for customizable or third-party software, which means it’s essential to prepare beforehand.

Term 6. Project Governance

End-users should seek to include a right to notice in their agreement in the event of a delay, particularly if the service provider asserts that the customer is to blame. Doing so ensures that the developer cannot permit delays without informing the customer and vice versa.

Term 7. Pricing and Payment Terms

Negotiating a breakdown of the service provider’s fees according to the specific deliverables performed benefits both parties. Additionally, they can agree on fixed rates. This point appeals to suppliers and customers alike, especially those seeking price certainty.

Term 8. Term Limits

The duration of any agreement is typically one of the most critical terms. Since cloud products and services do not have the same shelf life as traditional products and services, customers feel more comfortable committing for extended periods. Additionally, the length of the initial term, renewal periods, price increases, and each party’s termination rights are relevant.

Term 9. Open-Source Disclosures

Open source benefits both software developers and customers by reducing development time and costs. Providers of open source services should provide information to customers and demonstrate compliance with open source terms.

Meet some lawyers on our platform

Justin K.

3 projects on CC
View Profile

Bryan B.

97 projects on CC
View Profile

Ryenne S.

127 projects on CC
View Profile

Todd H.

2 projects on CC
View Profile

Purpose of a Software License Agreement

Software developers release software for various reasons, including demonstrating a new concept, benefiting the most significant number of people possible, or for financial and economic gain. To prevent unwanted and unlawful activity, you must clearly define the terms and conditions for users.

Here are seven purposes of a software license agreement

  • Purpose 1 . Define where users can install your software
  • Purpose 2 . Limit the number of end-user and device installations
  • Purpose 3 . Express how users can engage with your software
  • Purpose 4 . Allow or prevent copies, modifications, or redistributions
  • Purpose 5 . Communicate applicable copyright safeguards
  • Purpose 6 . Outline software ownership
  • Purpose 7 . Impose a duration of the agreement’s terms

Software licenses contain the entirety of the agreement between the licensor and the licensee . The objective is to clarify the relationship from both a legal and technical standpoint. There are no surprises or guesses about who is responsible for what during the agreement term.

ContractsCounsel Software License Agreement Image

Image via Pexels by luis gomes

Types of Software Licenses

There are five primary categories or types of software licenses . These cover a wide variety of licensing scenarios, ranging from free software to commercial software. You should become familiar with your options that go beyond end-user license agreements , software maintenance agreements , sublicense agreements , and SaaS agreements .

Below, we’ve outlined the five types of software agreements used most commonly by developers and software-as-a-service (SaaS) providers:

Type 1. Public Domain Licenses

Without restriction, anyone may use and modify public domain license software. This “permissive” license permits the incorporation of the code into applications or projects and the repurposing of the software. Businesses must exercise caution when utilizing public domain software in projects or other mission-critical applications.

Type 2. GNU/Lesser General Public Licenses

Developers who use an LGPL license have the right to include open source libraries in their software. When creating projects with an LGPL-licensed library, they may license the code under any other license. The exception to this standard is that when any portion is copied or modified, the terms of the original license will apply to the developed code sourced from the library.

Type 3. Permissive Licenses

This license is one of the most prevalent types of open-source software licenses. A permissive license imposes few restrictions or requirements on the distribution and modification of the software. Permissive licenses vary in the requirements for preserving license notices and copyright for the software, how they may use it, trademark requirements, and other stipulations.

Type 4. Copyleft Licenses

The terms of a copyleft license are restrictive. Under a copyleft, users can modify licensed code as part of a software project as long as they distribute the new version under the same software license as the original code. If the code was intended solely for personal use, the new product must use the same designation.

Type 5. Proprietary Licenses

Proprietary software licenses make it unlawful to copy, modify, or distribute applications. This type is the most restrictive since they safeguard the developer or owner against unauthorized use. Software licensing agreement lawyers can help you negotiate and draft a proprietary license that prevents unlawful practices.

Why You Need a Software License Agreement

As a software developer, you’ve almost certainly invested a significant amount of time and money developing the software you’re licensing. You’re probably also counting on it to generate revenue for you as a result. That is where a license agreement for software comes into play.

Below are the five reasons why it’s essential to get a software license agreement:

  • Reason 1 . It guards against software abuse
  • Reason 2 . It enables you to license it rather than selling it
  • Reason 3 . It allows you to mitigate warranty claims
  • Reason 4 . It may serve to limit your liability
  • Reason 5 . It will enable you to discontinue unauthorized use

As you can see, there are several essential functions that software license agreements fulfill. Technology lawyers can help you draft and execute your agreements while protecting your legal rights.

Post a project in ContractsCounsel’s marketplace to get free bids from lawyers for your project. All lawyers are vetted by our team and peer-reviewed by our customers for you to explore before hiring.

How ContractsCounsel Works
Hiring a lawyer on ContractsCounsel is easy, transparent and affordable.
1. Post a Free Project
Complete our 4-step process to provide info on what you need done.
2. Get Bids to Review
Receive flat-fee bids from lawyers in our marketplace to compare.
3. Start Your Project
Securely pay to start working with the lawyer you select.

Meet some of our Software License Agreement Lawyers

Christina S. on ContractsCounsel
View Christina
5.0 (1)
Member Since:
November 1, 2022

Christina S.

Managing Attorney
Free Consultation
Get Free Proposal
Kingsport, TN
12 Yrs Experience
Licensed in TN
Appalachian Law School

I am an attorney who has been practicing for over a decade, experienced in multiple areas of law, both from a litigation and more procedural side. The great thing about my practice is that it has trained me to deal with so many different types of problems and to find solutions in a variety of legal scenarios that are almost never similar.

Dean F. on ContractsCounsel
View Dean
5.0 (4)
Member Since:
November 18, 2022

Dean F.

Managing Attorney
Free Consultation
Get Free Proposal
Castle Rock, CO
27 Yrs Experience
Licensed in CA, CO, TN
University of Mississippi School of Law

Ferraro Law Firm was founded by Dean C. Ferraro. Dean earned his Bachelor's Degree from California State Polytechnic University, Pomona ("Cal Poly Pomona") in 1992 and his J.D. Degree from the University of Mississippi School of Law ("Ole Miss") in 1996. He is licensed to practice law in the State Courts of Colorado, Tennessee, and California. Dean is also admitted to practice before the United States District Courts of Colorado (District of Colorado), California (Central District), and Tennessee (Eastern District). Shortly after earning his law license and working for a private law firm, Dean joined the District Attorney's office, where he worked for five successful years as one of the leading prosecuting attorneys in the State of Tennessee. After seven years of practicing law in Tennessee, Dean moved back to his birth state and practiced law in California from 2003-2015. In 2015, Dean moved with his family to Colorado, practicing law in beautiful Castle Rock, where he is recognized as a highly-effective attorney, well-versed in many areas of law. Dean's career has entailed practicing multiple areas of law, including civil litigation with a large law firm, prosecuting criminal cases as an Assistant District Attorney, In-House Counsel for Safeco Insurance, and as the founding member of an online law group that helped thousands of people get affordable legal services. Pursuing his passion for helping others, Dean now utilizes his legal and entrepreneurial experience to help his clients in their personal and business lives. Dean is also a bestselling author of two legal thrillers, Murder in Santa Barbara and Murder in Vail. He currently is working on his next legal thriller, The Grove Conspiracy, set to be published in 2023.

Karl D. S. on ContractsCounsel
View Karl D.
Member Since:
October 28, 2022

Karl D. S.

Attorney
Free Consultation
Get Free Proposal
Middlebury, Connecticut
11 Yrs Experience
Licensed in CT, MA
Pepperdine University School of Law

Karl D. Shehu, has a multidisciplinary practice encompassing small business law, estate and legacy planning, real estate law, and litigation. Attorney Shehu has assisted families, physicians, professionals, and people of faith provide for their loved ones by crafting individualized estate and legacy plans. Protecting families and safeguarding families is his passion. Attorney Shehu routinely represents lenders, buyers, sellers, and businesses in real estate transactions, researching and resolving title defects, escrowing funds, and drafting lending documents. To date, Attorney Shehu has closed a real estate deal in every town in Connecticut. As a litigator, Attorney Shehu has proven willing to engage in contentious court battles to obtain results for his clients. While practicing at DLA Piper, LLP, in Boston, Attorney Shehu represented the world’s largest pharmaceutical companies in multidistrict litigations filed throughout the United States. He has been a passionate advocate for immigrants and the seriously injured, frequently advising against lowball settlement offers. He is willing to try every case to verdict, and he meticulously prepares every case for trial. Attorney Shehu began his legal career as a consumer lawyer, utilizing fee-shifting statutes to force unscrupulous businesses to pay the legal fees of aggrieved consumers. For example, in Access Therapies v. Mendoza, 1:13-cv-01317 (S.D. Ind. 2014), Attorney Shehu utilized unique interpretations of the Trafficking Victims Protection Act, Truth-in-Lending Act, and Racketeer Influenced and Corrupt Organizations Act (RICO) to obtain a favorable result for his immigrant client. Attorney Shehu is a Waterbury, Connecticut native. He attended Our Lady of Mount Carmel grammar school, The Loomis Chaffee School, and Chase Collegiate School before earning degrees from Boston College, the University of Oxford’s Said Business School in England, and Pepperdine University School of Law. At Oxford, Karl was voted president of his class. Outside of his law practice, Attorney Shehu has worked to improve the world around him by participating in numerous charitable endeavors. He is a former candidate for the Connecticut Senate and a parishioner of St. Patrick Parish and Oratory in Waterbury. In addition, Attorney Shehu has written extensively on the Twenty-fifth Amendment and law firm retention by multinational firms.

Kimbrelly K. on ContractsCounsel
View Kimbrelly
Member Since:
November 1, 2022

Kimbrelly K.

Attorney
Free Consultation
Get Free Proposal
Lake Lure, NC
25 Yrs Experience
Licensed in NC
University of North Carolina at Chapel Hill

Attorney Kegler has been licensed to practice law in ​the State of North Carolina since 1998. Over the years,​ she has worked in firms that focused on small​ business financing, initial startup formation, to​ starting several businesses of her own with bootstrap​ financing to venture capital funding. As a Certified​ Dream Manager, she couples the skills of listening to​ understand the big picture to get to solutions that not​ only fit today's needs but also the long term needs of​ her entrepreneurial clients.​

Maigan W. on ContractsCounsel
View Maigan
Member Since:
November 2, 2022

Maigan W.

Principal Attorney
Free Consultation
Get Free Proposal
San Diego, California
2 Yrs Experience
Licensed in CA
California Western School of LaW

Maigan is a registered nurse and attorney with tech law experience, specifically in Web3, including NFTs. Maigan acted as general counsel for a NFT platform for two years and speaks and understands smart contracts. As a registered nurse, Maigan is in a unique position to understand health law issues and graduated with a concentration in health law distinction. Maigan is happy to help you create a business entity, draft and negotiate contracts and agreements, apply for trademarks, draft terms of service and privacy notices, draft terms of sale for NFT drops, draft web3 licenses, and act as a consultant for other attorneys looking for someone who understands web3 and NFTs. Maigan speaks conversational Spanish.

David W. on ContractsCounsel
View David
Member Since:
November 2, 2022

David W.

Attorney
Free Consultation
Get Free Proposal
Texas
7 Yrs Experience
Licensed in TX
South Texas College of Law

Founder David W. Weygandt, the Singing Lawyer, is passionate about helping families and businesses stay in tune with what they care about and avoid conflict. When injustice has been done, David is proud to stand up to the modern Goliath and vindicate your rights on your behalf. David lives and practices law in The Woodlands, Texas, and assists clients all across Texas.

Ben P. on ContractsCounsel
View Ben
Member Since:
November 28, 2022

Ben P.

Partner
Free Consultation
Get Free Proposal
Overland Park, KS
21 Yrs Experience
Licensed in KS, MO, VA
American University, Washington College of Law

Ben Prell is a “business concern” lawyer. Whether a legal issue or concern could develop into a dispute, or already has, he stands ready to advise, assist, and advocate for his clients. Over more than 20 years of practice, Ben has represented clients in all manner of business disputes. He has handled matters that include business ownership and control disputes, non-competition agreements, contract breaches, employment disputes, securities fraud, misappropriation of trade secrets, and intellectual property infringement. Ben provides advice and counsel to businesses regarding litigation and regulatory risk management, compliance with federal regulations, and contract negotiation, revisions and updates. Ben’s recent work includes the successful resolution of cases involving the defense of C-Level executives who became embroiled in larger disputes with their company’s buyers or creditors and the disputed ownership and control of multiple businesses. He has also served as counsel for court-appointed receivers, brought wrongful termination and compensation claims by executives and minority shareholders and addressed securities fraud claims, a partnership claim related to the development of a cellulosic ethanol plant, and a contract dispute involving information technology services. His efforts on behalf of his clients led to his recognition as one of Kansas and Missouri’s Rising Stars by Super Lawyers®.

Find the best lawyer for your project

Browse Lawyers Now

Want to speak to someone?

Get in touch below and we will schedule a time to connect!

Request a call