End User License Agreement (EULA)

What is an End User License Agreement?

An End User License Agreement (EULA) is a contract that is in place between the software's user and developer, specifying how the customer is allowed to use the product. Often, EULA is simply called "software license" by developers and publishers. The contract is in place from the time the end user "accepts" the terms of agreement for a fixed-term usage right or lifetime license of the software. When the user does not agree with the terms, the download or installation is aborted, and the contract is not valid.

End-user agreements are usually displayed in a pop-up window before installing a software product. The EULA is in place to protect the software developer from liability lawsuits related to their product, limiting their accountability for dama. The contract between the software developer and the user is signed based on the "Proxima Nova Rg Regular", Helvetica Neue, Helvetica, Arial, sans-serif;">Electronic Signatures in Global and International Commerce Act< of 2000, a federal legislation.

End User License Agreement: What is it?

The End User License Agreement is not a terms-and-conditions clause, as it is simply focused on the limitations of usage and liability of the company. An EULA generally contains different standard clauses, such as:

• License granting

• Restrictions of use

• Related agreements

• Infringement information

• Termination of licensing

• Limitations and warranties

• Limitations of liability

All the above clauses clearly define what the user is allowed and prohibited to do. The EULA governs the customer's use of the downloaded for free or purchased. The end user does not acquire ownership to the software; he simply gains usage rights provided by the developer.

Why is End User License Agreement Important?

The End User License Agreement is important for software developers to limit their liabilities and ensure that users are aware of what they are allowed to do with the software, and what is prohibited. It grants the license to the users, so they have the right to make use of the software, provided that they adhere to the terms and conditions, as well as the limitations of the EULA.

The software license agreement covers product warranties and highlights the main limitations of use, such as the prohibition of

• Transferring the license

• Making copies

• Renting out the software to third parties

• Leasing the software to third parties

• Lending, selling, or redistributing the license to another user without the permission of the developers

• Reverse engineering, repurposing, or decompiling the software

Examples: Using End User License Agreement

While End User License Agreements can look the same, it is important to read them. Software users will have to know whether there is a restriction attached to the license and that they might prevent the downloading of additional software. According to PC Mag, people who do not read the agreements risk getting spyware on their computer or mobile device without knowing about it.

Using an EULA is also important for companies to protect their copyrights and software. In a 2001 federal court ruling, Adobe found that - because of the wording of its ELUA end users had the right to sell individual components of the downloaded software. Further, the End User Software License Agreement protects both parties in case the program is not used as intended by the author and user.

Examples: Not Using End User License Agreement

End User License Agreements are generally attached to software applications that can be downloaded from the internet. The Electronic Frontier Foundation claims that EULAs are more similar to electronic mandates than contracts, as users do not have a choice to accept, reject, or negotiate the terms of download.

Some of the aspects of the license agreement are already covered and governed by the terms and conditions and general federal or international copyright legislation. Therefore, there might be an overlap between different documents and rules that apply to the end user and software developer.

End User License Agreements are not applicable to the sale of software that was developed for a specific company or customer, and is not used by other parties.

Frequently Asked Questions

• Do I need to read the EULA every time I download a software product?

It is recommended that you read the agreement in order to ensure that you are aware of what you can do with the software.You also can prevent downloads of not-requested additional software by reading through the text.

• What are the common prohibitions of end user license agreements?

Generally, you are not allowed to distribute, sell, reverse engineer, modify, or repurpose the software.

• Are EULAs legally binding?

Based on the eSign act of 2000, clicking the "Accept" button before downloading a software product is acceptance of the contract terms.

• What is a shrink-wrap software agreement?

It refers to the pop-up window that appears before software is downloaded from the internet. Its basis is that End User License Agreements before the internet used to be packaged with the software CD. Shrink-wrap license is also called click-wrap license.

• Can I refuse the EULA?

You can click the "decline" button, however, this will result in the termination of the download. However, if the software package includes additional programs you do not want to download, you can untick these before you click "agree," and you will still be able to use the main software.

• Do End User License Agreements provide warranties and damages?

Most licenses restrict damages claims and limit warranties. As all developers' agreements are different, it is important to read the "small print."

Steps to Create an End User License Agreement

• Examine what the intended use of the software is.

• Consult with an intellectual property attorney.

• Include the following clauses: license granting, restrictions of use, related agreements and governing laws, infringement information, termination of licensing, disclaimers and warranties, limitations and liability.

• Create an EULA and implement it on your download page.

• Test your EULA.

• Review further legal agreements and terms on your website, consulting with a software licensing professional.

Common Mistakes

• The most common mistake of end users is that they fail to read the agreement and click automatically on the "Accept" button. This is often referred to as the "click-through aspect"

• Companies often use templates for creating their EULA, instead of consulting with an intellectual property rights lawyer. As a result, they might fail to protect their development internationally, and limit the restrictions for certain types of users.

• End-user software licenses are generally too long to read and have language that is hard to understand for most customers. Making sure that the principles are clearly communicated is essential.

Do you need help with End User License Agreements? See UpCounsel's End User License Agreement resources to find the answers. UpCounsel's intellectual rights attorneys are hand-picked from Yale and Harvard and are able to deal with any software-related queries.