What is a EULA?
An End User License Agreement (EULA) is a contract between two parties (the licensor and the licensee) for the right to use proprietary software. One party purchases, installs, or downloads software, and the other party acts as a provider of that software. The licensor or vendor is often an individual or software company who created the software. The licensee is the user who pays a fee to use, download, or install a copy of the software. As a result, EULAs define the scope of how the software can be used. They are also known as End-Use License Agreement, Licence Agreement, Software License Agreement and Licensed Application End-User Agreement
What businesses should have a License Agreement?
Businesses that provide customers with a license to use proprietary software should consider having an EULA. This would include SaaS developers, software developers and mobile app developers.
An EULA is important for software developers because when someone installs, downloads, or uses a copy of your software application on their computer or mobile device, they are, in essence, making a copy of the copyrighted software.
If you have created websites, mobile application, software applications or computer programs, you may benefit from creating a license agreement for your users to agree to before using your software. It is different from that of a Terms and conditions of use agreement on your website which addresses a number of topics.
What to Include in an EULA
- Who created the software program (i.e. licensor) and who wants to use it (i.e. licensee)
- What software program is licensed and subjected to the EULA
- Additionally, Where disputes will be resolved if there is a problem with the software or agreement
- When the user becomes bound to the terms of the license, either upon opening the package seal, registration, installation, or acceptance of the EULA
- How the software can be used and any rights the user has to the software application
- Whether the licensee can install the software on more than one computer (i.e. site license)
Common Clauses for Software License Agreement
- License Granting
- The primary purpose of an EULA is to grant a license of use for an app to an end user.
- Restrictions on Use
- Since a user can use the app in various ways, a section spelling out restrictions on the use of the license is another key part of an EULA.
- Copyright Infringement/Intellectual Property
- Infringement issues are very common because of the nature of the software programmes and therefore it is important to work to avoid. You should always include a section in your EULA that deals with what will happen in the event of copyright infringement.
- Termination of Licensing
- Additionally, It’s important for the software developer to the keep rights to terminate the license in the event of violations of use or other issues.
- Limitations of Liability
- This clause allows the licensor to set limits for his liability. The licensor will not be responsible for any damages that arise out of the use of the application.
FAQs
An EULA is not legally required. However, they are important agreements for software and app developers to have for a number of reasons.
An EULA is more narrow in scope and deals exclusively with the terms of granting a license. You will typically only find an EULA with businesses that deal in software, SaaS or mobile apps.
However, a Terms and Conditions agreement is more broad in scope and will address a wider range of topics such as the use of a website, payment processing, general copyrights and user-generated content.
Add a link to your EULA in your main website’s footer. Users know to look here for important legal information such as an EULA.
A Privacy Policy is not only the legally required document to disclose your practices on protecting personal information, but it’s also a great way to show users that you can be trusted, and that you have procedures in place to handle their personal information with care.