A EULA agreement, also known as an end-user license agreement, is an agreement between a software creator and a software buyer. A EULA is a form of intellectual property protection.

What Is a EULA?

Software creators make their creations available in many forms. Whether an individual or company downloads, purchases, or installs software on their computer or other device, that software is protected by an end-user license agreement. Under an EULA, the party that obtains the software cannot resell it or distribute it in any way that benefits the buyer but not the original creator.

Many people have signed or agreed to the terms and conditions of an end-user license agreement but probably didn't read what they were agreeing to. Software is a form of intellectual property (IP) because it is created by a software developer. End-user license agreements encourage further developments by protecting the IP rights of creators.

End-user license agreements go by several different names including:

  • User agreement
  • Software License Agreement
  • License Agreement
  • Browse-Wrap Agreement
  • Click-Wrap License
  • Shrink-Wrap License
  • EULA
  • Licensed Application End-User Agreement

EULA in Practice

When purchasing apps on a smartphone, you are likely to come across a EULA. Usually, you'll be required to accept the agreement before installing the app. Even though these agreements are frequently filled with legal language that many don't have the patience to read through, they are fairly straight-forward. If you purchase the app, you may use it according to its purpose, but you may not copy it or redistribute it for your personal gain.

Unlike written contracts, most end-user license agreements are "signed" electronically with the click of a button that says, "I agree." Some apps and other types of software don't require the buyer to click a button, but the opening and use of the software assumes agreement.

EULA Terms and Conditions

An end-user license agreement doesn't only cover the resale or copying of the software but also how it is used. Sometimes a liability of limitation clause is included in case the product causes harm to the computer or device on which it is downloaded. If an EULA is agreed to and it includes a liability of limitation clause, the software buyer cannot sue the creator if the program causes their computer to crash.

Even though it isn't fun reading through paragraphs of legalese, it is a good idea to make sure you always know what you're agreeing to. You may be agreeing with terms and conditions that are actually quite unfair if something should go wrong.

Why Use a EULA?

When customers download a software developer's work, they are basically copying that work onto their personal device or computer. If a developer wants to maintain control of their IP and how it is used, they'll want to include an EULA in the purchasing process.

Usually, end-user license agreements are required before the program is paid for, that way, if the customer disagrees, there's no harm done.

Certain companies include end-user license agreements with their software products to help maintain their company's image. If they want to keep a family-friendly reputation, the agreement might include a clause that dictates how the product can be used. Certain material may not be allowed to be put into the program or app.

These types of user agreements are especially common with social media apps. However, as a user of such apps, be careful to know what you're signing away rights to when clicking "I agree" after the user agreement.

What Should Be Included in a EULA?

End-user license agreements should be clear and detailed to be sure that all bases are covered. It should be stated that the buyer is receiving a non-transferable, non-exclusive, revocable, limited license with their software purchase. Basically, the program cannot be re-distributed for profit, but it may be used by the customer.

Any particular terms that the owner wants the users of their software to follow should be included and well-outlined in the agreement. Sometimes an EULA is only seen once while the purchase is being processed and the buyer cannot return to it for review later. This means that buyers should read EULAs carefully and creators of such agreements should make sure they get their most important points across clearly if they want their customers to understand what they're agreeing to.

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