An end user license agreement, or EULA, (often referred to as a software license) is a contract that exists between the licensor of a piece of software and the buyer, which spells out the buyer’s rights to the use of software. It provides the buyer rights to the use of the software, provided that it is used in accordance with the licensors specifications. Today, it is customary for software to be downloaded from the internet, so the EULA is generally an online document that the user reads and then clicks on a box to accept the terms, as opposed to the days in which software was purchased in physical form and installed manually. This generally required the agreement to be mailed into the licensor after purchase. The latter is referred to as a click-wrap license, while the former is considered a shrink-wrap license.

Things to Consider

It is worth noting that end user license agreements are not legally binding. Rather, it is simply an agreement between the licensor and the buyer that the software will be used in the manner set forth by the licensor. Additionally, a EULA does not protect the buyer against fraud, as it is not intended to be a warranty, but rather it is designed to protect the licensor against issues of copyright infringement, such as making copies of the software.

Additionally, software purchasers should be aware that the licensor maintains ownership of the license; generally, the buyer is actually renting or leasing the software. Particularly in cases of software that is downloaded from the internet, the licensor may have access to any and all data that is entered using their software. This means that the vendor can potentially read it, share or sell it, at any time.

Click-wrap License

As click-wrap licenses are the most commonplace these days, it is important to note that if, for some reason, you should choose to not accept the terms and conditions of the contract, the licensor will not complete the download of the software. This method of EULA obviously removes any possibility of negotiating the terms and conditions.

Terms of Use for a Mobile App

As we are all doing more and more on our cell phones, and much of the same products can now be downloaded from app stores, it raises the question as to the difference between an end user license agreement and the terms of use for a mobile app. (Which, we have all seen and agreed to, at various points.)

Generally, while a EULA is really only concerned with issues of copyrights and proper use of the software, the terms of use may place further restrictions on the user, regarding behavior. For example, many dating apps have language in their terms of use regarding the use of abusive or otherwise inappropriate language. Should a user be reported, the app may reserve the right to freeze or cancel that users account. FaceBook has policies in place in their terms of use regarding posting content that is abusive or violent and reserves the right to remove that content, when reported.

Which One to Use

If you are a software or app developer, you may have questions regarding which one, an end user license agreement or terms of use for a mobile app, is the best one for your company to use.

  • If your program is one in which users engage with one another, you may want to consider the terms of use, as you can address acceptable versus unacceptable behavior.
  • Both can provide language regarding making unauthorized copies of your program.
  • If your program is one that is designed to communicate with a server (like a social media app, as opposed to possibly a word processing program), then you should consider utilizing the terms of use.
  • If you have designed a mobile app, where will it be sold? If it’s an Apple app, the App Store provides terms of use agreements for those vendors that do not have one created specifically for them. Google, however, does not. If you hoping to have your app available across all mobile platforms, you are better drafting your own terms of use to be used with all of them.

Some companies choose to create both a terms of use and an end user license agreement. Should you not want to deal with creating two separate documents, as well-written terms of use agreement that includes language regarding copyrights and trademarks, should meet your needs.

If you need help with end user license agreements, you can post your legal need on UpCounsel’s marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Stripe, and Twilio.