Software EULA: Everything You Need to Know
A software EULA is a legal contract in place between the developer and/or publisher of a piece of software and the person or entity that uses the application.3 min read
A software EULA, End User License Agreement, is a legal contract in place between the developer and/or publisher of a piece of software and the person or entity that uses the application (end user). The agreement between the developer and the user gives the user the right to use the product under certain terms, conditions, and limitations. In order to be able to use the product, the user must agree to the EULA.
How to Agree to an EULA
There are several ways in which the user can agree to the EULA, and this depends mostly on the way the product is distributed.
- Some software is distributed within books or envelopes. Often, you agree to the EULA simply by opening the envelope or the shrink wrap. Some people take issue with these, as someone is forced to agree to the EULA before being able to read it, as it is generally contained in the package.
- The user can mail an agreement form or card to the developer indicating they accept the terms.
- The user can click on the acceptance form on their computer. Or, in most cases, the "install" button is inactive until the user checks a box indicating they have read the EULA agreement and agree to the conditions. As long as they are designed correctly, online agreements such as this are legally enforceable.
Advantages of an EULA
If you are a developer, there are many reasons why it is important to include an EULA agreement with your software. This is the case for either traditional desktop software or mobile apps, as mobile apps also include these legal agreements. The main advantages of including an EULA agreement are:
- The EULA gives the user a license to use the product but does not actually sell the software to the user. This allows you to dictate the terms of the use of the product, including distribution.
- The legal agreement restricts the way people can use your app to prevent people from using your software in an undesirable or illegal way. Common restrictions include spamming, illegal activity, and hacking.
- The limitations of the EULA go both ways. As you can limit the legal usage of the software, you also limit your liability. This is an important consideration. Without setting up this liability limitation, your business may be vulnerable to lawsuits, which waste time and money.
- A "disclaimer of warranties" clause in the EULA spells out to the user that the app is available "as is." That way, if a user has unreasonable expectations, such as 100% uptime, the EULA will prevent you from bearing responsibility for any faults of the app.
- You maintain your rights to revoke the license given or discontinue the software at any time without any repercussions. If it has been determined that a user has used a software or app in a way that is against the EULA agreement, the developer or distributor can revoke the license of the software to that user.
Creating an EULA
EULAs can be individualized to each individual software application and can include details on the rights the end user has to use the product. Usual components include granting a license, limitations on the use of the product, notice of copyright, and a limited warranty. There may also be details on how the software can, and can't, be used.
EULAs began as very short and simple scripts, and have developed over time into long agreements that most users don't actually bother to read. At first, an EULA would contain a warning against copying or distributing the software, and sometimes information about warranties. Today, they are much more complex.
In 2000, the Uniform Computer Information Transactions Act (UCITA) was adopted in the United States police code for licenses and other computer transactions. Since this time, developers and distributors have been adding more lengthy and more restrictive code to the EULA than was previously seen.
Problems With EULAs
There are many people who take issue with how restrictive EULAs have become. However, there is a lot of software, particularly commercial-use software, in which there are few alternatives. In order to use the product, the EULA must be accepted. Even if the EULA is difficult to understand or grants the developer intrusive powers on the user's device, the user must agree if they wish to use the product.
If you need help with software EULAs, you can post your job 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, Menlo Ventures, and Airbnb.