Software Sale Agreement: Everything You Need to Know
A software sale agreement specifies what you can and cannot do with software programs.3 min read
Updated July 6, 2020:
Software Sale, License, and Development Agreement
A software sale, license, and development agreement specifies consideration received by each of the parties. Typically included in the agreement are the following:
- Purpose and scope of agreement. This includes definitions, such as specifications about the affiliate, acquired assets, documentation, products, and intellectual property rights.
- Sale of acquired assets. This occurs when a party purchases acquired products and documentation.
- Licensure to products. This includes licenses, warranties, and remedies for breach of warranty. It also pertains to engaging applications.
- Development and maintenance of services. If a party needs to hire specific employees, this part of the agreement states this information.
- Future development and maintenance of service. This references updates, releases, or new versions of software. It also includes training and technical services.
- Marketing and quality control. This part of the agreement mentions advertising, promotion, and marketing to potential customers. It also discusses trademark license grants and ownership.
- Financial structure. This section discusses revenue sharing procedures and audits.
- Common terms and condition. This part elaborates on specific terms, such as warranties, indemnification, limitation of liability, force majeure, nondisclosure, rights in data, security, insurance, and termination.
Software Licensing Subscription Agreement
If you ever download, copy, install, or use software, you may need to agree to a software licensing subscription agreement. Always read the document carefully before using the application in any capacity. You cannot access the software until you agree to all of the terms and conditions found in the agreement.
The agreement is a legal document between you, the customer, and the software company. By indicating your assent to the agreement, which you do by signing a sales order or clicking on an "Accept" or "Agree" button, you acknowledge the software licensing subscription agreement.
If you don't agree to the terms of the agreement, you may not do anything with the software. In addition, if you already have possession of the software and don't agree to the terms, you must delete all copies of the software.
Equipment Sales and Software License Agreement
Similarly to a software licensing subscription agreement, an equipment sales and software license agreement has its own list of guidelines. In the agreement, you may find:
- Terms and conditions. This section discusses licenses granted, equipment purchased, and installation requirements.
- Orders. If you place orders, this section specifies if there are invoices and who would send them. It also discusses that if you need to make changes to the orders, both parties must agree upon it and have it in writing.
- Delivery. The vendor must make a reasonable effort to meet delivery dates specified in the order schedule. It also states the carrier and method of shipment for products.
- Charges and payment. You agree to pay fees and charges for the product and orders. Information on when the vendor will invoice you is also included.
- Taxes. If you need to pay or reimburse the vendor for any type of tax, that information is here.
- Products. This includes a limited license for the software and documentation.
- Warranties and remedies. The vendor states that each piece of material is free of defects and provides a timeframe as to how long the warranty covers the items.
- Termination. Either party can terminate the agreement upon written notice if one party breaches the agreement.
Software End-User License Agreement
When it comes to software end-user license agreements, you must accept the terms before use. Most agreements include a mention of the following:
- Specific definitions and related matters. A common word in the agreement is a product, and this can refer to licensed software or documentation.
- License and use restrictions. Some software programs have a limited, nonexclusive, nontransferable license that you can only use with specific documentation. You might have a limited number of copies you can make of the software. Some companies only allow a backup copy for archival purposes.
- Warranties and liability limitations. Some licensed software programs do not come with a warranty and come as-is. The company might only offer a cap on liability payout amounts if it involves the software application.
- Miscellaneous. This section includes a wide range of topics, including how the company deals with communication, how it addresses the laws of the state it operates out of, how force majeure affects liability, and how it deals with third-party beneficiaries.
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