What is an End User License Agreement (EULA)?
An End User License Agreement or EULA is a contract for the use of computer software formed between the licensor (the software company) and the purchaser of the software. Historically, EULA’s were first known as “shrink-wrap licenses” due to the way software was mostly packaged in the past.
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The EULA from the manufacturer was typically a sticker affixed to the shrink-wrap itself, and removal of the shrink-wrap constituted an agreement of the terms of the license agreement. The shrink-wrap license has evolved into “click wrap licenses” since most software companies make you click to agree to their terms before you can use the software.
How Does An End User License Protect Me?
For the most part, software companies use EULA’s to limit their liability against misuse of their product or misuse of their copyrights.
Courts have routinely held that electronic End User License Agreements are valid contracts. The problem is that many license agreements are too long and therefore not read by the end user. An example of this is the 56 page licensing agreement by iTunes as well as other outrageously long agreements that are not read and often ridiculed.
Of the cases that have been litigated, the courts limited the decisions to specific terms or provisions; therefore, a concise agreement dealing with specific contractual terms will be the most effective because any ambiguities will be construed against the writer of the agreement.
Important Topics Covered In The Agreement
Initially, the user and reader of a license agreement should be made aware that the agreement they are reading is a binding contract and if the buyer does not agree with the terms, they should not install the program.
Secondly, the agreement should cover which licenses and warranties are allowed under the agreement and defining the uses of the software. Thirdly, any warranties and remedies from the use or misuse of the software should be addresses in plain language. Fourthly, the license term should be stated and adding that if the user wishes to terminate the license, the software should be destroyed.
Lastly, the license agreement should contain provisions regarding a limitation of damages and any support services offered by the software manufacturer. If the licensor is offering any support services, it is best to be plainly spelled out in the agreement as well as any software updates available to the purchaser of the software.
In order to protect your intellectual property you will need an end user license agreement that is enforceable and informative and at the very least, read by the user.