why eula is necessary?
Anyone who has installed computer software added an app to their mobile phone, or subscribed to an online software service will be familiar with an end-user license agreement or EULA. EULAs help to protect the intellectual property rights of software developers. Still, they often contain many other provisions to strengthen the publisher’s legal position and discourage licensees from taking action against them.
An end-user license agreement grants a person or organization the right to use a software application. Typically, EULAs set forth other terms and conditions, but their primary purpose is to protect the software developer's intellectual property rights. It's often essential, though, that various other contingencies be addressed to provide further legal protections for the publisher.
Many EULAs specify how a software application can be used. For example, some applications may be licensed for non-commercial use at no cost. In contrast, commercial businesses must pay a licensing fee based on the number of users, the volume of records processed, or even the size of the business. Most EULAs contain provisions that prohibit end users from distributing the software in ways that might be detrimental to the developer. Some even include provisions prohibiting end users from openly criticizing the software or the company that produced it.
EULAs may take different formats, from signed paper contracts to the so-called "click-through agreements" or "shrink-wrap licenses" that pop up during a typical software installation process. Most of us are more familiar with the latter format, which is presented as a "take it or leave it" proposition, leaving the user free to accept the agreement (if they want to use the software) or reject it (in which case, they cannot continue the installation).
Most EULAs include some basic provisions such as a description of the software application, clarification of ownership (including any content created by the end-user), a disclaimer of warranty and limitations on liability, the method by which any updates to the application will be delivered, support and maintenance fees, and policies regarding cancellations and refunds.
Here are some of the clauses that software owners should consider including in their end-user license agreements.
Grant of license: This clause addresses the primary purpose of the EULA, granting the user the right to use the application.
Copyright infringement: Software publishers should always include a statement in their EULAs asserting copyright ownership and making it clear that users who violate the copyright may be held liable.
Restrictions on usage: Many software developers include provisions prohibiting the user from making copies or distributing the software to anyone other than the licensee. Many EULAs explicitly prohibit reverse-engineering the software. Some companies have even added clauses restricting users’ right to publish benchmark tests or critical reviews.
Warranty disclaimer: Software is complex and is typically dependent on other software, such as operating systems or databases. As such, it’s strongly advisable to disclaim any warranty, such that the developer cannot be held responsible for making changes if the user has problems with the application.
Limitation of liability: This clause stipulates that the software company is not responsible for any damages resulting from using the software.
EULAs emerged as a widespread phenomenon with the advent of personal computers in the 1980s and 90s. Several characteristics of computer software made it especially well-suited to this approach. Those factors remain important today.
First, the software is easily copied and distributed. Although technology companies have developed sophisticated anti-piracy methods, there remains a legitimate concern that users may use the software in ways that go against the developer's interests.
Second, the software is complex and highly interdependent with other systems. Disclaimer of warranty and limitation of liability is therefore critically important in protecting software publishers from responsibility for conditions that may be outside of their control.
In the case of content-oriented applications such as mobile video-sharing platforms or social media, software developers also wish to maintain some control over how their technology is used. EULAs provide a means of restricting activity and content that could otherwise paint the software developer in a negative light.
Unfortunately, there is still some debate as to whether EULAs are enforceable. Several courts have upheld their validity, – including the landmark ProCD, Inc. v. Zeidenberg case of 1996, in which the US 7th Circuit Court of Appeals determined that a click-through license was enforceable. However, others have argued that although click-through EULAs help protect the intellectual property rights of software developers, many provisions may not be legally binding. Restrictions on copying software, for example, may conflict with US law (US 17 USC 117) granting users the right to duplicate software for backup purposes.
Given the wide range of provisions in software license agreements, it’s no surprise that court challenges have continued over the years, and EULAs continue to evolve as case law establishes new precedents.
Software technology continues to evolve as publishers have shifted from so-called perpetual licenses to software-as-a-service (SaaS) business models. New pricing paradigms have emerged, providing flexibility in how technology services are purchased and used.
The specific terms in a EULA may vary greatly, depending on how an application, website, or mobile app is used. Some may place strict limitations on content, for example. Others may apply volume restrictions, limiting users to a specific number of records or transactions unless they pay additional fees to move to a higher usage tier.
Given the complexity of the technology industry and the evolving body of case law surrounding software licensing, it’s highly recommended that software vendors retain qualified legal counsel to help them craft a EULA that protects their intellectual property and guards against any other contingencies.
Growing businesses must grapple with a myriad of different agreements and contracts. As a result, EULAs have a unique place in that domain. As such, it’s essential that software developers understand the key elements of a EULA, craft suitable end-user license agreements for their organization, and keep track of the people and organizations with whom such agreements are in effect.
Generally, the EULA will help you to set the conditions of your license agreement with the user – explain what they are and aren't allowed to do with the software, the conditions under which their access might be limited or terminated, copyright provisions etc.
An end-user license agreement is a license that gives the user the right to use an application. It details how the software application can be used, as well as explains any restrictions. Most end-user license agreements, for example, prohibit the end user from sharing or distributing the software in any way that benefits the buyer rather than the original creator.
Before you can download and install any type of software application, you usually are required to read and agree to a user license. Once the user opens the software installer, the EULA typically must be signed digitally or the installation cannot be completed.
EULAs are not legally binding . When a consumer agrees to the terms specified in the license agreement, they are actually renting or purchasing a license from the vendor. The downside of a license agreement is that it doesn't protect the consumer. The EULA protects only the copyright owner. In fact, not only does the vendor own the license, but they also legally own any private data that the consumer entered into the software. These software owners can access, read, or share this private consumer data in any way they want.
The end-user license agreement goes by a number of different names, including:
There are some clauses that software owners should include in every EULA. They address the granting of licenses, infringement information, restrictions on how the application can be used, termination of licensing, and other limitations and disclaimers for the warranties and liability. The clauses include:
The primary purpose of an end-user license agreement is to give the buyer or user the right to use the application. For this reason, every EULA should include a section that specifically states that a license is being granted.
An end user could potentially use an app in different ways, including illegal means. You should include a section that states restrictions on how it can be used. Usually, you'll see restrictions on things like copying the license into multiple devices, using it to break laws, or on reverse engineering the software to reproduce it. It's important to always include a Restrictions of Use clause so you can limit the actions other people can take using your software application.
Infringement issues are common when you're dealing with software. For this reason, you should always include a section in your licensing agreement that states what will happen if a user commits copyright infringement. While this section can be brief, it should include specific language that makes it really clear to the user that if copyright infringement takes place, the user will be held liable for any legal issues that arise.
In the event of restriction violations or other issues, the software owner should keep the right to terminate the license. The Termination of Licensing clause is usually absolute, granting strong rights to the licensor of the app rather than the user or buyer.
A disclaimer of warranties is an extremely important clause in any licensing agreement. It essentially states that the app is available as it is and that the developer or owner isn't responsible for making any changes or improvements to better meet the needs or desires of the end user.
In this clause, the licensor states that they aren't responsible for any damages that could occur as a result of the app. It's an important clause to include in order to protect the licensor or provider from liability. For example, if someone installs an app on their mobile device and the phone malfunctions as a result, the owner cannot pursue liability from the provider for reparations for the phone that is damaged, even if the app did, in fact, cause the malfunction.
While a licensing agreement will vary from one product to the next, they should always include some basic components, including:
When a customer downloads your software, they're essentially copying your work onto their computer or personal device. If you want to maintain any control over how it's used, you should include an EULA in the purchasing or downloading process. If the app or software has to be purchased by the user, they are typically required to agree to the EULA before paying, which means that there is no harm done if the user doesn't agree to the licensing agreement.
Some companies include licensing agreements to maintain control of their image. They may include a clause that states specifically how the software can be used or what material can be put into the app. Licensing agreements are particularly common with mobile apps and social media.
A EULA (End User License Agreement) is a legal agreement between the software developer and the end user of a software product. It outlines the terms and conditions under which the software can be used, as well as any restrictions on the use of the software.
To create a EULA, you can either hire a lawyer or use an EULA generator. An EULA generator is an online tool that allows you to create a EULA quickly and easily without the need for a lawyer.
When choosing an EULA generator, it’s important to choose one that is reliable and trustworthy. Look for an EULA generator that:
Here’s a sample EULA template created with iubenda Terms and Conditions Generator:
Click on the button below to open the full agreement: