How to create a Software End User Licence Agreement

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What is a Software End User Licence Agreement?

A software end user licence agreement is a legally binding contract commonly entered into by a software developer or retailer and the user of the software. The most common example of a software end user licence agreement in daily practice can be seen in digital form as a click-through contract presented in a pop-up window which users must accept before accessing the software, for example on social media or apps. Typically, this form is a requisite for obtaining rights to the software, meaning the user must read and digitally sign this user licence before installation can be completed. Essentially, this contract outlines important basic information concerning the application such as how the software can be used, where it will be stored on your computer, and any restrictions such as distribution bans that may be applicable to the software. 

Who drafts a Software End User Licence Agreement?

Software end user licence agreements are typically drafted by the company or party providing the software in question. It is important to note, however, that these agreements are not legally binding and do not protect the consumer. Instead, when the consumer digitally signs and agrees to the contract, the copyright owner or vendor of the software is protected and can legally access private data that the consumer enters into the software thereafter. 

Who needs a Software End User Licence Agreement? 

These agreements are extremely important for all companies or vendors that sell software. When a consumer downloads your software, they are essentially transferring your service and work onto their personal computer, phone or any other device. From an intellectual property point of view, it is therefore necessary for you, as the owner of this software, to maintain control over how it is used through issuing an end user licence agreement. Software end user licence agreements may also be a useful tool in maintaining your company’s public image and reputation by including express clauses which purport exactly how the software can be used or what type of material can be put into the app. Similarly, your clauses can also control what type of materials cannot be put into the app and other prohibited uses. Most importantly, an end user licence agreement protects the licensor of the app or software from copyright infringement and other forms of misuse. It is therefore important to ensure that your agreement is tailored to the type of services your company provides to consumers. 

What to include in a Software End User Licence Agreement

Below are the most common clauses to include within an end user licence agreement.

Licence granting – This clause grants the consumer or buyer of software the right to use the application legally.

Restrictions for use – This clause prohibits the consumer of the company’s software from using the app in specific ways. Typically, companies will place restrictions for use on activities like copying the licence into multiple devices, copying the copyrighted material itself by reverse engineering the software, or using it to break laws.  

Copyright InfringementAs previously mentioned, copyright infringement issues are important to address when implementing software end user licence agreements. Your agreement should therefore always include a copyright infringement clause which outlines the consequences of committing copyright infringement and any liabilities that may be incurred by the consumer.

Limitations of Liability – As the name of this clause suggests, this section of the contract limits the vendor’s liability for any damages that may be incurred as a result of using the app, thus, protecting the licensor from being brought certain claims. For example, if a consumer finds that their device begins to malfunction after downloading and installing your company’s software, this clause will prevent the consumer from being able to pursue a claim against the company for reparations. 

Warranty Disclaimer – This clause purports that the company or developer of the software is not responsible for making changes or improvements to the application in order to meet the needs of its consumers. 

Conclusion

Software End User Licence Agreements are quintessential for any software developer company distributing their application. Ensure your company crafts a well-tailored contract in order to protect itself from misuse and copyright infringement. 

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