Software End User License Agreements

Quick. Which of the following terms does not refer to a type of End User License Agreement?

1. Click Wrap
2. Browse Wrap
3. Saran Wrap
4. Shrink Wrap

That’s right, while (so far) there is no such thing as a Saran Wrap Agreement, the other three phrases are commonly used to describe License Agreements that are presented to the End User in different manners.

While it is outside the scope of this blog post to explain the difference between these types of Agreements (maybe a future post), when drafting EULAs, it is important to know how the Agreement will be presented to the End User. Will the end user receive a box of software? Will the end user have to accept the license online? Will their acceptance be assumed by virtue of their use of the technology online?

There are a number of cases that discuss what is appropriate in each case. Suffice it to say, this is an important preliminary decision when drafting EULAs.

Beyond this consideration, you should ensure that your EULA also discusses the following (not an exhaustive list):

License Grants
Is there a trial version? Is this version limited?
Can the commercial version be installed on various computers?
Will the software developer have the ability to audit the purchaser to determine compliance with the license terms?

License Restrictions
What restrictions will the license have?
Clearly you do not want the purchaser to be able to alter, adapt or decompile the software. However, will you permit the purchaser to transfer ownership of the license upon a sale of a business?

Support and Maintenance
Will there be a warranty period? What versions/updates will be supported? Only minor releases?

Other than any warranty provided, typically the software developer will disclaim all other warranties.

It is very important for the software developer to maintain all rights to the software, including rights to modifications, derivative works, improvements, etc.

Third Party Software
Does the software contain any third party or open source software that are subject to third party licenses?