EULA - Yeah - the License Agreement You Never Saw!

The end user is only permitted to use it as long as certain terms are respected, and is also prohibited from any alterations or uses of the software without the specific consent of its rightful owner, the software company/developer.

End User License Agreements can be presented in two forms.

1. Shrink-wrap license: Usually utilized in the case of packaged products, when a label clearly states that tearing-open the package or breaking the seal automatically means that the buyer/user accepts the EULA found inside the package, even before reading it.

2. Click-wrap/ click-through license: Available to the user while installing the software. In order to continue the installation of the respective software, the user must check an “I Agree” box.

Characteristics:
As mentioned before, most software license agreements are similar. They share similar terminology, as well as similar structures. Following are the most important four parts of a EULA:

Licensing – Here in, you establish the rights that you wish to grant to the users over your product. It is of highest significance to make it clear that the users do not have any intellectual rights over the software about to be installed/ used, but that you are only licensing it for use according to your terms, to which the user may or may not agree, at their own discretion.

You should specify that any attempt to re-engineer, redistribute, copy, clone, modify or alter in any way the licensed software without your specific approval is strictly prohibited or permitted under certain, and well-defined conditions. You should also make specifications as to how many terminals/computers can benefit from this license (one or more).

Warranties — Tag in a ‘Disclaimer of Warranty’, which says that even if the software is most likely to work on the user’s machine, it may as well not, and it may not even be your fault. After all, should the product be exposed to, for example, atmospheric conditions that might alter the CD’s / DVD’s performances, you should not be held responsible for that.

Liability — It is important to state the extent to which you can be held financially responsible for any mishaps that might incur as a result to the use of your software. Create a ‘Limitation of Liability’ section, in which you will state clearly to what amount (if any) a user is entitled should your software damage the computer or cause legal problems by interfering with other third-party applications.

Laws – Do not forget to mention specifically what laws control or apply to the license agreement that the user is supposed to agree to. A jurisdiction must be defined and any complaints or lawsuits can only be made or filed within the respective jurisdiction. If your software is supposed to have global distribution, make sure you find out which international laws apply to the EULA. Keep in mind that, even if the EULA pattern is nearly the same in most cases, yours should reflect your needs and your idea, your approach to the market and to the prospective users.

Some of the benefits of end user license agreements

When it comes to software and your rights on a product in which you have invested time, financial resources and significant human effort, license agreements are not to be taken flippantly. Whether shrink-wrap licenses or click-through licenses, their importance is indisputable.

They clearly establish your property rights on the software

- They protect your company’s intellectual rights over the software

- They protect you from lawsuits filed against you on the basis of terms that have not been read

- They exempt you from any responsibility on malfunctioning software if your terms have not been respected

When writing your EULA, you should keep some points in mind

- Design the software installation in such a way that the user must agree to the EULA before the software is installed on his/her system.

- Plan your document. Make yourself a list of all points that need to be addressed.

- Use a readable typeface, like Times New Roman.

- Divide your document into sections, and the sections into smaller segments if necessary.

- Do not use any slang, and omit needless words.

- Use the active voice, avoid the passive voice.

- Simplify wordy phrases.

- Organize your content in order of importance.

- Use numerals instead of written words for numbers.

- Check for grammar and spelling errors! Check for punctuation! There is no substitute for correct English grammar and spelling, and mistakes could cause confusion or even nullify your EULA.

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