What is a EULA?
The acronym, EULA, stands for End-User License Agreement, and is also sometimes referred to as a software license agreement.
An End-User License Agreement is a contract that allows a user to purchase the rights to use a software application from its publisher.
The parties in a EULA are:
- Vendor: Also known as a licensor, publisher, or author of the software, the vendor sells the rights to use their software to a user.
- Licensee: Also known as the purchaser, the licensee is the user who purchases the rights to use the vendor’s software.
A EULA is similar to a rental agreement where, rather than renting property or physical goods, the licensee pays to use the software in the manner stipulated in the contract. This means the user complies with any and all restrictions stated in the EULA by the software author or publisher. These restrictions can include a time limit of use (e.g. a subscription), a limited number of downloads (e.g. installation on 5 computers or other electronic devices), and more.
It’s commonly seen as a popup after you’ve downloaded a new computer program or completed a recent operating system update. Some software might be sold with a physical EULA enclosed that comes into effect once the seal is broken or the software is downloaded.
When is an End-User License Agreement accepted?
How a EULA is accepted depends on the scenario and how the EULA is delivered.
For instance, if you’re downloading software from the internet, the EULA is delivered electronically.
Alternately, if you’re purchasing a physical copy of software (on a CD, for instance) from an electronics store, the EULA can appear in the box in the form of a paper document or manual.
It can be accepted in a variety of ways:
- Upon execution of the agreement: after the vendor and the licensee have signed the contract
- On opening the package seal: when the purchaser opens the sealed shipping package
- On registration: when the software is registered, usually via mail-in confirmation or registering a product key online
- On installation: when the user installs the software, often a digital EULA pops up prior to completing the install
How do I write a EULA?
An End-User License Agreement normally includes:
- Vendor details (name and address)
- Software title
- License terms (terms of use, restrictions, and maintenance and support details, if applicable)
- A refund policy (if applicable)
In some cases, the purchaser’s details are included in the agreement, but this is usually only the case for physical EULAs that are accepted upon execution rather than accepted on delivery (because the purchaser has to be present with the vendor to sign). This is sometimes seen in cases where the purchaser/licensee is a large organization, e.g. a large marketing firm purchasing 50 licenses for Adobe Creative Suite for their design team.
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