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What You Need to Know About EULA License Agreements

man on laptop trying to figure out what an EULA is

Not so long ago, most purchases were made in-person, at physical retail locations and other specific places of sale. Nowadays, an increasing amount of purchases are made online. These sales transactions often concern physical goods, such as groceries, clothing and business supplies. Online sales transactions are also often linked to services. From editing to test prep, housekeeping to car repair, an increasing number of service-related purchases are made online. However, there is also a third category of purchases that regularly impacts the ways in which Americans live their personal lives and conduct business. Purchase of software and other intangible assets online now occurs at a staggering rate. The purchase of software and other purely electronic assets is subject to unique rules and regulations, simply because this third category of online purchasing power is a unique entity. Unlike a good you can touch or a service you can witness or experience, software and other intangible electronic assets are intellectual property devised from code. Accessing, using, storing, protecting and disposing of this new category of property is a reality that is evolving as quickly as technology is. It is therefore unsurprising perhaps, that the regulations governing software and similar electronic property is subject to regulation that is evolving rapidly too.

What is an End User License Agreement?

An end user license agreement is used during the purchase of software from a licensor. In a nutshell, this legal agreement outlines the purchaser’s rights to the use of the software in question. This document is commonly referred to as a software license. It is important to note that EULA agreements often do not give the buyer of software products rights to use software in any way that a purchaser sees fit. There are often terms and conditions attached to the buyer’s rights to use this software. If the purchase of software was as simple as purchase of a standard physical good (like a book, an apple or a bouquet of flowers), there would be no need for a EULA agreement at all. When a standard good is purchased, the seller of that good loses all legal rights to it and its use. This is what gives you the right to buy a book, highlight its text, allow your kids to color on it with crayons, spill coffee on it, sell it, donate it or throw it away without consequence from the person or business from which you purchased that book. However, a EULA agreement usually confers limitations on a buyer’s rights to use the software that is the subject of the document.

End User License Agreement Considerations

As long as a user complies with the specifications provided by the licensor, there is no risk of legal liability. However, if the purchaser violates the terms and conditions of a legally-binding EULA agreement, there could be trouble. With that said, it is important to note that not all EULA agreements are legally binding. Depending on the structure of these document, EULA agreements are often just that – agreements. They are not contracts, which are legally-binding as long as they are properly constructed and enforceable. By contrast, legal agreements are terms that are mutually consented to but are not generally enforceable and do not usually give the licensor explicit rights that can be acted upon. When EULA agreements are structured this way, they primarily serve the purpose of outlining a goodwill approach to the use of the software in question.

When EULA agreements are structured as contracts, they become subject to the rules of contract law. This means that if a EULA agreement is properly constructed and is enforceable, breaching the terms of that agreement will allow the party affected by that breach to hold the other legally accountable in court. For example, if a purchaser used the software in an unauthorized manner, the licensor could hold that buyer liable for breach of the EULA agreement. It is important to note that the primary purpose of EULA agreements is generally to protect licensors against intellectual property infringement and fraud. They also serve to reinforce that licensors maintain ownership of their property and that buyers are simply leasing the ability to access and use the software in question. It is therefore important to understand both your rights and the limitations provided by these agreements if you are looking to become party to one.

Licensing Guidance Is Available

If you have questions or concerns about EULA agreements, please consider connecting with LawTrades today. Scheduling a consultation with one of our experienced attorneys will allow you to get your questions answered so that you can make an informed decision about your legal situation. Whether you are looking to construct a EULA agreement, enforce an existing agreement or are unsure if an agreement you wish to enter into is legally binding, our efficient and effective team can help. We look forward to speaking with you.

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