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This End User License Agreement (“Agreement”) is an agreement between [2] Company, Inc. (“Company,” “we,” “us” or “our”) and you or the entity on whose behalf you are entering into this agreement (“you” or “your”) for the [NAME OF SOFTWARE] software (the “Software”).
PLEASE READ THIS AGREEMENT CAREFULLY. IT CONTAINS IMPORTANT TERMS THAT AFFECT YOU AND YOUR USE OF THE SOFTWARE. BY INSTALLING, COPYING OR USING THE SOFTWARE, YOU ACCEPT AND AGREE TO BE BOUND BY THE TERMS OF THIS AGREEMENT. [3] IF YOU DO NOT AGREE TO THESE TERMS, DO NOT INSTALL, COPY, OR USE THE SOFTWARE AS YOU HAVE NO RIGHTS TO DO SO OTHERWISE. [4] IF YOU ARE ACCESSING OR USING THE SOFTWARE ON BEHALF OF ANY ENTITY OR OTHERWISE IN PERFORMANCE OF SERVICES FOR ANY ENTITY, YOU REPRESENT AND WARRANT THAT YOU ARE AUTHORIZED TO ACCEPT THIS AGREEMENT ON SUCH ENTITY'S BEHALF, THAT ACCEPTANCE OF THIS AGREEMENT AND USE OF THIS SOFTWARE WILL NOT VIOLATE ANY AGREEMENT YOU HAVE WITH SUCH ENTITY, AND THAT SUCH ENTITY AGREES TO INDEMNIFY YOU AND COMPANY FOR VIOLATIONS OF THIS AGREEMENT. [5]
THE SOFTWARE IS PROTECTED BY UNITED STATES COPYRIGHT LAWS AND INTERNATIONAL COPYRIGHT LAWS, AS WELL AS OTHER INTELLECTUAL PROPERTY LAWS AND TREATIES. [6]
THIS LICENSE AGREEMENT DESCRIBES YOUR RIGHTS AND RESTRICTIONS WITH RESPECT TO THE SOFTWARE.
1. Software License
Subject to the payment of the fee required [7] and subject to terms and conditions of this Agreement [8], the Company hereby grants you a non-exclusive [9], non-sublicensable [10], non-transferable license [11] to [install and use] [stream, access, download and use] one copy of the Software in object code form [12] only on a single [personal computing device] [network server] [13] [solely to use the services made available by Company (the “Company Services”) [14]] for your own personal or internal business use [(the “Permitted Purpose”[15])]. Any Software that updates, supplements or replaces the original Software is governed by this Agreement unless separate license terms accompany such update, supplement or replacement, in which case such separate terms will govern in the event of a conflict with this Agreement or as otherwise provided in such separate terms.
Subject to the terms and conditions of this Agreement, the Company grants to you a revocable [16], non-exclusive, non-sublicensable, and non-transferable license to install and use the Software (the “Trial License”) strictly for your internal evaluation and review purposes and not for production purposes [17]. You agree not to use a Trial License for any purpose other than determining whether to purchase a license to the Software. Your rights to use the Trial License will immediately terminate upon the earlier of [(i) thirty (30) days following the date of download [18],] or (ii) such time that you purchase a license to the Software [19]. We reserve the right to terminate your Trial License at any time in our absolute and sole discretion [20].
In the event you downloaded or received alpha, beta or pre-release versions of the Software (the "Pre-release Software") subject to the terms and conditions of this Agreement, the Company grants you a revocable, non-exclusive, non-sublicensable, and non-transferable license to install and use the Pre-release Software strictly for your internal evaluation and review purposes and not for production purposes (the “Pre-release License”). Your rights to use the Pre-release Software will immediately terminate upon the earlier of (i) the expiration of the evaluation period established by us, [21] or (ii) notice of the public release of a non-evaluation version of the Software based on or that includes the Pre-release Software. We reserve the right to terminate your Pre-release License at any time in our absolute and sole discretion.
YOU ACKNOWLEDGE THAT TRIAL AND/OR PRE-RELEASE SOFTWARE MIGHT PLACE [WATERMARKS ON OUTPUT, CONTAIN LIMITED FUNCTIONALITY, FUNCTION FOR A LIMITED PERIOD OF TIME, OR LIMIT THE FUNCTIONALITY OR TIME OF FUNCTIONING OF ANY OUTPUT.] ACCESS TO AND/OR USE OF ANY FILES OR OUTPUT CREATED WITH SUCH SOFTWARE IS ENTIRELY AT YOUR OWN RISK. [22]
2. License Limitations
Section 1 states the entirety of your rights with respect to the Software, and we reserve all rights not expressly granted to you in this Agreement. Without limiting the foregoing, you will not do, or authorize or permit any third party to do, any of the following: [(a) use the Software for any purpose other than the Permitted Purpose]; (b) distribute, sub-license, sell, assign, or otherwise transfer or make available the Software; (c) reverse engineer, decompile, disassemble or otherwise attempt to discover or re-create the source code for the Software [23]; (d) modify, adapt, alter, improve or create any derivative works of the Software; [(e) connect the Software with any other online services or use the Software in conjunction with other than in connection with the Company Services]; (f) remove, circumvent or create or use any workaround or any copy protection or security feature in or relating to the Software; or (g) remove, alter or obscure any copyright, trademark or other proprietary rights notice on or in the Software.[24]
3. Ownership and Confidentiality
The Software is licensed, not sold. The Company or its licensors have ownership of all intellectual property rights inherent in or relating to the Software, which include, but are not limited to, all copyrights, patent rights, all rights in relation to registered and unregistered trademarks (including service marks), confidential information (including trade secrets and know-how) and all rights other than those expressly granted by this Agreement. [25]
You also acknowledge that when you download, install or use the Software, we have the right to automatically collect anonymous information on your use of the Software for aggregation purposes and the right to audit your use of the Software as defined in Section 9. [If you choose to opt-out of such anonymous data collection, we retain the right to automatically audit your use of the Software]. [26] We may also require that you provide information regarding yourself in order to download, install or use the Software or certain features. [27] All information collected from you in connection with the Software may be used by us in compliance with our Privacy Policy [28] [PROVIDE LINK]. By your using, installing, downloading or providing information, you consent to the Privacy Policy and our use of your information in compliance thereof.
[YOU ARE EXPRESSLY PROHIBITED FROM DISCLOSING THE SOFTWARE TO ANY PERSON OR ENTITY OR PERMITTING ANY PERSON OR ENTITY ACCESS TO OR USE OF THE SOFTWARE OTHER THAN IN ACCORDANCE WITH THIS AGREEMENT. [29] ]
4. Disclaimers
THE SOFTWARE IS PROVIDED TO YOU [FREE OF CHARGE [30] AND IS PROVIDED] ON AN “AS IS” BASIS, WITH ALL FAULTS AND DEFECTS AND WITHOUT WARRANTIES OF ANY KIND, EITHER EXPRESS [3] OR IMPLIED. COMPANY AND ITS LICENSORS DISCLAIM ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE AND NON-INFRINGEMENT [32]. COMPANY DOES NOT REPRESENT OR WARRANT THAT THE SOFTWARE IS FREE OF BUGS, ERRORS, VIRUSES OR OTHER DEFECTS OR THAT THE SOFTWARE WILL TRANSMIT DATA IN A SECURE MANNER. COMPANY AND ITS LICENSORS SHALL HAVE NO LIABILITY OF ANY KIND FOR THE USE OF OR INABILITY TO USE THE SOFTWARE. COMPANY AND ITS LICENSORS PROVIDES NO WARRANTY OR REPRESENTATIONS OF ANY KIND THAT THE SOFTWARE WILL OPERATE WITHOUT INTERRUPTION, MEET ANY PERFORMANCE OR RELIABILITY STANDARDS, ACHIEVE ANY KIND OF INTENDED PURPOSE, BE COMPATIBLE WITH ANY OTHER SOFTWARE OR SYSTEM, OR HAVE ERRORS THAT CAN BE CORRECTED.
Some jurisdictions do not allow the exclusion of implied warranties or limitations on how long an implied warranty may last. To the extent that those laws apply to this Agreement, the exclusions and limitations set forth above may not apply. [33]
5. Indemnification
You will defend, indemnify and hold harmless Company and its affiliates, independent contractors, service providers, suppliers, partners, resellers, distributors and consultants, and their respective directors, officers, employees and agents (collectively, the “Company Parties”) against any third party claims, suits or actions and any resulting damages, costs, liabilities and expenses (including, but not limited to, reasonable attorneys' fees) arising out of or related to: (a) your use of, or inability to use, the Software; or (b) your violation of any terms of this Agreement. [34]
6. Limitation of Liability
IN NO EVENT SHALL ANY OF THE COMPANY PARTIES BE LIABLE FOR ANY DIRECT, SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES, OR ANY OTHER DAMAGES OF ANY KIND, INCLUDING BUT NOT LIMITED TO LOSS OF USE, LOSS OF PROFITS OR LOSS OF DATA, WHETHER IN AN ACTION IN CONTRACT, TORT (INCLUDING BUT NOT LIMITED TO NEGLIGENCE) OR OTHERWISE, ARISING OUT OF OR IN ANY WAY CONNECTED WITH THE USE OF OR INABILITY TO USE THE SOFTWARE, EVEN IF A COMPANY PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. IN NO EVENT SHALL THE AGGREGATE LIABILITY OF THE COMPANY PARTIES, WHETHER IN CONTRACT, WARRANTY, TORT (INCLUDING NEGLIGENCE, WHETHER ACTIVE, PASSIVE OR IMPUTED), PRODUCT LIABILITY, STRICT LIABILITY OR OTHER THEORY, ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE SOFTWARE EXCEED THE GREATER OF (I) THE COMPENSATION YOU HAVE PAID, IF ANY, TO COMPANY FOR THE SOFTWARE, OR (II) XXX DOLLARS ($XXXX). [35]
Some jurisdictions do not allow the exclusion or limitation of certain damages. To the extent that those laws apply to this Agreement, the exclusions and limitations set forth above may not apply.
7. Termination
This Agreement and your right to use the Software will terminate immediately if you fail to comply with any of the terms and conditions of this Agreement. [36] Company may terminate this Agreement at any time, with or without cause, immediately upon notice to you. [37] [Company may also discontinue the Company Services with which the Software is used, in which case this Agreement will terminate automatically without notice to you.] You may terminate this Agreement [by cancelling your Company Services account opened in connection with your use of the Software and] deleting all copies of the Software in your possession or control. [38]
In the event of the termination of this Agreement for any reason: (a) the license granted to you in this Agreement will terminate; (b) you must immediately cease all use of the Software and destroy or erase all copies of the Software in your possession or control; and (c) Sections 3 (Ownership), 4 (Disclaimers), 5 (Indemnification), 6 (Limitation of Liability), 7 (Termination), 8 (Evaluation and Feedback), 9 ((Governing Law; Jurisdiction) and 9 (Verification) (for the period therein specified), 10 (Payment and Taxes), and 11 (General) will survive any such termination. [39] [Further, in the event the agreement governing your use of the Company Services with which the Software is used is terminated for any reason, this Agreement will terminate automatically without notice to you.[40]]
8. Evaluation and Feedback [41]
You may, at your own risk and expense provide Company with information and feedback (including, without limitation, questions, comments, suggestions, or the like) regarding the performance, features, functionality and your overall experience using the Software (“Feedback”). We will be free to use any ideas, concepts, know-how or techniques contained in such Feedback for any purpose whatsoever, including, without limitation, developing, making, marketing, distributing and selling products and services incorporating such Feedback.[42] In connection therewith, you hereby grant to Company an exclusive, royalty-free, irrevocable, perpetual worldwide right and license to reproduce, use, disclose, exhibit, display, transform, create derivative works and distribute any such Feedback without limitation. [43] We will have no obligation to consider, use, return or preserve any Feedback you provide to us. Any Feedback you provide to us may or may not be treated confidentially by us, and we will have no obligation or liability to you for the use or disclosure of any Feedback. You should not to expect any compensation of any kind from us with respect to your Feedback. .
9. Verification [44]
We or a certified auditor acting on our behalf, may, upon our reasonable request and at our expense, audit you with respect to the use of the Software. Such audit may be conducted by mail, electronic means or through an in-person visit to your place of business. Any such in-person audit shall be conducted during regular business hours at your facilities and shall not unreasonably interfere with your business activities. We shall not remove, copy, or redistribute any electronic material during the course of an audit. If an audit reveals that you are using the Software in a way that is in material violation of the terms of this Agreement, then you shall pay our reasonable costs of conducting the audit. [In the case of a material violation, You agree to pay Us any amounts owing that are attributable to the unauthorized use. [45]] In the alternative, we reserve the right, at our discretion, to terminate the license for the Software, in addition to any other remedies available under law. This Section shall survive expiration or termination of this Agreement for a period of two (2) years.
10. Payment and Taxes
If credit has been extended to you by us, all payments under this Agreement are due within thirty (30) days of the date We mail an invoice to you. If we have not extended credit to you, you shall be required to make payment concurrent with the delivery of the Software by us. [46] Any value added tax, use tax, sales tax or similar tax (“Transaction Taxes”) shall be your sole responsibility. [47] Each party shall pay all taxes (including, but not limited to, taxes based upon its income) or levies imposed on it under applicable laws, regulations and tax treaties as a result of this Agreement and any payments made hereunder (including those required to be withheld or deducted from payments); provided that you shall be responsible for all Transactions Taxes and shall pay or reimburse us for the same upon invoice. Each party shall furnish evidence of such paid taxes as is sufficient to enable the other party to obtain any credits available to it, including original withholding tax certificates.
11. Governing Law; Jurisdiction
Unless expressly prohibited by local law, this Agreement is governed by the laws of the State of [_____], without regard to any conflict of law principles to the contrary. You hereby irrevocably consent to jurisdiction of the state and federal courts located in [______] County with respect to any proceeding regarding this Agreement or the Software. The 1980 UN Convention for the International Sale of Goods or any successor thereto does not apply to this Agreement. [48] You will not prosecute any action, suit, proceeding or claim arising under or by reason of this Agreement or the Software except in such courts.
12. General
(a) Legal Compliance; Export Restrictions. You represent and warrant that (i) you are not located in a country that is subject to a United States embargo, or that has been designated by the United States government as a “terrorist supporting” country [49]; and (ii) you are not listed on any United States government list of prohibited or restricted parties. The Software and related technology are subject to applicable United States export laws and regulations. You must comply with all applicable laws and regulations, including without limitation all applicable United States and international export laws and regulations, with respect to the Software and related technology. Without limitation, you may not export, re-export or otherwise transfer the Software or related technology, without a United States government license: (i) to any person or entity on any United States export control list; (ii) to any country subject to a United States sanctions; or (iii) for any prohibited end use.
(b) U.S. Government License Rights. If acquired by any agency of the United States government, such agency acknowledges that (i) the Software constitutes “commercial computer software” or “commercial computer software documentation” for purposes of 48 C.F.R. 12.212 and 48 C.F.R. 227.7202-3, as applicable, and (ii) such agency's rights are limited to those specifically granted to you pursuant to this Agreement. [50]
(c) Severability. If any provision of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, or unenforceable, the remainder of this Agreement will remain in full force and effect, and the remaining provisions will be amended to achieve as closely as possible the effect of the original term and all other provisions of this Agreement will continue in full force.
(d) Assignment. [51] You may not assign or otherwise transfer this Agreement, or assign, sublicense or otherwise transfer any of your rights under this Agreement without the prior written consent of Company, and any attempted assignment without such consent will be void.
(e) Attorney's Fees. In any action or proceeding to enforce rights under this Agreement, the prevailing party will be entitled to recover costs and reasonable attorney's fees.
(f) Entire Agreement. This Agreement, [our Privacy Policy [LINK]] [list any other agreements] sets forth our entire agreement with respect to the Software and supersedes all prior and contemporaneous understandings and agreements with respect to the Software whether written or oral. [No term or condition contained in any purchase order shall apply unless such term or condition is expressly accepted by us in writing.[52]]
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[2] The specific identification of the parties should not be overlooked. From the Licensee’s perspective, it is important that the actual entity which owns the software is identified as the Company and the party who will be using the software is identified as “you”. Person may be working for a corporation.
[3] To ensure the users are legally bound by the terms, the EULA must be presented in a manner that forms a legally enforceable contract. You want to ensure that the user has notice of the EULA and affirmatively or implicitly agrees to the terms. The preferred EULA is a clickwrap license, where the EULA is presented to the user who clicks a button to indicate the user read and agrees to be bound by the terms of the agreement presented. Other methods of user acceptance of the EULA terms include active steps taken by the user, such as installation, copying, or use. Because users may not read the entire EULA, the acceptance section should be in the beginning of the agreement to provide clear notice to the user prior to any user action. Software marketplaces or websites may provide links to the EULA without affirmative acceptance. Some courts have found these licenses to be unenforceable. Because the EULA is often non-negotiable, the terms are typically highly preferential to the licensor. Licensees who are large corporate parties for enterprise use might need to consider more neutral terms. See footnote [52] regarding the “Entire Agreement.”
[4] An opt-out provision is included, alerting the user that not installing, copying or using the software will not bind them to the agreement.
[5] User rep and warranty that the user has the right to authorize acceptance of the agreement is included in this section. Provides protection for the individual from corporate acts. This provision includes an express statement that you, the Licensee, have the authority to bind the company, which also puts the employee on notice.
[6] Capture global nature of software use and development.
[7] For paid software, where fee payment and download are not locked together, It may be helpful to insure fees are paid for use. Cf. Section 4. Placing the conditions before the grant is important. A violation of a term gives the licensor the right to terminate the license itself. Had the grant preceded the conditions, a violation does not provide a right to terminate. With the conditions placed first, a breach of the license by the licensee also means that the licensee is no longer licensed (i.e., terminated agreement) and is therefore an infringer.
[8] Terminates the license on breach, rather than a continued license with damages for breach. The conditional language gives rise to a separate damages theory, which is particularly important for freeware. Consider adding a revocable provision for freeware. See also the provision for curing a breach in section 7 below.
[9]-[11] Software vendors will retain the right to their software and in order to provide rights to other potential users, will often grant non-exclusive, non-sublicensable, non-transferable licenses to user. EULAs commonly limit the license to only those uses which are specified. The EULA will also vary by content and services. For instance, some software is installed and used, but other software may provide content that is refreshed regularly (news, e-commerce).
[12] This is object code–focused (see 2(c)) – could be changed to source code if applicable. Switching from object code to source code is not as easy as changing a flag in the agreement. Source code requires consideration of confidentiality, distribution, modification, and escrow.
[13] The license rights are typically granted to identified devices.
[14] Where the Software is tied to certain services. For example, the licensee may purchase a service from the licensor, and then download software to use that service.
[15] Depends on your use. Consider defining “internal” and “non-commercial.”
[16] Ties to the termination in the last sentence of this section. Consider clarifying what production purposes means. For example, the provision may state “not for production purposes, or any other purpose not explicitly defined.”
[17] Limited to evaluation purposes and not productive use.
[18] It may be desirable to limit the trial period beginning on a clear start date such as the date of download or date of registration for a trial.
[19] For paid software, end the trial when the paid license begins.
[20] Helpful to reserve full termination rights in case any concerns arise.
[21] Limit Pre-release Software to an evaluation period, such as 30 (days), or the release of a non-evaluation version. Released software may be a non-evaluation version of the same software, or may be a bundled product with the non-evaluation version. Consider clarifying how notice is provided. Notice of release may be defined in several different ways: termination on receipt of notice, notice plus a defined number of days, or public release / notice.
[22] Express statement of risk. Waiver assuming risk of using trial / pre-release software.
[23] This provision is tied to the “object code” license as noted above. Can be deleted for source code. If source code is provided, additional considerations regarding open source software and third-party notices are relevant to distribution. Consider defining distribution further. Distribution may be internal distribution with the licensee organization, or external distribution to others.
[24] This section explicitly states which rights are reserved by the Company that are not granted to the user.
[25] This section makes clear that no IP ownership is transferred to the user, and that the license does not entitle the user to do anything with the software other than what the user has been licensed. Licensees who are software developers using the licensed software to create other software will likely want some form of derivative work rights. One possible solution is to grant limited intellectual property rights to ensure the licensee retains all rights to any original work authored by themselves. This grant, however, should not diminish any of the Licensor’s rights. Consider whether the licensee will receive sample code.
[26] Defines data collection rights. Consider separate section/agreement for anonymous data collection and/or privacy rights.
[27] Automatic collection of data is highlighted by the inclusion of these provisions.
[28] Privacy policy may need to be adjusted depending on European law – “what is the information provided?”. Any provision not mentioned in this agreement may be included in the Privacy Policy.
[29] Whether a confidentiality clause is used in software depends upon the type of software and conditions of its use. Some software providers may want to the user to permit others access to the software, where that new user then would fall under the EULA. Note that confidential source code can be handled through a signed confidentiality agreement—not within a EULA.
[30] This isn’t always the case. See footnote 29.
[31] Express warranties may be negotiated in which case the waiver should be deleted.
[32] Title and non-infringement may be covered by a negotiated indemnity, though the implied warranties should be waived so as not to provide an alternate cause of action.
[33] May also be negotiated
[34] Typical indemnification clause from the licensee – this may be negotiated in the case of paid-for software. Licensor wants to retain right to terminate, but wants rights to alternate actions, such as a buy-out or update. If EULA is negotiable, licensee may want certain representations, warranties, and indemnifications to cover breach of those representations and warranties, such as fraud, willful misconduct, gross negligence. Also, licensee may want indemnification for claims cause by Licensor actions or omissions.
[35] Typical limitation of liability clause – this may also be negotiated in the case of paid-for software. In the case of free software, having a non-zero limit may be more palatable (e.g., $500). For freeware, Licensor should avoid representations, warranties, indemnities, and any other liability.
[36] Auto termination on breach, sometimes negotiated to notice with an opportunity to cure.
[37] Allowing Company to terminate at any time with or without cause protects Company, if for some reason Company must remove the software. May not be applicable for paid-for software.
[38] A reciprocal right to terminate by the user terminates all licensed rights to the user.
[39] Survival clause has been bundled into this termination clause.
[40] Termination tied to termination of Company Services where applicable
[41] This provision is used specifically for an evaluation and feedback use of the software and describes how the Company can use the feedback. Such provision may be important to Company to protect Company from being sued by the user. Consider clarifying “reasonable efforts.”
[42] The feedback clause alerts the user that any comments made to the Company is licensed to the Company. This may cover IP work, which the user may not know s/he is contributing to the Company, allowing the Company to use any user feedback/creations that are voluntarily submitted to the Company.
[43] Clear license grant supports the user friendly language above.
[44] Ensures actual use is within bounds of license. For example, does the number of users using the license exceed contractual limits?
[45] Audit and recovery rights may be helpful where there are limits on the permitted use, or where fees may be payable depending on the use.
[46] Captures complex business relationships, not individual end-users
[47] Terms that may be applicable for paid-for software
[48] Avoid ambiguity in applicability of UN CISG.
[49] Under all classifications of the Export Administration Regulations, software may not be exported to certain countries.
[50] Limits government’s rights for licensed software sold to the public. Licensor does not need to provide additional information to the government, including technical information and documentation. Government may negotiate for additional information.
[51] Licensor may consider an express provision for the right to transfer the agreement.
[52] For paid-for software, negate the terms of a related purchase order so that this license agreement will control. If there are separate docs related to the software, ensure the terms of the documents align. Consider tying this provision to the implicit acceptance provision in the introductory paragraph of the agreement. For example:
By installing, copying, or using the software you agree that this agreement sets forth our entire agreement with respective to the Software and supersedes all prior and contemporaneous understandings and agreements with respect to the Software whether written or oral.
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