Overview of End User Licensing Agreement


What is this document?

An End User Licensing Agreement is an agreement where a company provides a license to a customer to use their product or service. It grants a license to use company intellectual property, but does not transfer ownership of intellectual property.


When would I use this document?

An End User Licensing Agreement (EULA) is used in situations where a company wishes to grant a customer a license to use its product or service, but does not want the customer to own any rights to its product or service. EULAs are often used by websites that offer software products or services to website users. They are sometimes seen as pop-ups that state something to the effect of “By using our product or service, you accept the terms and conditions of the End User Licensing Agreement…”


Who signs this Agreement?

If the product or service is not obtained through a website, the company and the customer will sign the agreement.

If the product or service is obtained through a website, this document will be part of the website and may appear as a pop-up prior to downloading software or using a product. It is not physically signed by the user/customer. Most End User Licensing Agreements provide that a user of the site or customer of the product or service accepts the terms by using the product or service. In some cases, the user or customer must explicitly accept the EULA on a website by clicking an “I Accept” button before being able to use the product or service.


More details about this document

An End User Licensing Agreement is needed only when a company is granting a license to a customer to use a product or service. This is common among companies providing a software service to a customer, and the customer must download the product or service in order to use it.

An End User Licensing Agreement gives a customer the right to use the product or service by granting a license. The agreement does not transfer ownership of intellectual property to a customer, and places limits on the customer’s use of the product or service. For example, the agreement can provide that once the customer stops using the product or service, their license to use the product or service is revoked.

An End User Licensing Agreement is different from a Terms of Use, since the EULA provides a license, and sets out the conditions and obligations that the customer must fulfill in order to be granted the license. It also sets out the conditions for how the product or service can be used, and when the license will be revoked or terminated. In contrast, a Terms of Use governs a customer’s general use of a website, but does not grant a license to use any product or service delivered through the website.


What are the core elements of this document?

The core elements of an EULA include: Grant of License; Right Granted to the Company; Event of Default; Liability; and Disclaimer.

Some additional clauses that can be included in an EULA are: Payment; Permitted Use; and Support Services.


Related Documents

Terms of Use: a general agreement governing the use of a website

Privacy Policy: part of the website setting out how private information will be used

Software Development Agreement – an agreement between the developer of software and the customer who hires the developer to create the software


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