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User Agreement

Sample End User License Agreement Template:

An EULA is not quite the same as a Service Level Agreement (SLA), although they are often confused as the same thing.

The End User License Agreement regulates the relationship between the developer and the end user. A Service Level Agreement sets out the actual service details, including what end users can expect and what to do if they have a complaint.

In practice, then, many developers use both SLAs and EULAs, but we're talking specifically about EULAs here.

Let's take a closer look at these important agreements and what information yours should include.

User License Agreement

What is an End User License Agreement?

An EULA is a specific contract between the software creator, developer, or publisher, and the individual end user who purchases the software. The contract gives the user a right to use a copy of the app or software in a specific way, subject to clear conditions.

The end user can't download or install the software copy until they agree to these conditions of use. In other words, think of an EULA like a rental agreement. The user pays to use the software, but the developer still owns it.

This is important because there's a common misconception that end users "own" their copy of your app. People often assume that when they buy something, it belongs to them. However, all the end user has is a functioning copy of your software - not rights to the software itself.

Benefits of Having an End User License Agreement

What are the Benefits of Having an End User License Agreement?

It's vital that you draft and publish an EULA on your website for many reasons. However, there are a few reasons in particular that we'll draw your attention to.

  • Limiting your liability: For software and hardware crashes, and other indirect damage. Without a limitation clause, a user could theoretically try to sue you for anything that happens to their machine after they download your software.
  • Restricting Use: You can restrict what users do with your app or software. This is critical because it means that people can't use your app for illegal activities, such as hacking or spamming, or abuse it in any way.
  • Controlling Your Property: Your software is your property. Without an EULA, you risk someone using your app for their own commercial purposes and potentially claiming ownership.
  • Disclaiming Warranties: An EULA warranty protects you from legal action if your services aren't running 100% of the time. Since no software is bug-free, and downtime is inevitable, a warranty manages your users' expectations.
  • Terminating Accounts or Service: An EULA allows you to revoke someone's license or end your services for any reason. Remember, an EULA keeps your property firmly within your control - it's up to you who has a license to use it.

Under the Law

Are EULAs Binding Under the Law?

An EULA is legally binding.

Why? Because it's a legally enforceable contract between two consenting parties - you, and the individual user.

Since an EULA is a contract, contract law applies. Whichever jurisdiction you're in, contracts are typically only valid if they are:

  • Mutually agreed to
  • Clear and unambiguous
  • Legal
  • Fair i.e. they're not unfairly biased in favor of one party

What this means in practical terms is that you can enforce the contract if the user agrees to it and the terms are not unclear or unfair.

So, how do you ensure that you have a legally binding contract? By including certain clauses.

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