An end user license agreement (EULA) is a contract for the use of computer software.  When someone buys software, the vendor or software manufacturer also grants a license for use of the software that specifies limits on the use of the software, and can also include copyright notices, warranties, and limitations on liability.  Some license agreements also restrict the allowable methods for dispute resolution, allowing only arbitration.

How Is an EULA Accepted?

The EULA can be accepted in several different ways, and the manufacturer or vendor determines which method to use for their product depending on the way the software is distributed.  These acceptance methods include:

  • Shrink Wrap Agreements - Shrink wrap agreements are included in the packaging of most software shipped to the customer.  The package is often sealed with shrink wrap with the license agreement inside.  The customer is not aware of the terms until after the package is opened, so there is some debate as to whether the agreement is enforceable, and some courts have ruled that customers must be allowed to return products after reading the EULA.
  • Click Wrap Agreements - Click wrap agreements are license agreements that are viewed on the computer, typically during installation after a program is downloaded.  The user must agree to the terms by clicking on the words "I Agree" after the terms are read.  These agreements are typically enforceable if the terms must be viewed before acceptance, the user cannot proceed without agreeing, and the user had the option of not agreeing and receiving a refund.
  • Mailed Acceptance Cards - Some software purchases come with a card that must be filled out with the customer's agreement to the EULA terms and then mailed to the company.  This method has become somewhat less common.

Do I Need a Lawyer?

The information contained in an EULA can be very confusing and contain many restrictions that you might not expect.  If you have been accused of violating an EULA, an experienced business lawyer can advise you of your rights and options.  If you need to create a license agreement for software that you have created, a lawyer can help you protect your rights under copyright laws.  A lawyer can also represent you in court if needed.