EULA Template (End User License Agreement)

Use a digital device. Install an app. Download some free software. Sign into an online service. No matter where we turn in the digital marketplace, we’ll run into terms of use agreements, license and sublicense agreements, and terms and conditions. 

These digital gatekeepers stand between you and testing that new app or mobile device. So, are you going to stop and take 3 hours to read the EULA before you smash the “accept” button? Probably not. Who does that anyway, right?

Don’t let that deter you from forming an end-user licensing agreement for a product launch. Not only does this agreement safeguard your intellectual property and state your T&Cs for using your product or service, but it also provides limitation of liability and many other legal and financial safety rails for your online business or startup.

What is an End User Licence Agreement?

The end-user license agreement (EULA), terms of use (ToS), and terms and conditions (T&Cs) are the digital documents presented to consumers online when interacting with digital products and services. For instance, you click the “accept” button that virtually signs a software license agreement between you and Apple when you turn on your iPhone and access iOS and the app store for the first time.

The EULA was originally a simple, straightforward license grant. The license terms contained disclaimers regarding liability, bugs in the platform or computer software, and how many copies of the software a user could install across their devices. 

Today, EULAs are much more restrictive documents. They can stop users from disclosing software details and benchmarks, potentially giving companies control over deleting files on your system. In some cases, they might set the stage for the company to come after users for loss of profits for unauthorized use of the software.

The next time you sign up for an EULA, take a second to skim through the document. You’ll realize software license agreements for mobile apps span dozens of pages and thousands of words in legalese, and they can cost thousands of dollars just in lawyers’ fees alone to draft, edit, and finalize.

The broad scope of these agreements can be so open and hard to nail down. Consumers don’t want to waste time reading and understanding the implied warranties and statutory revisions; they just want to get on with it and use the product or service.

In companies focusing on B2C licensing agreements, the end user is the customer using the software. If the customer is a business providing the software to its employees, the EULA applies to both the business and its employees.

Why Do I Need an EULA?

The EULA is a legal document designed to protect the software developer from the end-user stealing its trade secrets or intellectual property rights, or decompile its source codes. It safeguards the software product or software applications developed by firms from being misused and limits liability in the event of a user going rogue and using the software for a particular purpose other than its original intended use. 

If you’re drafting a formal EULA for commercial purposes, you’ll need the assistance of a contract lawyer. These professionals specialize in drafting documents to enhance the ease of enforceability of specific language of governing law around the terms and conditions in these contracts. They understand how to structure clauses for outlawing copyright infringement, unauthorized upgrades, and reverse engineering of products or platforms. 

EULAs allow the developer to offer different price tiers on product offerings depending on how the end-user wants to interact with the product. For instance, you might get a personal-use license agreement or a commercial-use agreement for companies, with a sliding scale on pricing based on users. Obviously, the commercial-use license will be far more expensive than the personal-use license, giving developers a chance to compete in both B2C and B2B markets. 

How Do Users Accept EULAs?

The user can accept an EULA using two different methods, depending on the type of software or service they’re accessing. If they’re purchasing physical products in boxes with installation or activation codes, they’ll accept the license when they remove the packaging and get their physical product key. This type of EULA is known as a “shrink wrap” license.

The other type of license appears as a pop-up with the T&Cs when they download an app or software platform. They’ll need to click the “Agree” button to start the download or installation.  This type of EULA is known as a “click-wrap” license. 

All EULAs must comply with The Health Insurance Portability & Accountability Act of 1996 (HIPAA). It’s the governing law for these agreements, but it’s common for developers to violate the legislation and add overly restrictive T&Cs. 

Changing an EULA after a Product Launch

It’s industry practice to avoid changing the provisions in an EULA after a product launch to protect its customers. However, no company can completely guarantee an error-free product launch, and if there’s a need to change the EULA after a digital product goes on sale, you’ll need to consult an attorney before making those changes to understand the legal ramifications they have on your business and customers.

Is the EULA a Binding Legal Agreement?

Users who violate applicable law in the terms of this agreement need legal advice from well-rounded, seasoned attorneys with experience in arbitration and wading through the mountains of legal documents in these cases. The only way out of legal action is if the licensor added a clause with a severability waiver or warranty of any kind discussing how the user can get out of the entire agreement.

Download an EULA Template from FreshDox with a Free 7-Day Trial

If you need an EULA for your online product or service, don’t leave it up to an EULA generator or waste your time trying to write one on Google Docs. Many EULAs are the size of short novels, and the PayPal ToS is over 20,000 words. It is written in such complex legalese that you’d go cross-eyed if you tried to get through it all. 

Rather, sign up for a free 7-day trial of a Premium or Basic account on FreshDox. Get immediate access to a customizable EULA for any online product or digital service. Edit your EULA, download it in Word or PDF, and protect your business.