The legal agreement when you buy software products is referred to as the end user license agreement (EULA). This article explains the definition of EULA, its purpose, what it includes, and how you can create one for your software application or mobile app.
What is an end user license agreement (EULA)?
An end user license agreement (EULA) is a legally binding agreement between a software company and its users, specifying the terms, conditions, liabilities, and fair use policies that a software user must abide by in order to continue to use the product.
What is the purpose of an end user license agreement?
The goal of a EULA is to govern the relationship between software developers and their users. For example, a company may want to remind its users that they are not allowed to redistribute the software after purchasing it. Buying the product does not give them the right to create copies and sell to third parties at a profit.
Another agreement in the EULA might be that the user agrees to the processing of their personal information, payment details, user generated content, and liability waivers.
The EULA intends to keep both parties informed and protected about their rights as they use a software product. The developers of the software are free to articulate the terms and conditions that govern user behavior. And users are educated about their rights, restrictions, and access to legal recourse.
Hence, the purpose of the EULA is to clearly delineate what users can or cannot do while interacting with the software, thereby protecting intellectual property rights, preventing any software reverse engineering, and guarding against copyright infringement.
Since it’s a legally-binding agreement, the EULA is presented at the time of installation and setup — giving users the option to opt out at the start if they do not agree with the conditions.
What does a EULA include?
Every end user license agreement is unique and tailor-made for the organization's specific requirements. Having said that, most EULAs include the following things:
- License Conditions
- Intellectual Property and Ownership
- Warranty Information
- Limitation of Liability
- Changes to the EULA
Is a EULA the same as a software license agreement?
The end user license agreement and a software license agreement are used interchangeably, but they are two separate entities.
The commonality between the two is that they are both legally binding agreements between a software firm and its users, describing the conditions under which users may interact with the application.
However, the key difference between an EULA and a software license agreement is that the EULA comes in the form of an online consent form that users must agree with before purchasing or downloading a software product. The software license agreement (SLA), on the other hand, is shipped with physical software products which means it’s a physical copy of the terms and conditions.
How can I create my own EULA?
We’d like to preface this by stating that an end user license agreement is a complicated and legally binding agreement, so it’s important to take it seriously. We recommend that you use a EULA generator that’s vetted and certified by an experienced lawyer.
If you would like to write an end user license agreement yourself, make sure that you do the following things:
- State your full business name and place of business registration
- Outline the rules that your customers must follow while using your software
- Define conditions and user behaviors that may trigger a termination
- Explain your intellectual property claims and rights
- Include disclaimers and liability statements
When do you need a EULA?
End user license agreements play a crucial role — they protect the rights of the business owner / software operator and define the rules that software users must follow. Generally speaking, an end user license agreement is required for any software application — whether that's a cloud-based app or one that requires download and installation on your device.
Some specific reasons why you need a EULA are:
- If there's a regulatory requirement for you to outline customer rights (how they can opt out or cancel payments)
- If your software is meant only for use by adults and the liability around misuse
- If you process payments on your app or collect user information and need to detail how that information is captured, stored, and used
- If users on your platform can trade goods and services with one another, and you need a document that governs this transactional relationship (such as Craigslist)
- If you want to protect yourself from any liability resulting from user actions
End user license agreement template
Here is a sample template created by Enzuzo’s EULA generator.
We’ve copied and pasted the EULA template into a public Google doc. Feel free to download, edit, and tweak to your liking.
👉 Download Sample EULA Template in Google Docs
5 EULA examples
End user license agreements are present in most major software applications, including popular games such as Fortnite and Roblox, fintech apps such as Paypal and Cashapp, accounting software like Quickbooks, and everything in between.
Here are a few other EULA examples we found during our research. All are from leading software firms, so we can vouch for their comprehensiveness:
Summary and Wrap Up
What is EULA? An end user license agreement is a legally binding document that governs the relationship between a software company and its users. The purpose of a EULA is to protect both software publishers and users by preventing any unauthorized or misuse of the platform.
👉 Looking to build a EULA for your business? Check out Enzuzo's EULA generator that's vetted and certified by lawyers.