An end-user license agreement or EULA is an agreement between a software licensor (known as licensor) and the end user, who utilize/operate the software (known as licensee) after purchasing it. EULA can go by several other names, like License Agreement, Licensed Application End-User Agreement, Browse-wrap Agreement, Shrink-wrap License, Click-wrap License, and Software License Agreement.
EULA agreement enumerates the rights and limitations regarding the application of the software. If the software developer does not include EULA, then the software will be similar to any open-source software, which are freely available for sharing, modification or use.
The material clauses in any EULA should be:
In two of the eminent cases, ProCD, Inc. v. Zeidenberg and Feldman v. Google, Inc. (2007), the United States Court held that EULA agreements are enforceable between the licensor and the licensee, as the licensee has got sufficient time to read and clearly understand the agreement and acknowledge the same before purchasing it for use. These license agreements are also enforceable in India as they are in conformity with the provision of the Indian Contract Act, 1872.
It becomes crucial to draft the EULA with utmost vigilance, considering that the software is only licensed, user rights are explicitly defined along with other contractual provisions and simultaneously the software remains the property of the licensor. It is also important that the licensee categorically agrees to the terms in order to bring into existence a defensible contract between the parties.
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