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End-user license agreement

An end-user license agreement or EULA (/ˈjlə/) is a legal contract between a software supplier and a customer or end-user, generally made available to the customer via a retailer acting as an intermediary. An EULA specifies in detail the rights and restrictions which apply to the use of the software.[1]

Form contracts for digital services (such as terms of service and privacy policies) were traditionally presented on paper (see shrink-wrap agreement) but are now often presented digitally via browsewrap or clickwrap[2][3] formats. As the user may not see the agreement until after they have already purchased or engaged with the software, these documents may be contracts of adhesion.


Software companies often make special agreements with large businesses and government entities that include support contracts and specially drafted warranties.


Many EULAs assert extensive liability limitations. Most commonly, a EULA will attempt to hold harmless the software licensor in the event that the software causes damage to the user's computer or data, but some software also proposes limitations on whether the licensor can be held liable for damage that arises through improper use of the software (for example, incorrectly using tax preparation software and incurring penalties as a result). One case upholding such limitations on consequential damages is M.A. Mortenson Co. v. Timberline Software Corp., et al.[4] Some EULAs also claim restrictions on venue and applicable law in the event that a legal dispute arises.


Some copyright owners use EULAs in an effort to circumvent limitations the applicable copyright law places on their copyrights (such as the limitations in sections 107–122 of the United States Copyright Act), or to expand the scope of control over the work into areas for which copyright protection is denied by law (such as attempting to charge for, regulate or prevent private performances of a work beyond a certain number of performances or beyond a certain period of time). Such EULAs are, in essence, efforts to gain control, by contract, over matters upon which copyright law precludes control.[5]

Product liability[edit]

Most licenses for software sold at retail disclaim (as far as local laws permit) any warranty on the performance of the software and limit liability for any damages to the purchase price of the software. One well-known case which upheld such a disclaimer is Mortenson v. Timberline.

Reverse engineering[edit]

Forms often prohibit users from reverse engineering. This may also serve to make it difficult to develop third-party software which interoperates with the licensed software, thus increasing the value of the publisher's software through decreased customer choice. In the United States, EULA provisions can preempt the reverse engineering rights implied by fair use, c.f. Bowers v. Baystate Technologies.


Some licenses such as the Microsoft .NET Framework redistributable EULA purport to prohibit a user's right to release data on the performance of the software, but this has yet to be challenged in court.

Criticism[edit]

Jerry Pournelle wrote in 1983, "I've seen no evidence to show that ... Levitical agreements — full of "Thou Shalt Nots" — have any effect on piracy". He gave an example of an EULA that was impossible for a user to comply with, stating "Come on, fellows. No one expects these agreements to be kept". Noting that in practice many companies were more generous to their customers than their EULAs required, Pournelle wondered "Why, then, do they insist on making their customers sign 'agreements' that the customer has no intention of keeping, and which the company knows won't be kept? ... Must we continue making hypocrites out of both publishers and customers?"[15]


One common criticism of end-user license agreements is that they are often far too lengthy for users to devote the time to thoroughly read them. In March 2012, the PayPal end-user license agreement was 36,275 words long[16] and in May 2011 the iTunes agreement was 56 pages long.[17] News sources reporting these findings asserted that the vast majority of users do not read the documents because of their length.


Some critics highlight the hidden privacy implications of end-user license agreements. Many include clauses that allow the computer or device to provide information to third parties on a regular basis without notifying the consumer.[18]


Several companies have parodied this belief that users do not read the end-user-license agreements by adding unusual clauses, knowing that few users will ever read them. As an April Fool's Day joke, Gamestation added a clause stating that users who placed an order on April 1, 2010, agreed to irrevocably give their soul to the company, which 7,500 users agreed to. Although there was a checkbox to exempt out of the "immortal soul" clause, few users checked it and thus Gamestation concluded that 88% of their users did not read the agreement.[19] The program PC Pitstop included a clause in their end-user license agreement stating that anybody who read the clause and contacted the company would receive a monetary reward, but it took four months and over 3,000 software downloads before anybody collected it.[20] During the installation of version 4 of the Advanced Query Tool the installer measured the elapsed time between the appearance and the acceptance of the end-user license agreements to calculate the average reading speed. If the agreements were accepted fast enough a dialog window "congratulated" the users to their absurdly high reading speed of several hundred words per second.[21] South Park parodied this in the episode "HumancentiPad", where Kyle had neglected to read the terms of service for his last iTunes update and therefore inadvertently agreed to have Apple employees experiment upon him.[22]


End-user license agreements have also been criticized for containing terms that impose onerous obligations on consumers. For example, Clickwrapped, a service that rates consumer companies according to how well they respect the rights of users, reports that they increasingly include a term that prevents a user from suing the company in court.[23]


In a 2019 article published by Kevin Litman-Navarro for The New York Times, titled We Read 150 Privacy Policies. They Were an Incomprehensible Disaster,[24] the complexity of 150 terms from popular sites like Facebook, Airbnb, etc. were analyzed and comprehended. As a result, for example, the majority of licenses require college or higher-level degrees: "To be successful in college, people need to understand texts with a score of 1300. People in the professions, like doctors and lawyers, should be able to understand materials with scores of 1440, while ninth graders should understand texts that score above 1050 to be on track for college or a career by the time they graduate. Many privacy policies exceed these standards."[24]


The United Kingdom's National Consumer Council undertook a study published in 2008 which found issues with the way 17 major IT businesses had been using EULA's and asked the Office of Fair Trading to undertake an investigation.[25]

Abandonware

Clickwrap license

Free software license

Glossary of legal terms in technology

Good faith (law)

License manager

List of software licenses

Shrink wrap contract

Software Asset Management

Software license

Terms of service

Vernor v. Autodesk, Inc.

YouTube Video: The Clickwrap and The Biggest Lie on the Internet

Accessible editorial on enforceability of various EULA-type licenses in the United States from 2002..