An End User License Agreement (EULA) is a contract between the software publisher and the user. It spells out the terms and conditions for using that software. For instance, it might state that the user can only install the software on one computer for personal use — a fairly common stipulation. However, it might also say that by using the software the user agrees to third-party monitoring or to allowing other users to access parts of his/her computer.
Agreeing to a EULA
- clicking an “I accept” button during the installation process
- opening the shrink wrap software packaging
- breaking the seal on the software CD
- mailing a registration card to the software publisher
- installing the application
- using the application.
Why EULAs are Important
- EULAs are legally binding. Some consumer advocates have challenged the legality of EULAs, especially long agreements clouded in complicated “legalese.” The advocates argue these EULAs are a strategy for discouraging careful review and hiding controversial terms and conditions. However, a number of influential court decisions have upheld the legality of EULAs.
- EULAs restrict how you can use the software. EULAs often include clauses that limit the number of computers you can load the software on. They sometimes also prohibit reverse engineering for the purpose of creating compatible software. In some cases they prohibit software testing and even publishing the results of this testing.
- EULAs may force you to agree to certain conditions when using the software. Many software bundles force you to use all bundled components, including software produced by third-party publishers. They may also require you to agree to monitoring of your Internet activity and/or sharing your computer’s resources.
- EULAs can limit your ability to sue for damages. Most EULAs include a clause that says you cannot sue the publisher for any damages caused by using the software.
What to Look Out For
- allow the software publisher or third parties to monitor a licensee's Internet activity
- allow the software publisher or third parties to collect personal information
- allow the software publisher or third parties to use a licensee's computing resources
- hold the licensee to the terms of EULAs governing third-party software components.