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How to Write End User Agreements

by Adriana Iordan, www.avangate.com

Whenever you install software on a computer, you will have to face the inevitable: agreeing to the EULA (End User License Agreement). But how many of us really go through all those paragraphs teaming with legalese?

The percentage of software users that actually read the terms of any license agreement is rather low, mainly because these agreements are too stuffy and, most of the times, almost incomprehensible for the average-educated software user.

Also, there's the common belief that all EULAs are practically the same, so users just skip reading them and go straight to ticking the "I Agree" checkbox and pressing the "Next" button. For that reason, many software users are confronted with usually unpleasant situations that could have been avoided, should they have read the EULA beforehand.

Such situations have generated huge waves of discussions on the topic of possible improvements that can be done in terms of software license agreements that can make them more appealing to end users and even put software companies in a better light.

What is the EULA?

The EULA (End User License Agreement) is, as its name shows it, a contract between the software developer and a potential user. By means of this contract it is established that the developer of the software is its de facto owner, and that a copy of the respective software bought from a vendor (or downloaded from the Internet) only licenses it to a user, and does not transmit any intellectual rights whatsoever on the software.

The end user is only allowed to use it as long as certain terms are respected, and is also prohibited from any alterations or uses of the software without the specific consent of its rightful owner, the software company/developer.

End User License Agreements can be presented in two forms. One is the so-called "shrink-wrap license". This type of license is usually met in the case of packaged products, when a label clearly states that tearing-open the package or breaking the seal automatically means that the buyer/user accepts the EULA found inside the package, even before reading it. The other type is the "click-wrap" / "click-through license", which is available to the user while installing the software. In order to continue the installation of the respective software, the user must check an "I Agree" box.


As mentioned before, most software license agreements are similar. They share similar terminology, as well as similar structures. Following are the most important four parts of a EULA: