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An end-user license agreement (EULA) is a license that gives a user the right to use a software application in some manner. EULAs are designed to enforce specific software use limitations, such as only using the software on one computer. By entering into the agreement, the user is given permission to use and benefit from the software.
An EULA for downloaded software is also referred to as click wrap - as opposed to shrink wrap. This comparison is made because older EULAs were in paper form within the packaged product, which was not accessible until the consumer opened the shrink wrap.
Downloading a software application usually involves reading and agreeing to a user license before being allowed to download it. A user must agree to this type of licensure before installing the correlating software, which is considered the software vendor’s intellectual property. The EULA contains requirements for program users restricting how often and where they will use it, and under what conditions.
Once a software installer is open, the software EULA must be digitally signed. Otherwise, the software installation cannot be completed.
EULAs are not legally binding contracts. The vendor seeks the customer’s agreement to the basic usage requirements prior to installing the software. When a consumer agrees to the specified terms of an EULA, the consumer is actually purchasing, or renting, a license from the software vendor. After doing so, the consumer can move forward with product installation.
The caveat of EULAs is that they do not protect the consumer, only the copyright owner. Consumers must never assume that their rights are protected by signing an EULA. In fact, the software vendor owns the license, and also legally owns the user's private data entered into the software. Software providers may access private consumer data at any time, as well as read it or share it as they please. This has EULA opponents troubled, to say the least. Thus, EULAs are not designed to be any kind of warranty. The benefits of EULAs definitely fall on the side of the owners, not the users. Other than this often overlooked privacy issue, EULAs are advantageous to copyright owners to prevent the copying of their work.