Why Should You Care about End User License Agreements (EULA)?

May 3, 2018
Steve Gahr

Author

Steve Gahr

Strategic Procurement Services at SoftwareONE | Linkedin

When was the last time that you actually read a full legal document? If you are not a lawyer by trade, the answer to this question is probably never. However, since technology is constantly evolving to move at a faster pace, when faced with an agreement to accept the terms and conditions of downloading and using software, we often do not take the time to understand what we are agreeing to.

On a personal level, the implications may not have immediate (or even long-term) consequences, but from an enterprise-level perspective, this can’t be a best practice.  It seems a “no-brainer” that organizations should know what they are agreeing to, but in reality, we don’t always read the fine print – even though we know we should.

What is an End User License Agreement (EULA)?

From a user’s prospective, End User License Agreements (EULAs), define the parameters in which a user, or an organization, can utilize an application or software. This definition seems fair at first glance, but is this agreement, in reality, a one-way street?

The other side of the coin is that EULAs often grant permissions that end-users are typically not aware that they have agreed to. One example is if a user were to upload content for storage on a content creation software or service, this content may be included as royalty free and non-exclusive content for the providers to use. Most organizations would never agree to these terms, if they were aware of what was actually involved.

The last point to make in defining EULAs is that the agreement is legally binding. By clicking ‘I Agree’ to the conditional use of any given software or service, you are entering into a contract with publishers and service providers.

The importance of EULAs

How users deploy and consume software has changed today. With this change comes increased complexities in how to purchase software. Most users simply click on accept, when faced with a EULA, without being fully aware of the legal implications to their entire organization and this can be detrimental to an effect Software Lifecycle Management strategy.

There are three key reasons why organizations should take an interest in ensuring that there is a full understanding of EULAs:

  • Protect your financial assets– In understanding the terms of the licensing agreement; organizations can minimize compliance risks and liabilities caused by unforeseen legal problems
  • Protect your core business– In the world of General Data Protection Regulation (GDPR) organizations need to understand who has access to their data, do publishers have legal rights to use your data, and where the data is stored (e.g. in the cloud )
  • Protect yourself and your team– Blindly accepting EULA terms can possibly violate your company’s IT policies. In addition, fully understanding the agreements can help users to avoid exposing trade secrets, because your machine connects to a cloud drive in the background.

What are things that you should review?

Organizations need to understand what they are agreeing to prior to binding themselves to EULA terms and conditions. Below are a few questions that organizations should ask before end users access or install new software or new versions of software at their organization.

  1. Are there third party use right terms?
  2. Warranty (length and terms)?
  3. Auto renewal terms and cancellation rights?
  4. What are the audit terms?
  5. Geographical use right or restriction of use?
  6. Legal name of publisher?
  7. Access to IT (remote)?
  8. Pre-installation terms/duration?
  9. Termination if payment fails?

This list is not exhaustive, however, these are a few of the important questions that organizations need to keep in mind.

How SoftwareONE can help?

Often times organizations would need to work with legal in order to obtain the in-depth review that is often required for new software that is introduced into the environment. Most legal departments are bogged down with other projects, so a full review could often hold up projects that need to adhere to a specific timeline.

Here at SoftwareONE, we are here to help you understand complex licensing agreements and protect your organization from potential pitfalls of agreeing to the terms of EULAs. Contact us if you have any questions, or if you are looking to refine your organization’s approach to managing licensing agreements.

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