3 Reasons Your App Needs an End-User License Agreement

One of the most important things that a software or app developer must think about is how their users will utilise their product. The software, whatever its purpose might be, should be used fairly, legally, and for its intended purposes only. This is why every digital product that is released should have a EULA or an End-User License Agreement. 

 

What is a EULA?

A EULA is a legal agreement between the end-user and the developer or publisher of the application. It is essentially a contract that grants a user the license to use the software or app, presenting important terms, use restrictions, liability limitations, and so on. To that end, it can offer brand protection for the publisher and legal protection if the terms are violated. 

More often than not, the user has to agree to the EULA before installing or accessing the app. 

 

How will my app benefit from a EULA?

We’ve spoken before about the protection a EULA can provide for both your brand and company. In this section of the article, we will talk about these benefits in-depth to give you a better understanding. 

 

1. It gives you control over how your app is used

One of the most common aspects of EULAs is that the user is merely licensed to use the product, but that the user does not own it. If your product is licensed but not sold, you would have far greater control over the distribution and use of your app. Look at the following excerpt from Apple’s EULA:

“The Products Transacted through the Service are licensed, not sold, to You for use only under the terms of this license, unless a Product is accompanied by a separate license agreement…”

It clearly states that the user is only entitled to a fair level of use, as stated in terms. 

 

2. It can help hold abusers of your app accountable

It would be a nightmare for any company to find out that their app has been abused or used for illegal purposes. Some people will be persistent enough to find a way to abuse your app, but you can withdraw their license or even hold them accountable in court should they choose to violate any terms of your EULA. 

Acts such as hacking, spamming, screen scraping, reverse engineering, and so on can be prevented with a tight EULA. Here’s an example of an excerpt of a standard Restrictions on Use Clause commonly found in such documents:

Restrictions on Use. You shall use the Application in accordance with the terms of the Related Agreements and shall not: (a) decompile, reverse engineer, disassemble, attempt to derive the source code of, or decrypt the Application; (b) make any modification, adaptation, improvement, enhancement, translation or derivative work from the Application…”

 

3. It limits your liability

This is perhaps the most important function of a EULA. The document allows you to offload the liability to your user if some dispute happens. It prevents frivolous and expensive lawsuits from being laid at your feet. 

A good example of protection from liability is in case the user manages to break their own device while using your software. Say they overloaded their computer by running too many programs simultaneously, then decided to open your software. The moment they did, their computer crashed and won’t turn on anymore. 

This is clearly not your product’s fault, but if the user agreed to your EULA, this fact would be cemented in the eyes of any court. 

To that end, here is an excerpt from an EULA clause on limited liability:

Limitation of Liability. UNDER NO CIRCUMSTANCES SHALL COMPANY OR ITS DIRECT AFFILIATES, PARTNERS, SUPPLIERS, OR LICENSORS BE LIABLE FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL, OR EXEMPLARY DAMAGES ARISING OUT OF OR IN CONNECTION WITH YOUR ACCESS OR USE OF OR INABILITY TO ACCESS OR USE THE APPLICATION AND ANY THIRD PARTY CONTENT AND SERVICES, WHETHER OR NOT THE DAMAGES WERE FORESEEABLE…”

 

Final thoughts

When developing an app or software, it is important to place no limits to the ways users will misuse or abuse your brainchild. Whether it is intentional or not does not matter. So long as you have the legal protections of a tightly-written EULA, your brand and company are safe. 

If you’re thinking about legal protection for your brand, send us a message at GLG Legal. We have the expertise to prevent your software from being abused and misused.