What happens if an EULA is violated

What is an End User License Agreement (EULA)?

End User License Agreements (EULA) are probably the most frequently concluded, but least read, contracts in the world. Let's be honest: Usually the average software user just impatiently presses the button or the checkbox for “I have read and I agree…”, right? We explain here whether this is a good idea or whether it is perhaps worth taking a look at the EULA.

 

 

An end-user license agreement usually applies to different types of software and not to physical goods, although it can also apply to non-software products. It is used for one-time-sale products (not for subscriptions). He creates an agreement between the software developer or company, the licensor or seller and the consumer regarding the use of the software.

 

What are End User License Agreements?

The EULA is a contract that gives a person or company the right to use software in certain ways (usually after paying for it). The term "use" is important here. Because: EULAs do not grant any ownership rights to the software. The creator retains control and ownership at all times, as the software is his intellectual property (IP).

In the past, the EULA was usually a “weld-in license”. Consumers had to buy the software and then first open the shrink-wrapped packaging to get to the software and the printed terms and conditions and restrictions on use.

 

This was fraught with legal issues as consumers could not read the EULA before purchasing the software.

 

Nowadays it is more common to download software directly from the web and to complete transactions online. The EULAs must be approved before the installation can be completed. Typically, this requires the consumer to click an “Agree” button on the screen. Most of the time there is also a link to the EULA and other conditions - and when the transaction is concluded, you agree to these conditions and contracts.

 

As a result of the move to online software purchases and users' digital consent to the terms, the EULA has become known as the "Click-Wrap" license. This means that if the consumer does not agree, he or she cannot use the software or buy the product. We now agree to EULAS on computers, telephones, tablets or game consoles - in principle on every device running software.

What is the purpose of EULAs?

The EULA specifies:

 

  • Who is the creator / owner
  • Who the user is
  • What rights the creator and the user have with regard to the software
  • How the user can / can use the software
  • Circumstances under which the user license may be restricted or revoked
  • Rights of recourse by the author if the user violates the EULA
  • Exclusions or limitations of liability for the creator

 

The EULA is usually created by the software manufacturer or distributor. The crucial role of the EULA is to protect the rights of the author and to set rules and expectations for user behavior and software use.

 

The EULA defines what the user can and cannot do with the software. For example, download, install, and play the game? Yes. Copy the game? No. Install updates or fixes provided by the manufacturer? Yes. Modify or reverse engineer the game? No.

 

The EULA defines the rights of the manufacturer in relation to the software if the user violates the terms. As a rule, manufacturers are also released from liability if the software causes damage. The user essentially agrees to use the software at their own risk.

 

Sometimes EULAs specify how the software must be used. For example, the user must agree to use all parts of the software or he must agree to accept automatic updates for the software.

What should be in EULAs?

In general, an EULA contains the following:

 

  • Identification of the business
  • Rules for using and accessing the software
  • Use restrictions
  • applicable copyright license (e.g. proprietary, open source, etc.) and IP rights
  • Disclaimer of Warranties and Limitation of Liability
  • License Termination Terms

 

The main goal of EULAs is that the creator / licensor retains full ownership of his product and that no legal problems arise. However, should a legal problem arise, the EULA should also help to resolve the issue.

 

An EULA can also contain these or other clauses:

 

  • Introductory section that explains who and what the contract applies to
  • Assistance on how to return the software if you do not agree to the terms
  • Reference to other licenses or agreements that are applicable in connection with the EULA when using the software
  • Differentiation between different forms of access or use, e.g. B. Multiple user / account levels
  • Conditions for trading or selling between users via the software and payment facilities
  • Consumer privacy rights and disclosure of data usage
  • specific definitions relevant to the software or its use
  • Applicable law, e.g. B. Does only United States law govern the terms of the EULA?

In short, the creator / licensor of a software product who:

 

  • want to keep control of their technology
  • would like to be protected against possible misuse of the product
  • want to earn money licensing the software

 

It can be an individual, but in many cases it is a company.

The EULA can protect the software manufacturer on two fronts. Primarily in the agreement with the end user, but also in the relationship with third parties, such as app platforms through which the software is accessed.

What happens if an EULA is violated?

Since EULAs are usually click or browse agreements and not shrink-wrap agreements, there is a little less room for interpretation as to their enforceability. You have to explicitly agree to the EULA before you can install or use the software. So you can't argue that you didn't know the terms of use before accessing the software.

 

An EULA does not contain some of the typical requirements that make a contract legally binding. However, that does not mean that they are not enforceable. It can also be a legal question whether a breach of an EULA constitutes a breach of contract or a copyright infringement, since EULA under German law are more likely to be regarded as general terms and conditions.

 

Terms and conditions are contractual terms that are pre-formulated for a large number of contracts and that one contracting party, namely the user, provides to the other contracting parties when concluding a contract (Section 305 I BGB).

 

The most common problem in the context of EULAs is that they are usually only provided after the purchase and it is therefore a matter of dispute whether and to what extent they are effective. However, EULA in Germany are subject to the content control of the terms and conditions, according to which clauses in particular could be ineffective that unreasonably disadvantage the signatory.

The limited scope of the EULA

EULAs are intended to define the obligations of users. They are not really given choices. EULAs also lack contract specifics, such as B. addressing identifiable buyers or setting a time frame for the purchase. You can also violate federal or state laws.

 

If a user copies and sells the software, for example - a common breach of EULA terms - the manufacturer can seek redress. The license to use the software can be revoked. The user's account can be locked out to prevent access. The creator can sue for damages.

 

Even if the license to use the software has been revoked, the user can still access things that were created with the software, such as: B. Pictures or videos, as long as they were not saved exclusively in the now blocked account.

Can an EULA be bad for users?

Some provisions of EULAs may be of concern about user privacy. Some software includes monitoring for digital rights management (DRM) violations. Or requires the user to consent to automatic monitoring. Both of these require the software to access the users' systems and connect to third-party networks, usually without notifying the user. Learn more about personally identifiable information.

 

There is no way for users to know how safe these third parties are, how much user data they can access, or what they could do with it. Some EULA agreements allow third-party software to be downloaded onto users' devices without the need for separate agreements or consent.

 

Some EULA terms preclude users from publicly criticizing the product. This can mean that the user cannot publicly complain if the software is not working or causing damage.

 

It can also mean users are checking the results of tests such as: B. performance comparisons, are not allowed to pass on. Or even that public discussions about the software, such as B. independent test reports are not allowed. Whether this violates the right to freedom of expression is under discussion.

 

United States federal law allows "reverse engineering" of software and physical products. It is legal to take things apart to learn how they work and is considered "fair use". However, reverse engineering is usually prohibited by EULAs.

 

This means that products cannot be adapted to the preferences or needs of the user, which could include improved accessibility for people with disabilities. Upgrades that could stimulate further innovation and competition are also not allowed.

Users may not be able to repair defective software even if the creator introduced bugs. You cannot turn off features or functions that you do not need or want or that are causing problems. You cannot make the software interoperate with other software or devices that they own.

 

EULAs usually require that the software be used as it is, even if that state is faulty, out of date, or incompatible. In combination with the exclusion of warranty and the limitation of liability, such EULAs are definitely to the benefit of the creator, not to the benefit of the user.

EULA vs. other agreements

The End User License Agreement can go under several other names:

 

  • License agreement
  • Software license agreement
  • Shrink-wrap / Click-wrap / Browse-wrap license
  • End User License Agreement for the Licensed Application

 

There are agreements that are similar to EULAs, such as: B. Terms of Service (TOS) or Service Level Agreements (SLA). They are often used in conjunction with EULAs. If there is no licensing, then only TOS and no EULA are required.

Terms of Service can also have a number of other names:

 

  • Terms
  • Terms of Use
  • Terms and Conditions (T&C)
  • User Agreement

 

An Acceptable Use Policy can be part of the TOS or a separate agreement. There may also be terms of sale and / or guidelines for user-generated content, depending on what the website, product or service is about.

 

Terms of use are similar to an EULA in that they define how a user can use a service. But instead of covering software, the TOS cover websites, content and services.

Terms of Service are the basis of a legally binding contract that is concluded between a company and a user. Like an EULA, they help to avoid or solve legal problems that result from the (incorrect) use of the product. The TOS cover a lot more conditions than an EULA, which is why an EULA often refers or links to the TOS.

 

Users typically need to agree to the TOS before signing up for an account on a website or making an online purchase. They typically include the following:

 

  • What it is i.e. a contract / agreement
  • Who they include, typically a company and all relevant parent, subsidiary or affiliated companies as well as the users
  • How to register for an account
  • What the user can and cannot do with their account
  • How users can interact with each other through the website or service
  • Under what circumstances an account can be terminated
  • Disclaimer of liability with regard to the information published on the website or which can be accessed by clicking on links to third parties
  • Applicable law and place of jurisdiction
  • The company's contact details in case of questions or problems

 

A Service Level Agreement (SLA) is another contract, and it is common to have an SLA along with the terms and conditions. SLAs can be even more detailed than a TOS. They define service levels when customers need consistency and reliability, and guaranteed support and recourse when service does not meet the first two criteria.

EULAs have become so commonplace that we rarely think about them. However, they have a significant impact on the use of software and can also violate data protection laws. If you understand how EULAs are structured and for whose benefit they are formulated, you can get better information not only as a consumer but also as a company.