User Agreements: What Are They? Do You Need One?

August 24, 2019 7:48 am.

User Agreements: What Are They? Do You Need One?

Businesses use technology that continues to evolve. Whether your business provides goods, services, or both, it’s likely that your employees and your clients will access or use certain programs provided by your business. While you’ve likely heard the term user agreement or end user licensing agreement (EULA), you may be wondering what, exactly, a user agreement is and whether your business needs one. As a software licensing attorney in Denver, Colorado, Susan Larsen of Larsen Law Offices, LLC, strives to help businesses understand what a user agreement is and why it is important to their business. Although, every business using a user agreement may have similar components, they are often customized for the needs of the business. Although you’ll learn about the basic components of a user agreement, keep in mind that the terms for your business may be different than what you read about here in this post. If you have questions or if you’re ready to start drafting your user agreement, call Larsen Law Offices, LLC at 303-520-6030.

What Is a User Agreement?

At its core, a user agreement explains how the use of the software or the program is licensed. It explains how the software or program may be used, the intellectual property (generally, copyrights and patents) in place to protect the software, whether there are warranties, the rights of the user, limitations of the software, whether the user’s rights to the software may be transferred, update and maintenance procedures, how and when the user agreement may be terminated, and a liability waiver that helps protect the business in the event that the user is damaged in some way by using the software. In short, it’s a contract that reads “You can use our software under the following conditions…”

Do You Really Need a User Agreement?

The short answer is yes. If your business use proprietary software used by employees or contractors, provides software or apps for purchase or use by the general public, you provide a private area on your website (often known as “members only” or “client login”), your website includes a forum where people can make and reply to posts, you own an online platform that provides people with the ability to buy and sell items or services, or if you rely on any sort of e-commerce, you need a user agreement. There are other scenarios that would also require a user agreement as well, but those are the most common ones.

We know what you’re thinking: everyone just clicks “I Accept” or “I Agree,” so what’s the real purpose behind having one? It’s not like anyone ever reads them! And, you’re right that very few people actually read the user agreement before accepting its terms. However, the purpose of a user agreement is to help protect your business by explaining how your software works, how it should be used, explains your copyright or patent, and helps limit your business from liability. It’s also important for the user even if they don’t actually read the agreement because it explains their rights as a user. Do they have the right to free updates? Do they have the right to reproduce and distribute the software? If they have the right to reproduce and distribute it, what are the limitations of this? Do they have the right to install the software on an unlimited number of devices? If they don’t, how many computers or devices is covered by one user agreement?

How a Software Licensing Attorney Can Help You Draft a Better User Agreement

With all of the boilerplate user agreements available online, is it really necessary to use a software licensing attorney? We have found that just like how most users do not read the user agreement before accepting it, most business owners don’t fully read a boilerplate agreement. Those that do may not truly know the scope of the protection provided by the agreement.

A user agreement is a contract. While contracts do have some basic components regardless of the state where a business operates or offers software, there are still certain laws and regulations that cover certain aspects of the agreement in every state. What does this mean for you? It means that while you may be able to find a boilerplate user agreement online, it may not be the right one for your needs. A software licensing attorney can draft a better user agreement that clearly explains the rights of the user and how the software may and may not be used. It is written with the best interests of your business in mind. It’s a professionally written contract that may even become a boilerplate user agreement in the future if your business creates other software or apps for use.

Is It Necessary for User Agreements to Be Long and Complicated?

One reason many people do not bother to read the user agreement is because of its length. Is it necessary to have a user agreement that’s long and complicated? The answer isn’t as easy as a “yes” or a “no.” The length of a user agreement depends primarily on the needs of your business and the rights and protections of both your business and the end user. As a software licensing attorney, Susan Larsen understands the importance of explaining the terms in a way your users will understand while also using the proper clauses to protect your business and your software.

Learn More about User Agreements for Your Business

If you’re interested in learning more about how a properly drafted user agreement can help your business, call Larsen Law Offices, LLC at 303-520-6030. With more than 30 years of experience, we’re here to help businesses develop a user agreement that is functional. We can also help your business by drafting boilerplate agreements for your future use. At Larsen Law, we’re here to help!