Software License Agreements: What You Should Know

Many people mistakenly believe that when they purchase a software product such as Microsoft Office or Roller Coaster Tycoon that they are purchasing the actual software product, but this is not so. Instead, you are purchasing a license to use the product, as per the provisions included in the software license agreement.

This means that you do not have full rights to use the software product as you wish, but that you can use it within the parameters dictated by the software manufacturers. For example, most software licenses (unless purchased otherwise) are for private use, which means that you can use it in your home or office, but that you cannot use it on a room full of computers at a school. There are specific software licenses that are more expensive and can be used for public or commercial use.

The reason why most people don’t understand this is because they don’t read the information that comes with the product when they purchase it. In most cases, the software license will be included in the box or CD case when you open it up.

A software license, in most cases, does not need to be signed by the purchaser. By purchasing the product online or in a retail store, you consent to the software license included in the product, and you do not have the ability to use it in any prohibited fashion. This is often called a shrink wrap license, as it is attached to the product and is non-negotiable.

Breaches of software license agreements are typically costly, especially with a widely used product such as Microsoft Office. You should always make sure to read the software license carefully to be sure that the intended use is covered by the license of the software.

At-home use of software is usually not an issue when it comes to software licenses. Most people don’t have any reason to breach the software license agreement, so it never becomes a point with which they are concerned. However, if you own a large business and are purchasing software for the use of that business, license agreements become a whole new ball game.

If you purchase a software product for which the terms of use are not adequate for your business, then you stand to lose a lot of money. Make sure to cover the following points when purchasing software licenses:

– Is the covered use of the license sufficient to accomplish whatever task it is meant to complete?
– Are the representations and warranties that cover software functionality expressly stated and clearly understood for the purpose of its use?
– Will the licensor provide quick and adequate technical support should anything go wrong with the software product?
– Are you, the licensee, indemnified from liability when it comes to third-party infringement issues?
– Are all of the costs and prices disclosed at the time of purchase, and are they acceptable for the use of the software license?
– Are the prices of upgrades, recalls and troubleshooting favorable?
– Will the length of the license (in terms of years) be appropriate for the use of the software license?

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