A software license agreement is either a manual or electronic memorandum of a contractual agreement between the producer of software and the end user, granting to the end user a software license to use the software legally. The user can be either a legal entity or an end user and sometimes the agreement is called the end user license agreement. This contract will clearly state all the parameters of the various permissions given to the end user. In case the software license agreement is between the software producer and a business or government undertaking some special clauses are included relevant to the agreement which are unique for the licensed software.



Very often, the agreement comes shrink wrapped with the product prior to installation of the software. If the user agrees to the terms and conditions, as stated in the agreement, he or she may continue with the installation and use of the software product or else he or she may refuse the product and thus not use the software. Mostly, users do not take the trouble of reading all the clauses of the software license agreement and just click on ?Accept? and begin using the software anyway. This is because of the great depth of detail held within the license agreement. The enforceability of such agreements is open to debate, especially in the United States.

The copyright laws governing making backup copies of the purchased software allows the owner of the software to make copies for the intention of backup purposes only. However, there are various interpretations to this and a certain amount of ambiguity in this regard allows end users to make copies for purposes other than merely backing up their software.

The majority of the purchased software is liable to perform as per specifications but mostly the agreement disclaims any warranty and limits any damages to just the cost of the software. In addition, some agreements prohibit the use of any reverse engineering in order to protect their trade secrets.

In the world of computers, copyrighted software sold is of two types, namely open source/free software and closed source/proprietary software. It may be added that not all software is copyrighted. There is also one other type of software that is called ?abandonware? software. This is a type of software that is not being sold or supported by its copyright holder. This means that though this software is still available in the market its support and development has ceased and that it is not actively being protected, represented or supported.

Using box wrapped software implies that once the wrapper has been opened the user is giving their assent to the software terms contained within. This type of agreement is termed as ?click-wrap agreements?. The popularity of click-wrap agreements is increasing since it allows the user to read the terms and conditions prior to accepting them. It has also been found to be legally enforceable in the United States with courts generally upholding such contracts. A prime example of click-wrap agreements is Hotmail, the email program sold by MSN.

There is also a distinction between personal and commercial use of the software. Personal use implies that the software is being used in one's personal capacity while commercial use implies that the software is being used to obtain commercial or monetary gain from use of the software.