Understanding EULAs by Jonathan Layton, J.D.

Understanding EULAs

An end-user license agreement (EULA) is a mechanism for a user to agree that the use of another's app, product, or concept does not transfer any ownership interest to the user.

by Jonathan Layton, J.D.
updated September 02, 2021 ·  3min read

Chances are, you signed an end-user licensing agreement (EULA) without reading it. By accepting the EULA's terms and conditions through your digital signature, you agreed to be bound by a host of provisions inserted into the EULA by the app's creator as a condition of your use of the app.

man in grey sweater playing on his phone

Protection for Apps

Almost everyone owns some type of mobile device—like a cell phone, smartphone, laptop, or tablet—that provides almost unlimited access to an wide array of apps that can be used to do everything from scanning a document or playing a game to ordering products online. To use an app, you simply download it to your mobile device.

For business owners, an app can serve as an effective marketing tool to increase brand awareness, capture new customers, and boost sales. App creators have an incentive to require its “end users"—customers who download the app—to sign a EULA as a condition of using the app. Because the app's creator has more to lose than the customer does if the app becomes the subject of unauthorized use or infringement, creators will insist on a EULA, in part, to limit the scope and duration of the customer's use of the app. In exchange, end users receive permission—that is, a license—to use the app for their own purposes. It's a win-win for both sides.

What Are EULAs?

In general terms, a license is a form of permission granted to use something—in this case, an app. Whereas the creator of an artistic work may seek formal protection against unauthorized use or infringement by applying for a patent, trademark, or copyright, in the case of a license, it is end users who actually “apply" to have the app's owner issue them a license to use the app.

At their core, license agreements are designed to protect the creator of a product or inventor of a concept from having their intellectual property stolen or subjected to unauthorized use or infringement by others.

A EULA is typically an agreement between a company that has invented a product or created a concept and the end user who seeks to use the product or concept. Rather than sell the product or concept to the end user, the app owner (or vendor) requires the end user to sign an agreement—the EULA—as a condition of accessing and using the product or concept, normally for a limited period of time and subject to a limited scope of use.

The EULA does not represent a legally binding contract but, instead, an agreement that the end user will adhere to the fundamental usage requirements and specific terms of the EULA. In reality, the consumer is actually renting (or leasing) a license from the app's creator (or a vendor). After digitally signing the EULA (or hitting the “I accept" button), the customer can then install the app software.

Typical EULA Terms and Conditions

The EULA contains requirements for end users to limit where, how often, and under what conditions they will use the app. Specifically, in agreeing to the terms and conditions in the EULA, the user is indicating that they understand that they may not, nor will they permit others to:

  • Copy, adapt, transfer, display, amend, modify, or distribute the intellectual property of the owner or any other confidential information
  • Reverse engineer the intellectual property
  • Assign, sublicense, or transfer the right to use the app to a third party
  • Lease, rent, or publish the app
  • Use the intellectual property or correlated confidential information to develop or create comparable software that competes with the app
  • Obscure, remove, or delete any proprietary notice created by the owner
  • Use the app for any commercial purpose

While the EULA grants the end user permission to access and use the app, if any of the terms and conditions of the EULA are violated, the agreement and any rights granted to the user are immediately and automatically terminated without notice to the user, the license is revoked, and the consumer is forbidden from using the app in the future.

Despite the threatening language used in the EULA, as long as you use apps as they were intended—such as to manage your money, communicate with others, or follow an event schedule—it's unlikely you will violate the agreement you signed.

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Jonathan Layton, J.D.

About the Author

Jonathan Layton, J.D.

Jonathan Layton is a graduate of The College of  William and Mary, where he majored in English literature. While in coll… Read more

This portion of the site is for informational purposes only. The content is not legal advice. The statements and opinions are the expression of the author, not LegalZoom, and have not been evaluated by LegalZoom for accuracy, completeness, or changes in the law.