Anatomy of a Software License Agreement: A Comprehensive Guide

42 questions on anatomy of a software license agreement, answered and cited by the UpLaw editorial team.

• Are open source license terms legally enforceable?
• Are shrink-wrap licenses—terms inside the box—enforceable?
• Can a change-of-control clause block my company's acquisition?
• Can a software contract prohibit reverse engineering, or does copyright preempt that?
• Can I legally resell software I bought but no longer use?
• Can using open source software force me to release my own proprietary source code?
• Does the UCC govern a software license?
• Do I actually own the software I paid for?
• Do terms delivered after payment always bind the buyer?
• If a SaaS provider goes bankrupt, is my access to the software protected?
• Is a SaaS arrangement a software license or a service contract?
• Is clicking “I Agree” really a binding contract?
• What are software audit rights, and how can over-deployment become copyright infringement?
• What are transferability and sublicensing rights in a software license?
• What does a limitation-of-liability clause do?
• What does a territory clause do in a software license?
• What does “internal business purposes only” restrict in a software license?
• What does it mean when a software agreement disclaims implied warranties “AS IS”?
• What happens to my data when a SaaS contract ends?
• What is a field-of-use restriction in a software license?
• What is an IP indemnification clause, and what should it cover?
• What is a service-level agreement (SLA), and are service credits my only remedy for downtime?
• What is source-code escrow, and do I need it?
• What is the difference between a condition and a covenant in a software license?
• What is the difference between an exclusive, sole, and non-exclusive software license?
• What is the difference between a perpetual license, a subscription, and SaaS?
• What is the difference between clickwrap, browsewrap, and sign-in wrap agreements?
• What is the difference between permissive and copyleft open source licenses?
• What is the difference between updates and upgrades in a maintenance and support agreement?
• What is the first-sale doctrine, and how does it apply to software?
• What is the “grant of license” clause, and why does it matter more than any other sentence?
• What is the Vernor v. Autodesk test for whether a software user is a licensee or an owner?
• What liabilities should a licensee negotiate out of the liability cap?
• What pricing metrics do software licenses use, and why does the metric matter?
• What survives the termination of a software license?
• What warranties does a software vendor typically provide?
• When does a “by continuing you agree” sign-in wrap actually bind the user?
• When will a court treat a “license, not sold” label as an actual sale?
• Who owns the data in a SaaS agreement, and can the vendor use it to train AI?
• Why do courts usually refuse to enforce browsewrap agreements?
• Why does merely using software require a copyright license?
• Why is software licensed instead of sold outright?