Software License Agreements: Key Terms and How to Negotiate Them

61 questions on software license agreements, answered and cited by the UpLaw editorial team.

• Are trademark licenses protected when a licensor goes bankrupt?
• Does an exclusive software license have to be in writing?
• Does § 365(n) protect a pure SaaS subscription?
• Does UCC Article 2 govern a software license?
• How can a license grant that looked fine at signing quietly become a breach?
• How does a license differ from an assignment?
• How does a standard limitation of liability clause work?
• How does source-code escrow work?
• How do the cap and the carve-outs play out in a real incident?
• How much downtime does each service-level tier actually permit?
• How should a customer draft the grant to accommodate affiliates and contractors?
• How should a customer negotiate a vendor audit clause?
• How should a master agreement handle click-through terms inside the product?
• How should a vendor draft a restriction so it carries copyright teeth?
• How should each side draft around the failure-of-essential-purpose problem?
• If implied warranties are disclaimed, what should the customer demand in return?
• Is a contractual ban on reverse engineering enforceable?
• What API and integration terms should a customer negotiate?
• What are the common pitfalls in software license negotiation?
• What are the five dials of a software license grant?
• What are the four negotiating principles for a software customer?
• What are the trade-offs between subscription and perpetual licensing?
• What are the two flavors of cloud escrow?
• What breach-notification window should a customer negotiate?
• What data-portability terms decide whether a customer can actually leave?
• What did MDY v. Blizzard hold about converting a license breach into infringement?
• What does each adjective in a vendor-favorable license grant actually do?
• What does it mean for a limited remedy to “fail of its essential purpose”?
• What does UCC § 2-719 permit and prohibit in a liability clause?
• What happened to UCITA, and what filled the gap?
• What industry overlays reshape a standard software agreement?
• What is a service credit, and why is it not enough on its own?
• What is the difference between a covenant and a condition in a software license?
• What is the fight over a vendor's license to use customer data?
• What is the hazard in usage-based software pricing?
• What is the single most important thing a software customer can negotiate?
• What is the three-step remediation ladder in an IP-infringement indemnity?
• What must a customer verify before paying for an exclusive software license?
• What open-source protections should a customer negotiate?
• What protection does 11 U.S.C. § 365(n) give a software licensee?
• What should a customer scrutinize in an SLA's exclusions?
• What should a data processing addendum cover?
• What should a security provision in a SaaS agreement specify?
• What should a software agreement say about AI and machine-learning components?
• What warranties should a software customer secure?
• What was the Lubrizol problem, and how did Congress fix it?
• When are online “wrap” terms enforceable?
• When does copyright law permit reverse engineering despite a license restriction?
• When should a customer negotiate renewal price protection?
• Which indemnity carve-outs are dangerous for a SaaS customer?
• Which liability carve-outs should sit outside the cap?
• Who owns data derived from customer data in a SaaS deal?
• Who owns IP created during a custom-development engagement?
• Why are software warranty disclaimers written in all capital letters?
• Why does open source matter in a proprietary software license?
• Why does the IP-infringement indemnity carry so much weight?
• Why do software agreements say “licensed, not sold”?
• Why do vendors insist on audit rights?
• Why is a software agreement a license rather than a sale?
• Why is “Customer owns the deliverables” an empty recital without an assignment?
• Why is traditional escrow a poor fit for SaaS?