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What is a software reselling agreement? It is a contract in which a software vendor or rights holder grants a reseller the right to purchase software licenses and resell them to end customers under their own name. The reseller does not become the owner of the software itself, but acquires a position in the licensing chain: the rights holder grants licenses to the reseller, and the reseller passes them on to the customer as a sublicense or via the vendor's license terms. The reseller operates at their own risk and expense and earns a profit on the margin between the purchase and sales price.
The short answer
- What: a contract to purchase software licenses and resell them under one's own name.
- Core: the reseller gains a link in the licensing chain: rights holder, reseller, end customer.
- Object: usage rights to software, usually on-premise or as a term or perpetual license, not physical property.
- Revenue model: margin on the license price, sometimes supplemented with implementation and maintenance.
- Legal anchor: copyright on software (Art. 45j Copyright Act) and the right to grant sublicenses.
What is a software reselling agreement legally?
Software is protected by copyright. Therefore, anyone who uses software does not purchase ownership, but a right of use: a license. Article 45j of the Copyright Act stipulates that the lawful acquirer of a program may perform the actions necessary for the intended use, such as loading and executing. A software reselling agreement regulates how the reseller may purchase those licenses and pass them on to their own customers. Without such agreements, it is unclear whether the reseller is legally permitted to resell the software.
The reseller is positioned in the middle of the licensing chain. The rights holder remains the owner of the copyrights. The reseller acquires the right to grant sublicenses within certain limits, or to contract the end customer directly under the supplier's license terms. The contract must explicitly specify which of these two structures applies, as this determines who the customer holds liable for in the event of a defect and who has the right to revoke the license.
License reseller versus SaaS reseller
A software reselling agreement concerns the resale of licenses for software that the customer installs or puts into use themselves, usually on-premise or via a term license. The customer acquires a right to use a specific program. This differs from the resale of a cloud service subscription, where the supplier continues to run the software and the reseller primarily handles invoicing. License resale revolves around the right of use and the margin per license; with a cloud service, it is about recurring subscription revenue.
The distinction is more than semantics. In the case of license resale, the question of whether a sold copy may be resold (exhaustion of the distribution right) is legally relevant, whereas the situation is different for a cloud service. For the reseller, this determines which rights he can guarantee his customer and whether he may trade second-hand licenses.
What does the contract state?
- Scope of the right: which software, which license types, exclusive or non-exclusive, and for which territory.
- License chain: may the reseller grant sublicenses, or does the customer contract under the supplier's EULA?
- Purchase price and margin: tiers, discounts, and the reseller's freedom to determine their own selling price.
- Trademark usage: how the reseller may use the supplier's name and logo.
- Maintenance and updates: who provides updates and whether the reseller also provides support.
- Liability: who the customer holds liable for in the event of a defect and which exclusions apply.
- Termination: what happens to existing licenses if the collaboration ends.
One point of attention is freedom of price. The supplier may provide recommended retail prices but may not impose a fixed resale price on the reseller. This is prohibited under competition law. In principle, the reseller determines their own selling price.
A practical example
An IT company with ten employees sells accounting software to SME clients. It enters into a reselling agreement with the software supplier and purchases licenses at a forty percent discount. The company installs the software at the client's premises, invoices the client directly, and provides first-line support. The contract states that the IT company may grant sublicenses, that the supplier provides updates, and that current licenses remain valid for twelve months after the termination of the partnership. When a client complained about an error in the software, the IT company was able to escalate the matter to the supplier because the division of roles was clearly defined.
Honest recommendation
You do not need a lawyer to understand what a software reselling agreement is, and for a simple, non-exclusive resale of standard licenses, the supplier's standard contract is often sufficient. Pay particular attention to whether the licensing chain, trademark usage, and pricing freedom are correct. Have a lawyer review the contract as soon as more is at stake: an exclusive territory, your own sublicenses, combined maintenance, or liability towards your customers. In such cases, the quality of the contract determines whether your margin is safe and whether you will end up paying for defects in someone else's software.
Want to know more? View the software reselling agreement on our contracts page, read how to drafting a software reselling agreement , and what it costs to have a software reselling agreement drafted.
Frequently Asked Questions
A contract in which a software vendor grants a reseller the right to purchase software licenses and resell them to end customers under their own name. The reseller does not become the owner of the software but acquires a position in the licensing chain and earns a share of the margin.
No. Software is protected by copyright and is supplied under license. The reseller acquires rights of use and resale, not ownership of the copyrights. The rights holder remains the rights holder (Article 45j of the Copyright Act governs use by the lawful acquirer).
In software reselling, you sell licenses for software that the customer uses themselves, often on-premise. In a SaaS reselling agreement, you resell a subscription to a cloud service that the supplier continues to operate. The former revolves around usage rights and margin per license, the latter around recurring subscription revenue.
Only if the contract permits it. The right to grant sublicenses must be expressly granted by the rights holder. Otherwise, the end customer contracts directly under the supplier's license terms, and you are only the selling party.
No. Imposing a fixed resale price is prohibited under competition law. The supplier may provide recommended prices and maximum prices, but the reseller, in principle, determines the selling price to the end customer themselves.
That depends on the structure. If you grant sublicenses yourself, the customer will hold you liable, and you will want a recourse option against the supplier. If the customer contracts under the supplier's EULA, liability for the software lies with the supplier. Document this explicitly.
The contract must regulate this. It is common practice for licenses already sold to remain valid for the current term and for agreements to be made regarding updates and support after termination. Without such an arrangement, your customers could suddenly find themselves without a valid license or maintenance after the term expires.
