MKB Juristen drafts custom legal documents
It is best not to cobble together or copy important contracts, terms and conditions, and other legal documents yourself. We help entrepreneurs on a budget with customized legal solutions, clear costs upfront, and practical explanations.
- Custom contracts, terms and conditions, and legal documents
- Budget-friendly and clear about the costs upfront
- Request a free consultation or a no-obligation quote
What is an EULA software license? It is the End User License Agreement between the software supplier and the end user, stating the conditions under which the user may install and use the software. The user does not purchase the software, but receives a license: a right to use a program that remains protected by copyright. For desktop and on-premise software (which you install on your own computers or servers), the EULA primarily determines which licensing model applies, on how many devices or users you may run the software, and what happens regarding updates and termination.
The short answer
- A software license EULA is the user agreement between the software supplier and the end user.
- The user receives a license, not ownership; the copyright remains with the supplier.
- The licensing model determines on how many users or devices you may run the software.
- The EULA governs prohibited use, updates, liability, and termination.
- You cannot completely contract away statutory user rights under the Copyright Act.
What exactly is an EULA software license?
Software is a computer program and is therefore protected by copyright pursuant to Article 10, paragraph 1, sub 12 of the Copyright Act. Consequently, anyone using software may not simply copy, modify, or distribute it. The EULA translates that copyright into concrete agreements: what the user is allowed to do, what they are not, and under what conditions. Without an EULA, only the statutory basic rules apply, and these leave unregulated much that is precisely important for a software supplier.
With on-premise and desktop software, the software runs on the user's own devices, out of the vendor's sight. This makes the EULA particularly important: it is the only instrument with which the vendor sets limits on usage. With software as a service (SaaS), this shifts partly to the terms of service, but for installed software, the EULA is the core element.
Licensing models: where is the difference?
The heart of an EULA for installed software is the licensing model. This determines how you count and bill for usage:
- Per device. The software may run on a certain number of computers or servers.
- Per named user. Each named individual has their own license, regardless of the device.
- Concurrent use (floating). A fixed number of users may work simultaneously from a shared pool.
- Perpetual or subscription. A one-time purchased license versus a recurring subscription with updates.
The chosen model determines not only the price but also what is and is not permitted. If the customer runs the software on more devices than licensed, this constitutes an infringement. A clear description of the model prevents disputes and enables an audit.
The limits of what you may prohibit
An EULA can prohibit much, but not everything. The Copyright Act grants the lawful user of software rights that cannot be taken away contractually. Under Article 45j, the user may perform the actions necessary for the intended use, including correcting errors. Article 45k permits the creation of a backup copy when necessary for use. Article 45n permits decompilation under certain conditions to achieve interoperability with other programs. A clause that completely excludes these mandatory rights under Articles 45j through 45n is invalid to that extent. With on-premise software, where users reside deeper within the system, this arises more frequently than with protected consumer software.
The EULA and the GDPR
If the software processes personal data, for example because it is a CRM or HR package, the General Data Protection Regulation (GDPR) applies. The EULA governs the right to use the software; data processing is regulated separately. If the software runs on-premise at the customer's location, the customer is often the data controller. If the supplier also provides remote maintenance or hosting, a data processing agreement may be required. Align the EULA accordingly so that it is clear who is responsible for what.
A practical example
An SME supplier sells an installed inventory program to stores. The first version of the EULA only states that the customer may use the software, without a licensing model. A customer subsequently installs the package on fifteen workstations, while payment was made for five. Because the model was not described, the infringement is difficult to prove. The supplier amends the EULA to include a clear model per device, an audit right, and a prohibition on use beyond the licensed number. With new customers, the scope is immediately clear.
Honest recommendation
You do not always need a lawyer. For simple software with a small number of users, a clear revenue model, and without the processing of sensitive data, you can often manage with a proven standard model that you fill in yourself. In that case, a custom EULA is unnecessary.
Have an EULA drafted as soon as your software features a distinct licensing model, is business-critical, is being rolled out on a larger scale, or processes personal data. The risks lie in a vague licensing model that makes infringement difficult to prove, prohibitions that violate statutory user rights under Articles 45j through 45n of the Copyright Act, and inadequate alignment with the GDPR. A lawyer familiar with software contracts will prevent you from using a model that would not hold up in the event of a dispute.
If you want to know exactly what needs to be included, read drafting an EULA software license. If you are considering outsourcing, check out having an EULA software license drafted. Need a license immediately? View our EULA software license.
Frequently Asked Questions
It is the user agreement between the software supplier and the end user, stating the conditions under which the user may use the software. The user receives a license, not ownership; the copyright to the software remains with the supplier.
The number of computers is counted per device; per named user, each individual is counted; with concurrent use, a fixed number of people from a pool work at the same time; and a perpetual license is a one-time purchase as opposed to a recurring subscription. The model determines the price and what is permitted.
No. The Copyright Act grants the lawful user rights that cannot be contracted away, such as a backup copy (Article 45k) and decompilation for interoperability (Article 45n). A clause that completely excludes the rights under Articles 45j through 45n is invalid to that extent.
Yes, especially then. On-premise software runs on the customer's devices, out of your sight. The EULA is the only instrument with which you set limits on use, establish the licensing model, and prohibit abuse.
An EULA governs the right to use installed software. With software as a service, the software runs on the supplier's servers, and the focus shifts to terms of service, availability, and data processing. For installed software, the EULA remains the core element.
As soon as the software processes personal data, such as with a CRM or HR package, the EULA governs the right of use; data processing is regulated separately. With on-premise software, the customer is often the data controller themselves, and a data processing agreement may be required for remote maintenance.
If your EULA contains a clear licensing model and an audit right, then yes. Without a defined model, infringement is difficult to prove. Therefore, specify on how many devices or users the software may run and that you may monitor usage.
