In the previous post, we described what a software license agreement is and what it essentially entails.
Having discussed this, it is also very important to outline the standard provisions every standard software license agreement should ordinarily contain which is what we would be doing in this post.
What are these essential provisions?
Essential Provisions To Note In The Software License Agreement
In this section, we’ve highlighted some vital provisions to note in the software license agreement. Let’s get in on them subsequently.
1. Parties
Just like every agreement, a software license agreement must sufficiently identify all the parties involved and the capacity in which they are acting with respect to the agreement.
2. Terms and Conditions
This is perhaps the bulk of the agreement. In addition, this part forms the operating manual of the parties determining the rights and obligations of the parties involved. These should also fully reflect Parties’ intent and avoid unintended consequences.
Furthermore, details such as device usage, mode of operation, etc must be provided.
3. Exclusivity Transferability
This borders on the terms of use of the license itself. Details of the duration of the license, the mode of license to the licensee are, whether or not the license is exclusive or non exclusive should be expressly provided. Also, whether the license can be transferred to a third party with or without approval need to be provided.
4. The Software Product
The software product for which the agreement was made must be sufficiently described in the form contemplated by the parties. However, it could be in the form of a design, source code, or any other product that can be validly classifiable as a software.
5. Intellectual Property
The software license agreement should identify the party in respect of which the IP in the product lie both during the pendency of the agreement and afterwards. This should also be drafted carefully to ensure the party intended is the one with the IP right.
6. Termination
The agreement should cover in details the terms and the mode of termination. Whether the termination should survive existing liabilities should also be stated.
Conclusion
Other than the aforementioned, other standard provisions such as governing law, damages for breach, etc. should be included.
There is no one size fit all approach to agreements. Rather, it depends on the particular case.
The above generally provides the standard clauses a typical software license agreement should contain.
Regardless, it is necessary to consult a lawyer for advisory and detailed drafting.
In conclusion, these are the essential provisions in the software license agreement we’ve outlined for you in this article.
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References
LegalNature, “The Basics of Software License Agreements” available at https://www.legalnature.com/guides/the-basics-of-software-license-agreements accessed on October 12 2023
Docue, “7 Essential Clauses to Include in Software Licensing Agreements” available at https://docue.com/en-gb/legal-hub/software-licensing-agreements accessed on October 12 2023
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