What a EULA is and how to write one

When you download an app on your phone or install new software on your computer, you usually see a series of lengthy legal documents that you must accept before you can start using the service. One is the End-User License Agreement, also known simply as EULA. 

You will likely need a EULA if you run an online business, a mobile app, or if you plan to launch a digital product. In this article, we’ll explain why you need a EULA and the key elements to include so you can create one quickly and easily. Let’s dive in! 

What is a EULA, or End-User License Agreement? 

EULA stands for End User License Agreement. It’s a legal document typically provided by vendors of digital products and services (such as software, mobile apps, video games, and some websites) to outline the terms and conditions for using the license. In simple terms, it specifies who owns the software and what the user is allowed — and not allowed — to do with it. 

The EULA usually appears during the software installation or setup process and must be accepted by the user for it to be valid. Sometimes, it may appear under different names, such as “License Agreement”, “Software License Agreement” or simply “User Agreement”.  

The EULA is a legally binding contract, meaning it holds legal validity in case of any dispute, and it involves two parties: 

• The company providing or developing the software: the entity that owns the rights to the software and sells the respective usage licenses. 
• The end user: the person who has acquired the license and, therefore, has the right to use the software according to the terms of the contract. 

In this sense, the purpose of the EULA is to specify the terms, conditions, responsibilities, limitations, obligations, rights, and more that apply when using the service. 

From the perspective of the company that provides the software or app, this document serves multiple purposes, including: 

• Establishing and reinforcing ownership of the app, software, video game, platform, or digital service. 
• Setting limits on the license’s use. 
• Clarifying allowable uses and limitations. 
• Limiting liability. 
• Providing legal protection against any misuse or incidents caused by the user. 
• Setting clear expectations for users. 

Examples of EULA 

Let’s take a popular software example: Microsoft Word. Their EULA specifies, among other things, that the user may install and activate the program on only a limited number of devices depending on the purchased license. It also states that users are prohibited from performing ‘reverse engineering’. meaning they cannot take apart or disassemble the software. Additionally, it forbids renting, leasing, or lending the software to third parties. 

Microsoft Word’s EULA also states that Microsoft is not liable for any damages that may arise from the program’s use. For example, if a user utilises Word to write a threat against another person, Microsoft bears no legal responsibility; however, the company may be obligated to cooperate with authorities if the information is needed for a legal investigation. 

Minecraft’s EULA grants users the right to play the game but sets clear limitations on content modification, distribution, sale, and use. For example, players are not allowed to change the game’s code or resources (through means such as mods) in ways that affect other players’ experience without Mojang’s consent.  

It also defines rules for mods: the document states that “you can do whatever you want with them, as long as you don’t sell them for money / try to make money from them and so long as you don’t distribute Modded Versions of the game”. 

Is a EULA the same as ‘Terms of Use’ or ‘Terms of Service’? 

While the EULA, ‘Terms of Use’ and ‘Terms of Service’ are all legal documents that define conditions and protect the provider’s rights, they are not precisely the same. The EULA is generally used for software installed on devices and focuses on regulating license use. In contrast, the Terms of Use or Service usually apply to web services such as websites or online shops. 

When should you include a EULA? 

Including a EULA is essential in many situations were safeguarding the software developer’s rights and defining the terms of use are crucial. 

For instance, if you run an online shop and have launched an app to attract more customers, you should have an End User License Agreement in place.  

It’s similarly recommended that you include a EULA if you provide an online service like a collaboration platform or a virtual editor. 

Here are some of the most common cases: 

• Software that requires installation on computers. 
• Mobile applications. 
• Video games. 
• Cloud-based Software as a Service (SaaS) platform. 

Do you need a EULA for a website? 

Since the EULA is a document that sets up rules for software license usage, typical websites usually do not need to include one. However, there are some exceptions, which you can see below: 

• You provide access to an online platform via a web browser: if your website offers cloud-based Software as a Service (SaaS), you may include a EULA to specify the usage terms. Examples: online tools like CRMs, online video editors, accounting platforms, etc. 
• You sell digital products under license: if your website offers files such as templates, plugins, or source code, you can use a EULA to establish usage rights. For example, whether it’s a commercial license, whether redistribution is allowed, or what type of modifications are permitted. 
• You offer downloadable software: if your website allows users to download software (desktop programs, mobile apps, plugins, etc.), you can include the EULA to let users know the limitations before installation begins. 

Is a EULA legally required? 

A EULA is not always legally required, but it is strongly recommended if you offer any type of software as it protects your ownership rights and limits your liability in case of a violation. In other words, without a EULA, you might run into unnecessary legal issues. 

What a EULA should include 

Although each software provider can customise their EULA according to the specific characteristics of their product, some basic elements should not be left out: 

• Software provider information: company name, business address, and contact details. 
• Software information: legal name and purpose of the product. 
• Effective date: typically, the agreement becomes effective once the user accepts the terms. 
• Software ownership: specify that the company is the rightful owner of the software and that what is granted to the user is a usage right, not ownership. This part is key to protecting copyright. 
• Software usage restrictions: outline actions that are not allowed, such as modifying the code, reverse engineering, distributing copies or reproductions, using it for illegal purposes, etc. 
• “As-is” clause: this clause exempts the developer from offering guarantees about the software’s performance and limits liability for potential errors, malfunctions, or interruptions. This protects the company against claims if the product does not meet user expectations. 
• Limitation of liability: states that the provider is not liable for damages arising from the use of the software, including financial losses, property damage, personal injury, or harm to reputation. 
• Update policy: explains whether the software will update automatically or under what conditions updates will occur. 
• License termination conditions: outlines when the license can be terminated if a user doesn’t comply. 
• Applicable law: defines which jurisdiction applies and which courts will handle potential disputes. 

The user needs to understand that this is a legally binding contract and that by accepting the terms of the EULA, they agree to abide by them. 

It is also recommended to clarify that accepting the EULA is not optional for using the software. Otherwise, the company could be left unprotected in future legal conflicts. 

How to write a EULA 

Now that you know what a EULA is and when to include one, you’re probably wondering: how can you write one without being a legal expert? 

If you need to include a EULA for your digital product, you have three options: 

• Write it yourself. 
• Hire a law firm to write it. 
• Use a template or generator. 

The first option is the most difficult. If you’re not deeply familiar with licensing laws for digital products, you could make mistakes or leave out essential details that could later prove costly. 

Another option is to hire a law firm specialised in digital law to draft it for you. This is the most comprehensive option but also the most expensive. 

Using a template or a EULA generator is the easiest and most affordable way. If technical jargon is not your strong suit, solutions now help you navigate the digital world’s legal aspects without complications.  

Termly, for example, offers a service where you fill in some basic information about your app or software and the rules or restrictions users must follow. You’ll have a customised, ready-to-publish EULA in no time. It also helps you generate privacy policies, cookie banners, and other web compliance essentials. 

Protect yourself with a EULA 

Having a EULA is not just a formality — it’s an essential part of any digital product. When you write it, you protect your rights as a developer or provider, set clear expectations for users, avoid misunderstandings, and reduce potential legal risks. 

If you’ve launched an app, software, or any type of digital platform, make sure your EULA covers all the necessary points and is accessible to users before they install or start using your service. You don’t need to be a legal expert to create one — tools like Termly can help you draft a clear, professional EULA that fits your needs in just a few minutes.