What is a software license?

A software license allows a person or business (the licensee) to use software developed by another party (the licensor). The license itself is a legally binding document that allows the licensee to use the software without violating the intellectual property rights of the licensor.

It is similar to a product or service agreement in that it sets out the rights and obligations of both parties with regard to the software. The parties should have an opportunity to negotiate their rights before entering into the agreement.

A software license is not the same as an end-user agreement that you would see on websites or apps where the user must accept the terms before using the software. It is also not the same as development software, which involves a customization process for the end user’s specific needs.

Keep in mind that a software license agreement also differs from a technology services contract in that a technology services contract sets up an ongoing services agreement between an IT contractor and its client, but does not involve licensing and downloading specific software to a computer or other device.

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