Should you read software license agreements?

Should you read software license agreements?

Evan Yares has raised an interesting point about the insolvency clause in Autodesk’s End User License Agreement. Please read the whole thing, but the gist is that there’s a clause where if you get into financial difficulties, Autodesk will do its bit to help you out in times of trouble by taking away your software licenses.

This clause extends as far as making an arrangement with your creditors, which is a common enough phrase but can mean several things and isn’t defined within the agreement. So, if your cash flow is a bit tight and you have to ask your phone company for another month to pay your bill, you’ll be sure to stop using all your Autodesk software, won’t you? Never use it again, because otherwise you’ll be a thief.

OK, maybe that’s a bit extreme, but I’m sure it could be interpreted that way by an aggressive and/or inventive lawyer, and Autodesk doesn’t appear to be short of those. Who knows? Why would Autodesk put that kind of thing in its EULAs if there is no intention of ever using it?

That’s an interesting aside, but it’s not my main point. Autodesk EULAs have traditionally contained unreasonable, unconscionable and arguably unenforceable clauses, so there’s nothing particularly remarkable there. My main point relates to reading EULAs in general, not just Autodesk’s. As a general rule, should you do it?

Looking at the polls I’ve done on this subject, lots of you don’t read them. In fact, over two thirds of poll respondents either never read them, or rarely do so. It would be interesting to find the reasons behind that. Do you not have the time? Is it pointless because it’s all legal gobbledygook? Do you trust the software maker to be reasonable? Do you consider click-throughs to be unenforceable? Or are there other reasons? Please let me know. I may do another poll once I have a reasonable set of choices to offer up.

There’s an argument that can be made that you are actually better off not reading these “agreements”. According to this argument, if you don’t read it, how can you have agreed to it? There’s no meeting of the minds. Better still; get somebody outside your company to do the installation for you. That person has no authority to bind your company to anything, so no agreement exists.

Or does it? Is this a valid argument? Until there’s either well-established case law or unambiguous legislation, it’s anybody’s guess. Even when the answer is known, it’s highly likely that the answer will vary depending on your location. Even if the agreement states that it is based on California law, what if the local law establishes that no obligation exists that binds you to that agreement?

What’s the best thing to do? I honestly don’t know. You could do an R. Paul Waddington and make a public repudiation of any obligation to abide by Autodesk’s EULAs, and continue to use the software. You could do what I suspect a large number of people do, which is the same kind of repudiation, but a silent one. You could attempt to negotiate a modified EULA with the software vendor, but I don’t fancy your chances. You could stop using software with unreasonable EULAs, but what kind of choice is that? It may not be possible at all for your business. Finally, you could just put up and shut up, either agreeing unreservedly to accept whatever is in the EULA, or crossing your fingers in the hope that the software vendor will do the right thing.

What choice have you made, and why?


  1. metis

    you’re effectively signing a legal document by clicking on the “i agree”. if you have any notion of due diligence you have to read these things.

    i’ve seen “free beta” software that had as part of it’s EULA that the software co owned anything you produced with it. owned. not could use for promo, they owned the design outright, and didn’t even have to attribute its source.

    i bought a house last fall, and at closing the documents person was baffled that i was *reading* the pages of legalese i was signing. and asking for clarification. hmmm i’m agreeing to give thousands of dollars to someone for several decades, and i wouldn’t read that?

    now, whether or not it’s enforceable is a whole nother ball of wax.

    that said, if you have google toolbar installed, and have anything covered by an NDA on that machine, or networked drives from it (like an autodesk alpha or beta), you’ve violated it. breach of contract on a deal with NDA sounds like a REALLY good reason to read them.

  2. R. Paul Waddington

    Metis and Steve; for reasons of absence I delayed my response to this post but it is important I do.

    Firstly let me say Metis, ‘click thru’ EULA’ are NOT a legal documents and ‘no’ user is bound to the conditions found within it, no matter what you believe or any software developer may try to tell you to the contrary. Indeed it could be argued the statement, alluding to the legal status of the EULA, found early in some documents is a misleading statement.

    To answer Steve question tho’: EVERY person who installs software containing a EULA SHOULD read them – NO doubt about that; however, this does not mean that you are bound by the conditions, even if you have ‘clicked’ the ‘I Agree’ button; and there are several reasons why this is so.

    As for Steve’s comment about – not reading the EULA – getting someone else to install: this raises several points. One being if you do believe the EULA is legally enforceable then you will see, some EULA, have a statement relating to the fact the installer is authorized to accept the conditions on behalf of the company/individual involved…etc. So no let out here guys. You’re either in or out but you cannot ‘sit on the fence’.

    “What the best thing to do?”

    Steve’s question is a VERY important one and it should be answered: EULA should be read – I make this unequivocal statement for several reasons – every effort MUST be made to understand their contents, ramifications and the legal status of EACH EULA. Just because one may be enforceable does not mean, all, or another is!

    What MUST never be done is to ‘silently’ repudiate, or ‘unknowingly’ accept, EULA: this is neither sensible nor safe – it’s ‘head in the sand’ stuff that will not assist if the ‘crap hits the fan’ and you are called on to justify your position.

    Negotiation – as I have proven – is very difficult, tho not impossible. Concession have been made, to those with clout, and this actually makes the situation worse for the software developer – in relation to enforceability – NOT better as it would appear on the surface. This action does mean tho’ the agreement between those parties is quite probably a ‘true’ contract for the exact reason it is not for the majority!

    In summary: if after reading, you actually accept, without question, EULA – Autodesk’s or any others – then click ‘I Agree’ – and your legal obligations and the responsibility of causing considerable concern for those of us who know this is the wrong course, extremely stupid, an un-professional and un-safe business decision; a decision that may affect who else is willing to do business with you/your business in the future!

    The correct course of action in relation to EULA is; having read and UNDERSTOOD them, is to respond appropriately. The response will be inline with the ‘UNDERSTOOD’ component of the earlier sentence and if all the sensible options and opportunities fail then you MUST do what I have done. There is no other alternative if, for you, as it is for me, that there is no opportunity to choose another source of software tools.

    For those of you who attended Autodesk’s Solutions Day in Sydney, yesterday, you will have received a card titled “Top 10 Reasons Licence Compliance Matters”. You will notice the very first paragraph is titled “It’s your Legal Obligation” In this paragraph its states the EULA is a ‘contract’. So when did you simply believe what a salesperson is telling you? Do you own thinking: the, “It’s your Legal Obligation”, statement is not necessarily true as I have previously stated; but in doing this the company is making every effort to saturate its market with a statement, it may, latter, hold up as fact! This is social engineering on a grand scale and just one reason why NO user should ‘sit on their hands’ when it comes to Subscription documents and EULA.

    As for the situation Evan Yares raises: this in not new and is an extremely dangerous clause. Do read all of Evan’s post it is instructive and in many ways parallels my situation. But the two situations are different and have their own life. Evan’s suggested action is an appropriate response but one that is not necessary, as I have proven, when dealing with the Subscription and Licence documents that are part of software products.

    In closing, there is one thing NONE of us should want to happen, and that is, to have a court or laws brought into effect – without considerable safeguards – that legitimize and causes ‘click thru’ EULA’ and Software Subscriptions to be recognized automatically as legally enforceable documents. This is what will happen tho’ if software users remain as ‘lazy’ and ‘careless’ as they have been to this point in time!

    Steve if any of your readers want to talk or discuss these issues, what I have done and why, more fully, with me directly I am happy to do so.

  3. R. Paul Waddington

    Yes Sean, I have read the clause you mention.

    And for the record I wrote some time ago to Autodesk asking for an opportunity to discuss their (new) EULA. Initially they agreed and asked about what; when I replied they backed out stating they were not prepared to discuss it with me and that they had put it in the hand of their lawyers.

    I replied (weeks ago) to their email with one to Carl Bass, through the lawyers, outlining why I do not accept Autodesk’s terms and conditions whilst continuing to use the software.

    The Audit clause is part of the reason and CIP is another. Autodesk have known for years if they were prepared to make their action fully transparent I may accept their terms. But whilst ever they insist on asking for access to my premises and my business computing systems without giving me control and making their actions fully transparent then I am not about to accept and no business person in their right minds should accept what is before them.

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