What Shouldn't Go In Your User License Agreement?

Note: Want to skip the guide and go straight to the free templates? No problem - scroll to the bottom.
Also note: This is not legal advice.

Introduction

User license agreements (ULAs) are one of the most critical parts of any company offering digital services or products, forming a legal framework that outlines the terms, rights and obligations of all involved. Without an appropriate agreement in place, businesses may be exposed to a range of potential legal risks, such as copyright infringement or breach issues. So it is essential they take ULAs seriously.

At Genie AI, we understand why ULAs are so important. Therefore we’ve written this piece about their importance and what can happen if you don’t get it right - Read on for our step-by-step guidance and for information on how to access our template library today.

First off, ULAs help protect businesses from any legal issues or liabilities that may arise from their users’ actions - like copyright infringement or skyrocketing contractual costs caused by user negligence. They set out limits of liability and applicable warranties/disclaimers in advance; helping keep businesses safe in the future should something go wrong.

ULAs also provide clarity around the terms of use associated with services or products provided by companies - including data collection/usage policies and other requirements when it comes to ownership/usage rights. All relevant parties must have access to this information so they know what’s expected of them; making sure everyone remains protected should your service fall short at any point.

Moreover, organisations providing digital services must ensure they comply with all applicable laws and regulations - which may be more stringent in certain industries like healthcare and finance: An effective ULA will make sure your business meets these standards, avoiding hefty penalties for non-compliance down the line.
Finally – And just as importantly – ULA’s help ensure users are aware of their rights under your service; preventing disputes later on due to lack knowledge or misunderstanding when it comes to usage expectations. It’s no wonder then why having an appropriate agreement in place is crucial for any company offering digital services or products! And at Genie AI we believe that stay safe online does not mean having to break the bank – You can access our community template library today without needing a Genie AI account! We just want you to have access to free user license agreement templates because we know how important these documents are towards running a successful business!

Definitions (feel free to skip)

Applicable Laws and Regulations: Rules and guidelines that are relevant to a particular situation or agreement.
Scope of the Agreement: The range of what is included in the agreement.
Governing Law: The legal system that will be used to interpret the agreement.
Warranties or Guarantees: Promises of a certain standard of quality or service.
Fees or Charges: Costs associated with the use of the service or product.
Termination Process: The steps that must be taken in order to end the agreement.

Contents

• Overview of relevant laws and regulations related to user license agreements
• Research existing laws and regulations
• Document a list of relevant laws and regulations
• Defining the scope of the agreement
• Determine the scope of the agreement
• Outline the scope in the agreement
• Identifying the parties to the agreement
• List the parties to the agreement
• Include contact information for each party
• Defining permitted and prohibited uses of the service or product
• List allowed uses of the service or product
• List prohibited uses of the service or product
• Outlining any warranties or guarantees associated with the service
• Determine what warranties or guarantees are applicable
• Include warranties or guarantees in the agreement
• Describing how to terminate the agreement
• Define the termination process
• Indicate how the agreement can be terminated
• Setting forth any applicable fees or charges
• Determine what fees or charges are applicable
• Outline the applicable fees or charges
• Establishing the governing law of the agreement
• Research applicable laws
• Identify the governing law
• Providing a signature line for the parties to sign the agreement
• Include signature lines for each party
• Include the date of the agreement
• Drafting the agreement
• Write the agreement
• Ensure it is clear and concise
• Reviewing the agreement
• Have each party review the agreement
• Ensure that all parties understand the agreement
• Signing the agreement
• Have each party sign the agreement
• Sign and date the agreement

Get started

Overview of relevant laws and regulations related to user license agreements

• Research the laws and regulations that affect user license agreements in your jurisdiction
• Make sure you understand the specific laws that apply to your product and service, and to the customers that you are targeting
• Understand the implications for your user license agreement
• Make sure that any terms you include in the agreement are compliant with applicable laws
• When you are confident that you have researched the relevant laws and regulations, you can move on to the next step.

Research existing laws and regulations

• Research existing laws and regulations related to user license agreements in your jurisdiction
• Look up regulations related to privacy, data protection, consumer protection, intellectual property, and other relevant laws
• Familiarize yourself with the legal requirements that apply to user license agreements
• Make a note of any relevant laws, regulations, and standards that should be reflected in the user license agreement
• Make sure to review any non-binding guidelines as well, as these may provide valuable context
• When you have a thorough understanding of the applicable laws and regulations, you can move on to the next step - document a list of relevant laws and regulations.

Document a list of relevant laws and regulations

• Make a list of all relevant laws and regulations pertaining to your product and services that should be included in the agreement.
• You can find these by researching the applicable laws and regulations that apply to your product or services.
• When you have gathered all the applicable laws and regulations that should be included, you can move on to the next step which is defining the scope of the agreement.

Defining the scope of the agreement

• Identify all the types of products and services that are intended to be covered by the agreement
• Outline the specific terms and conditions that apply to each product and service covered
• Consider the geographic scope of the agreement
• Specify the governing law and jurisdiction of the agreement
• Determine the intended duration of the agreement
• Once you have identified and outlined the scope of the agreement, you can move on to the next step.

Determine the scope of the agreement

• Identify who will be using the agreement, including any customers, vendors, or other parties
• Identify all services and activities that will be covered by the agreement
• Identify any geographical restrictions that may be applicable
• Identify any legal or regulatory requirements that must be taken into consideration
• When applicable, identify any industry standards that must be taken into account

Once you have identified all the above, you can move on to the next step of outlining the scope in the agreement.

Outline the scope in the agreement

• Make sure to identify and describe the scope of the user license agreement in detail
• This should include the software or product being licensed, the services associated with it, the license period and any limitations
• Additionally, make sure to specify the geographical area in which the user license agreement applies
• Additionally, if for any reason the license is not going to be valid, make sure to note that in the agreement
• Once you have outlined the scope of the agreement, you can move on to the next step of the guide.

Identifying the parties to the agreement

• List the names of the parties who are involved in the license agreement
• Identify if the parties are individuals or businesses
• Include contact information for each of the parties
• Make sure to clearly state which party is the licensor and which is the licensee
• Once you have all the necessary information, you can check this step off your list and move on to the next step.

List the parties to the agreement

• Identify the parties to the agreement. This includes yourself (the creator of the User License Agreement) and any other parties involved.
• Make sure to include the full legal name and, if applicable, any titles or roles.
• List all parties involved.
• Make sure to include contact information for each party: name, email address, and phone number.
• Once all parties have been identified and contact information has been provided, you can check this off your list and move on to the next step.

Include contact information for each party

• Include the full name of each party
• Include the mailing address and physical address of each party
• Include the email address and telephone number of each party
• Include the website of each party, if applicable
• Once you have provided contact information for each party, you can move on to the next step.

Defining permitted and prohibited uses of the service or product

• Identify the key features of the service or product
• Decide which uses should be allowed and which should be prohibited
• Write down a clear list of permitted uses
• Write down a clear list of prohibited uses
• Ensure the language used is clear and unambiguous
• Check that the list covers all relevant use cases

You’ll know you have completed this step when you have written down a clear list of both permitted and prohibited uses of the service or product.

List allowed uses of the service or product

• List out the specific activities that are allowed for using the service or product
• Clarify how users may use the service or product for their own purposes
• Outline any restrictions on the use of the service or product
• Specify any limits on the number of users that may access the service or product
• Make sure all activities that are allowed for using the service or product are listed
• When you have the complete list of allowed uses, you can move on to the next step.

List prohibited uses of the service or product

• List any activities that are not allowed under the terms of the user license agreement.
• Ensure that you make a clear distinction between activities that are prohibited and activities that are permitted but may be subject to certain restrictions.
• Examples of prohibited activities may include:
• Sharing or distributing content that is protected by copyright or other intellectual property laws
• Selling or reselling the service or product
• Modifying or creating derivative works of the service or product
• Reverse engineering any part of the service or product
• Using the service or product for any illegal purpose
• Once you have listed all the prohibited activities, you can move on to the next step.

Outlining any warranties or guarantees associated with the service

• Review the applicable laws and regulations to ensure any warranties or guarantees included in the agreement are compliant.
• Identify the specific warranties or guarantees that are applicable to the service or product.
• Include language in the agreement that outlines the warranties or guarantees, including any disclaimers.
• Include language that specifies how the warranties or guarantees can be enforced.
• Review the agreement to ensure the language used is clear and that all warranties or guarantees are covered.
• Once you have included all the applicable warranties or guarantees and reviewed the agreement, you can move on to the next step.

Determine what warranties or guarantees are applicable

• Consult with legal counsel to determine which warranties or guarantees are applicable to the service
• Research the applicable warranties or guarantees associated with the service
• Research any applicable warranties or guarantees for similar services
• Make a list of any applicable warranties or guarantees that should be included in your user license agreement
• Make sure to double-check with legal counsel to ensure accuracy of the list and that it covers all applicable warranties or guarantees

Once you have a complete list of applicable warranties or guarantees, you can check this step off your list and move on to the next step of including these warranties or guarantees in the agreement.

Include warranties or guarantees in the agreement

• Read through the applicable warranties or guarantees
• Decide which ones should be included in the user license agreement
• If the warranties or guarantees are too long, summarize the key points
• Ensure that the language used is easy to understand
• Provide a clear definition of each warranty or guarantee
• Make sure that any warranties or guarantees are legally binding
• Check to make sure that all applicable warranties or guarantees are included in the agreement
• Once you have included all applicable warranties or guarantees, you can move on to the next step.

Describing how to terminate the agreement

• Determine the grounds for termination, such as breach of contract, failure to pay, or failure to comply with terms
• Outline what the user must do to remedy any grounds for termination
• Include notice requirements, such as how many days notice the user must receive prior to termination
• Describe any consequences the user may face due to the termination
• Specify who has the right to terminate the agreement
• When you have all the details of the termination process outlined, you can check this off your list and move on to the next step.

Define the termination process

• Specify who has the right to terminate the agreement
• Set out the conditions under which the agreement can be terminated, i.e. breach of contract, failure to meet obligations, etc.
• Explain the consequences of terminating the agreement
• Provide a timeline for termination
• Set out the process for terminating the agreement, i.e. written or verbal notice, time for response, etc.
• Outline any fees or penalties associated with terminating the agreement
• Make sure to document the agreed-upon termination process in the agreement

Once this step is complete, you can move on to the next step: ### Indicate how the agreement can be terminated.

Indicate how the agreement can be terminated

• Review any applicable laws and regulations to ensure the termination process is compliant
• Clearly outline the conditions under which the agreement can be terminated
• Specify the rights and obligations of both parties upon termination
• Identify any obligations that survive the termination of the agreement
• Describe any potential penalties for terminating the agreement early
• When the step is complete, ensure all relevant information is included in the agreement

Setting forth any applicable fees or charges

• Research your industry and regulations to determine which fees and charges may apply
• Include any applicable fees or charges in your agreement, such as:
• Fees for using the product or service
• Fees for additional features or services
• Fees for any damages caused by the user
• Include how the fees or charges will be collected
• Once you’ve determined the applicable fees or charges, you can check this step off your list and move on to the next step.

Determine what fees or charges are applicable

• Research applicable fees and charges for the product/service covered by the license agreement
• Research any applicable taxes or fees related to the product/service, such as sales taxes or other fees
• Take into consideration the different types of payment that may be accepted, such as credit cards, checks, PayPal, etc.
• Consider any discounts that may be offered
• Take into account any differences in fees or charges between different countries or regions
• Outline a process for changing/adjusting fees and charges
• Once all fees and charges have been determined, you can check this off your list and move on to the next step.

Outline the applicable fees or charges

• Clarify whether there are any upfront costs or ongoing fees associated with the agreement
• Decide what type of payment will be accepted and how often they will need to be paid
• Establish a payment schedule and any payment penalties
• Outline any additional fees or charges related to the agreement
• Include any terms and conditions related to refunds or cancellations
• Specify any taxes or other fees that may be applicable

Once you have outlined all applicable fees or charges, you can check this off your list and move on to the next step.

Establishing the governing law of the agreement

• Research the applicable laws in your jurisdiction to determine which governing law should be included in the User License Agreement
• Consider any conflicts of laws that may arise between the governing law of the jurisdiction where the User License Agreement is entered into and the governing law of the jurisdiction where the parties to the agreement reside
• Include a clause in the User License Agreement that outlines the governing law of the agreement
• Ensure that the clause is clear and unambiguous
• Once you have determined the governing law and included the appropriate clause in the User License Agreement, you can then move on to the next step of researching applicable laws.

Research applicable laws

• Become familiar with applicable local, state and federal laws that may affect the agreement
• Research any industry standards or regulations that may need to be taken into account
• Research any common law principles or judicial case law that may be relevant
• Identify any relevant laws or regulations that may be applicable to the agreement
• When you have identified all relevant laws, you can check this off your list and move on to the next step.

Identify the governing law

• Determine the jurisdiction in which the agreement will be governed.
• Consider potential laws from multiple jurisdictions and determine which will be most applicable.
• Consider other parties that may need to be involved and the laws that may apply to them.
• Research and determine the laws that will be most applicable for the agreement.
• When you have identified the laws that will govern the agreement, you can check this step off your list and move on to the next.

Providing a signature line for the parties to sign the agreement

• Include a signature line for both the licensor and licensee.
• Make sure to include the date, name, and title of the signer.
• Explain that signing the agreement means the parties agree to be legally bound by its terms.
• Once you have included signature lines for both parties and explained that signing the agreement means they agree to be legally bound by its terms, you can check this step off your list and move on to the next step.

Include signature lines for each party

• Have each party sign and date the agreement
• Add a signature line for each party
• Make sure that each party is signing the same copy of the agreement
• Have the witnesses sign and date the agreement, if applicable
• Once each party has signed the agreement, you can check this step off your list.

Include the date of the agreement

• Determine the date the agreement will become effective
• Put the date into the agreement in the form of a written clause
• Include the month, day and year in the date clause
• Make sure the date is correct and all parties agree to the date
• Check off this step when all parties have agreed to the date and it has been placed into the agreement.

Drafting the agreement

• Start by writing out the most important points that need to be included in the agreement
• Make sure to research what should and should not be in a user license agreement
• Make sure you include all the necessary details, such as the parties involved, the date of the agreement, and the terms and conditions of the agreement
• Be sure to keep legal language and wording to a minimum
• Double check for any typos or errors in the document
• When you’re done, have an attorney review the agreement for accuracy and completeness

How you’ll know when you can check this off your list and move on to the next step:

• When you have written out the points of the agreement and are confident that it includes all the necessary details and has been reviewed by a lawyer, you can move on to the next step.

Write the agreement

• Gather all the rules and regulations you want to include in the agreement
• Make sure all the rules and regulations are clearly written
• Double-check that the rules and regulations are written in a legal language
• Check for any typos and make sure the agreement is free from errors
• Once you have confirmed that the agreement is free from errors and typos, you have successfully written the agreement and can move on to the next step.

Ensure it is clear and concise

• Read through the agreement to ensure it is written in simple language
• Make sure the agreement is easy to understand, with no ambiguity
• Use short sentences and avoid technical jargon
• Check for typos, grammar and spelling errors
• Make sure the agreement covers all necessary points
• Review the agreement to make sure it is consistent throughout
• Check that the agreement does not include any contradictory instructions
• When you are satisfied with the agreement, you can move on to the next step.

Reviewing the agreement

• Review the agreement closely to ensure that all terms are in line with the expectations of both parties
• Make sure that no illegal or otherwise non-enforceable terms are included
• Identify any areas that need additional clarification or further explanation
• Check for any typos, errors, or inconsistencies
• When you have gone through the agreement, make sure to save and store a copy for future reference
• Once you have reviewed the agreement and you are satisfied that it accurately reflects the expectations and goals of both parties, you can move on to the next step.

Have each party review the agreement

• Make sure each party has a copy of the agreement
• Encourage the parties to ask questions and seek clarification
• Check that each party has read and understood the terms before signing
• Make sure that each party is willing to accept the terms of the agreement
• Make sure that any requested changes to the agreement have been made and agreed to by all parties
• Once all parties have read and agreed to the terms, they can sign the agreement
• You can check this step off your list once all parties have signed the agreement.

Ensure that all parties understand the agreement

• Make sure to explain the terms of the agreement clearly and thoroughly to each party
• Ask each party if they have any questions or concerns about the agreement
• Obtain written confirmation or acknowledgement from each party that they understand the agreement
• Ensure that each party has a copy of the agreement
• Check off this step when all parties have confirmed they understand the agreement and have copies of the agreement.

Signing the agreement

• Have each party read and understand the agreement before signing
• Ask each party to provide two copies of their signature
• Have two witnesses sign the agreement, one from each party
• Make sure all copies are identical
• Make sure all parties have a copy of the signed agreement
• Once all parties have signed, you can check this step off your list and move on to the next step.

Have each party sign the agreement

• Have both parties read the agreement and make sure they understand it
• Provide each party with a copy of the agreement
• Have each party sign their copy of the agreement
• Make sure that each signature is witnessed
• When both parties have signed the agreement, you can move on to the next step of signing and dating the agreement.

Sign and date the agreement

• Make sure both parties have signed and dated the agreement
• Check that the agreement is complete and all information is accurate
• Once all parties have signed, the agreement is valid and binding
• You can now move on to the next step in the process

FAQ:

Emma - Does the UK have different laws around user license agreements than the US?

A: Yes, the UK does have different laws governing user license agreements than the US. The UK has a more comprehensive set of regulations, with greater emphasis on consumer rights. For example, the UK’s Consumer Rights Act 2015 outlines a number of rights that consumers have when it comes to goods and services they purchase. This includes the right to be informed of any changes to a service or product, as well as the right to redress if something goes wrong. Therefore, UK-based companies should ensure that their user license agreements are compliant with this Act and other applicable legislation. If you are based in the US and looking to create a user license agreement, you should ensure that you are familiar with the relevant state and federal laws.

Example dispute

Suing a Company for Violating a User License Agreement

• The plaintiff must be able to prove that the company violated the terms of the user license agreement.
• The plaintiff must also be able to demonstrate that the breach of the user license agreement caused them or their business damages or losses.
• The plaintiff must be able to provide evidence of the damages or losses they suffered as a result of the violation of the user license agreement.
• The plaintiff must be able to demonstrate that the damages or losses were a direct result of the user license agreement violation.
• The plaintiff can seek damages for breach of contract, compensatory damages, and/or punitive damages.
• In order to win the lawsuit, the plaintiff must be able to prove that the company violated the user license agreement and that they suffered damages as a result.
• Settlement may be reached out of court or through a court judgement depending on the situation.
• Damages, if awarded, may be calculated in a variety of ways, depending on the nature of the damages suffered.

Templates available (free to use)

Clickwrap Software End User License Contract Eula
Mobile App End User License Contract Eula

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