Software License Agreement
Copyright Act 17 U.S.C. — DMCA — UCC
This Software License Agreement (the "Agreement") is entered into on [Effective Date] (the "Effective Date") by and between:
[Licensor Name], with its principal place of business at [Licensor Address], [Licensor City], [Licensor State] [Licensor Zip] (hereinafter referred to as the "Licensor"); and
[Licensee Name], with its principal place of business at [Licensee Address], [Licensee City], [Licensee State] [Licensee Zip] (hereinafter referred to as the "Licensee").
The Licensor and the Licensee are referred to collectively as the "Parties" and individually as a "Party."
RECITALS
WHEREAS, the Licensor is the owner of certain software known as [Software Name] and all associated intellectual property rights therein; and
WHEREAS, the Licensee wishes to obtain a license to use the Software on the terms and conditions set out in this Agreement;
NOW, THEREFORE, in consideration of the license fee paid and the mutual obligations set forth herein, the Parties agree as follows:
1. DEFINITIONS
1.1 In this Agreement, the following terms shall have the meanings set out below:
- "Software" means [Software Name], [Software Description], together with all updates, modifications, and new versions provided by the Licensor under this Agreement.
- "Authorized User" means any employee, officer, contractor, or agent of the Licensee who is permitted to access and use the Software under this Agreement.
- "Documentation" means any user guides, technical manuals, and online help materials provided by the Licensor in connection with the Software.
- "Intellectual Property Rights" means all copyright, patent, trade secret, trademark, and any other intellectual property rights, whether registered or unregistered, under the laws of the United States and internationally.
- "Permitted Purpose" means [Permitted Use].
2. GRANT OF LICENSE
2.1 Subject to the terms of this Agreement and payment of the License Fee, the Licensor hereby grants to the Licensee a [License Type] license to use the Software within the territory of [License Territory] solely for the Permitted Purpose during the License Term.
2.2 The license includes the right for Authorized Users to access and use the Software in object code form only, in accordance with the Documentation.
2.3 Except as expressly permitted by this Agreement or by applicable law (including 17 U.S.C. 117 regarding backup copies), the Licensee shall not copy, modify, adapt, translate, reverse engineer, decompile, disassemble, or create derivative works based on the Software.
2.4 The Licensee shall not sublicense, rent, loan, sell, transfer, or otherwise make available the Software to any third party without the prior written consent of the Licensor.
3. LICENSE FEE AND PAYMENT
3.1 In consideration of the rights granted under this Agreement, the Licensee shall pay to the Licensor the license fee of $[License Fee] (the "License Fee"), payable [Payment Schedule].
3.2 All sums payable under this Agreement are exclusive of applicable sales tax, use tax, or other taxes, which the Licensee shall pay at the prevailing rate where applicable.
3.3 If the Licensee fails to pay any sum due under this Agreement by the due date, the Licensor may charge interest on the overdue amount at the lesser of 1.5% per month or the maximum rate permitted by law.
4. LICENSE TERM AND TERMINATION
4.1 This Agreement shall commence on the Effective Date and continue for [License Term] (the "License Term"), unless terminated earlier in accordance with this section.
4.2 Either Party may terminate this Agreement immediately upon written notice if the other Party:
- commits a material breach that is incapable of cure, or fails to cure a material breach within 30 days of receiving written notice;
- becomes insolvent, files for bankruptcy under 11 U.S.C. 101 et seq., makes an assignment for the benefit of creditors, or ceases to conduct business; or
- undergoes a change of control without the prior written consent of the other Party.
4.3 Upon termination or expiration, the Licensee shall immediately cease all use of the Software and destroy all copies in its possession or control, certifying such destruction in writing upon request.
5. INTELLECTUAL PROPERTY RIGHTS
5.1 All Intellectual Property Rights in the Software and Documentation are and shall remain the exclusive property of the Licensor. The Software is protected as a literary work under the Copyright Act (17 U.S.C. 101 et seq.) and may be protected by patent and trade secret law.
5.2 This Agreement does not transfer or assign any Intellectual Property Rights in the Software to the Licensee. The Licensee acquires no right, title, or interest except the right to use the Software as expressly permitted.
5.3 The Licensee shall not remove, alter, or obscure any copyright notices, trademark notices, or other proprietary notices.
5.4 Under the Digital Millennium Copyright Act (DMCA) (17 U.S.C. 1201), the Licensee shall not circumvent any technological protection measures applied to the Software by the Licensor.
6. DISCLAIMER OF WARRANTIES
6.1 EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, THE SOFTWARE IS PROVIDED "AS IS" AND THE LICENSOR MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESS, IMPLIED, STATUTORY, OR OTHERWISE, INCLUDING BUT NOT LIMITED TO THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND NON-INFRINGEMENT UNDER THE UNIFORM COMMERCIAL CODE OR OTHER APPLICABLE LAW.
6.2 THE LICENSOR DOES NOT WARRANT THAT THE SOFTWARE WILL BE UNINTERRUPTED, ERROR-FREE, OR FREE OF HARMFUL COMPONENTS.
7. LIMITATION OF LIABILITY
7.1 TO THE MAXIMUM EXTENT PERMITTED BY LAW, NEITHER PARTY SHALL BE LIABLE FOR ANY INDIRECT, INCIDENTAL, SPECIAL, CONSEQUENTIAL, OR PUNITIVE DAMAGES, OR ANY LOSS OF PROFITS, REVENUE, DATA, OR BUSINESS OPPORTUNITY, ARISING OUT OF OR RELATED TO THIS AGREEMENT.
7.2 THE LICENSOR'S TOTAL AGGREGATE LIABILITY UNDER THIS AGREEMENT SHALL NOT EXCEED THE TOTAL LICENSE FEES PAID OR PAYABLE BY THE LICENSEE IN THE 12 MONTHS PRECEDING THE EVENT GIVING RISE TO THE CLAIM.
7.3 Nothing in this Agreement excludes or limits liability for fraud, willful misconduct, or any liability that cannot be excluded by law.
8. GENERAL PROVISIONS
8.1 Entire Agreement. This Agreement constitutes the entire agreement between the Parties with respect to its subject matter and supersedes all prior agreements and understandings.
8.2 Amendment. No amendment shall be effective unless made in writing and signed by authorized representatives of both Parties.
8.3 Waiver. No failure or delay in exercising any right shall constitute a waiver.
8.4 Severability. If any provision is held invalid, the remaining provisions shall remain in full force.
8.5 Assignment. The Licensee may not assign this Agreement without the Licensor's prior written consent.
8.6 Notices. Notices shall be in writing and may be delivered by hand, certified mail, or email to: Licensor: [Licensor Email]; Licensee: [Licensee Email].
9. GOVERNING LAW AND JURISDICTION
9.1 This Agreement shall be governed by and construed in accordance with the laws of the State of [Governing State], without regard to its conflicts of law principles.
9.2 Any dispute arising out of or relating to this Agreement shall be subject to the exclusive jurisdiction of the state and federal courts located in [Governing State].
IN WITNESS WHEREOF, the Parties have executed this Software License Agreement as of the Effective Date first written above.
LICENSOR
[Licensor Name]
[Licensor Address], [Licensor City], [Licensor State] [Licensor Zip]
LICENSEE
[Licensee Name]
[Licensee Address], [Licensee City], [Licensee State] [Licensee Zip]
Licensor
________________
Signature
Date: ________________
Licensee
________________
Signature
Date: ________________
What Is a Software License Agreement?
A Software License Agreement in the United States records the obligations the parties accept and the terms governing their arrangement.
Under United States copyright law, specifically the Copyright Act (17 U.S.C. 101 et seq.), computer software is protected as a literary work. The copyright owner has exclusive rights to reproduce, prepare derivative works, distribute copies, and publicly display the work. A software license agreement is the legal mechanism by which the copyright owner grants permission for others to use the software without transferring ownership.
The Digital Millennium Copyright Act (DMCA) (17 U.S.C. 1201 et seq.) provides additional protections for software by prohibiting the circumvention of technological protection measures and the trafficking in circumvention devices. The DMCA includes limited exceptions for reverse engineering for interoperability purposes (17 U.S.C. 1201(f)), security testing (17 U.S.C. 1201(j)), and encryption research (17 U.S.C. 1201(g)).
The Uniform Commercial Code (UCC), adopted in all 50 states, governs certain aspects of software transactions. While UCC Article 2 governs sales of goods, its application to software licenses is debated. Some courts have applied Article 2 by analogy to software licenses, while others have treated software licenses as service contracts or sui generis transactions. The proposed UCC Article 2B (later developed into the Uniform Computer Information Transactions Act, or UCITA) was intended to address software licensing specifically but was adopted by only two states (Maryland and Virginia).
When Do You Need a Software License Agreement?
A Software License Agreement is needed whenever a software owner wishes to grant another party the right to use its software while retaining ownership and control over the intellectual property. The agreement is essential for commercial software transactions, internal business software deployments, SaaS arrangements, enterprise software licensing, and any situation where software is made available to third parties.
For software developers and publishers, a license agreement is critical to protect intellectual property rights, define the scope of permitted use, limit liability, and establish revenue streams through license fees. Without a written agreement, the Licensor may have difficulty enforcing restrictions on use, copying, or distribution.
For businesses acquiring software, a license agreement establishes the legal right to use the software, defines the scope of that right (including the number of authorized users, territory, and duration), and establishes the Licensor's obligations regarding support, maintenance, and warranties.
The agreement should be executed before the Licensee gains access to the software. It should be reviewed whenever the terms of use change, when additional users or locations are added, when the license is renewed, or when the software is upgraded to a new version.
Companies subject to regulatory requirements (such as SOX compliance for public companies) may need to confirm that software license agreements include appropriate audit rights, data protection provisions, and compliance certifications.
What to Include in Your Software License Agreement
A complete Software License Agreement must address several essential elements to protect both parties and comply with U.S. intellectual property and contract law.
The grant of license should specify whether the license is exclusive, non-exclusive, or sole; define the permitted purpose; identify the territory; and state the duration. The license should clarify that only object code access is granted unless source code access is specifically included.
The license fee section should state the total fee amount, the payment schedule, applicable taxes, and consequences of late payment. Interest on late payments should comply with applicable state usury laws.
Intellectual property provisions should clearly state that ownership of the software remains with the Licensor, reference the Copyright Act (17 U.S.C.) protections, and include DMCA anti-circumvention obligations. The Licensee should be prohibited from removing proprietary notices.
Restrictions on use should address reverse engineering, decompilation, modification, sublicensing, and unauthorized copying, while respecting the statutory exceptions under 17 U.S.C. 117 (backup copies) and the DMCA interoperability exception.
The warranty section should clearly state whether the Licensor provides any warranty (typically that the software will perform materially in accordance with its documentation) and should disclaim implied warranties to the maximum extent permitted by the UCC and applicable state law.
The limitation of liability should cap the Licensor's aggregate liability (typically at the license fees paid in the preceding 12 months) and exclude consequential, incidental, and punitive damages. The governing law and jurisdiction clause should identify the applicable state law and exclusive forum for disputes.
Sources & Citations
Statutory citations link to official government sources.
- 17 U.S.C. 101US – Cornell LII
- 17 U.S.C. 1201US – Cornell LII
- 17 U.S.C. 117US – Cornell LII
- SOXUS – Cornell LII
Cite this page
Reference this free template in an article, syllabus, or research note:
Forms Legal. (2026). Software License Agreement (United States) [Legal document template]. Forms Legal. https://forms-legal.com/usa/business/contracts/software-license-agreement
"Software License Agreement (United States)." Forms Legal, 2026, https://forms-legal.com/usa/business/contracts/software-license-agreement.
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author = {{Forms Legal}},
title = {Software License Agreement (United States)},
year = {2026},
howpublished = {\url{https://forms-legal.com/usa/business/contracts/software-license-agreement}},
note = {Free legal document template. Based on Uniform Commercial Code (UCC)}
}Also available for these jurisdictions:
Frequently Asked Questions
A Software License Agreement is legally binding in the United States once the parties capable of contracting sign it with the intent to be bound under Uniform Commercial Code (UCC). American contract law, drawn from the Restatement (Second) of Contracts and each state's common law, recognizes a Software License Agreement as enforceable when it shows offer, acceptance, consideration, and reasonably definite terms. Courts in the state whose law governs the agreement will hold the parties to its written terms unless a party proves fraud, duress, mistake, unconscionability, or that the subject matter is illegal. A signed Software License Agreement carries more evidentiary weight than an oral understanding because the writing fixes what each party promised and reduces later disputes over who agreed to what. To strengthen enforceability, the parties should each keep an original signed copy, date their signatures, and complete every blank rather than leaving terms open to interpretation by a judge.
A Software License Agreement in the United States must satisfy the core elements of a valid contract: mutual assent shown by offer and acceptance, consideration exchanged between the parties, the legal capacity of each signer, and a lawful purpose. The relevant framework is Uniform Commercial Code (UCC) governs how the document is interpreted and enforced. The writing should clearly identify each party by full legal name, describe the rights and obligations of each side, and state the effective date and any term or expiration. Where one party is a business entity, the person signing should hold authority to bind that entity, such as an officer, manager, or member. Specific states may add formalities for certain agreements, so the parties should confirm local rules before signing. A Software License Agreement that omits a material term, leaves the price or duration blank, or fails to identify the parties accurately risks being found too uncertain for a court to enforce.
A Software License Agreement does not require notarization or witnesses to be enforceable in most US states, because a commercial contract takes effect when the parties sign it with the intent to be bound. American contract law makes the agreement valid based on offer, acceptance, and consideration rather than on any formal execution ceremony. Notarization is optional but can add evidentiary weight to a Software License Agreement by making it harder for a signer to deny the signature later, which is useful for high-value or long-term agreements. Certain contracts within the Statute of Frauds, including those that cannot be performed within one year or that involve the sale of goods of $500 or more under Uniform Commercial Code Section 2-201, must at least be in writing and signed by the party to be charged. For a typical Software License Agreement, signatures from both parties, with each keeping a dated original, are sufficient to make the agreement binding and provable.
A Software License Agreement can be terminated according to the termination clause it contains, by mutual agreement of the parties, or when one party's material breach excuses the other from further performance. A well-drafted Software License Agreement states how either side may end the relationship, for example on written notice of a defined number of days, on completion of the work, or for cause after a chance to cure. Where the contract is silent, US courts may imply a reasonable notice period for ongoing arrangements, but relying on an implied term invites dispute. Termination does not erase obligations that have already accrued, so amounts owed for work performed before termination usually remain payable. Including clear termination, notice, and survival provisions in a Software License Agreement that cover confidentiality, payment, and dispute resolution after the contract ends gives both parties certainty about how and when the relationship can be wound down.
A Software License Agreement can be amended after signing when all parties agree to the change and record it in writing. Under general US contract principles, an amendment is itself a contract, so it needs the same mutual assent and, in many states, fresh consideration or a signed written modification to be enforceable. The cleanest method is a dated amendment or addendum that identifies the original Software License Agreement, states exactly which sections change, and is signed by everyone who signed the original. Striking through or handwriting edits on the signed original invites disputes about who approved the change and when, so a separate written amendment is the preferred approach. Where the agreement contains a 'no oral modification' clause, only a signed writing will alter the terms, and informal promises to change the deal will not bind the parties. Keeping each amendment attached to the original Software License Agreement preserves a complete record of the parties' final agreement.
A Software License Agreement does not require a lawyer in most routine situations, and many individuals and small businesses prepare one using a clear written template that covers the standard terms. American law does not condition the validity of a Software License Agreement on attorney involvement; what matters is that the parties understand the terms and sign voluntarily. Legal review becomes worthwhile when the amounts at stake are large, the relationship is complex, the parties are in different states, or the agreement involves unusual conditions, tax consequences, or rights that are difficult to reverse. An attorney can confirm the document complies with the governing state's law and tailor clauses such as indemnification, dispute resolution, and termination. For straightforward matters, a carefully completed Software License Agreement from forms-legal.com gives the parties a solid written record; consulting a licensed attorney remains the safer path whenever the consequences of a mistake would be costly or hard to undo.
This template is provided for informational purposes only and does not constitute legal advice. Laws vary by jurisdiction and change over time. Consult a qualified attorney for advice specific to your situation.Full disclaimer
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