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A software licensing agreement is a legal agreement that any user of a computer software has to accept and adhere to.

What is a software license?

A license is a legal permission to use the software created by a company that permits the user who gains it to use it according to the guidelines laid down by the company.

Ex: If you want to play a game say Need for Speed most wanted, you need to buy a legit CD from a retailer and install it in your computer. By doing so, you are obtaining a legal license to use the game/software

Do all software need licenses?

No. There are a lot of freewares available in the internet where the owners of the software allow users to use them freely. However, in case of copyrighted products, a license is a must.

Why do we need a license?

Any company, that creates a software would incur some expenses in creating the product. As a result, they sell it to the public to cover the cost and also to make a profit. By purchasing a legally licensed copy of the software, you are paying the due fees to the software creator so that his business can run fine.

Ex: When you buy a new laptop you would need an Operating System for it. If you buy an original Windows 7 CD by paying some XX USD, you are buying a license to use the software in your computer

What are the restrictions in a licensing agreement?

The restrictions applicable in a software license are always mentioned clearly in a document that comes with the software. Usually it will say something like:

  • Allowed to use in Upto 2 computers
  • To be used for non-business purposes only
  • Cannot be sold or modified with the creators explicit written consent

This means that - you can use it in 2 personal computers (not business computers in your office) and you cannot sell the software to anyone.

Usually the prices of software licenses for home/personal use are cheaper than the price at which they are sold to businesses and hence they add such a clause in the software that is sold in retail shops.

What if we dont follow the licensing agreements?

Breaking a software licensing agreement is a crime and the creator of the software can legally prosecute you. For example, if you buy a PC game and give it to 10 of your friends (when the CD says for use with at max 2 PC's) you are violating the terms of the license and the game creator can sue you. They will do so because, they could have sold 4 more copies of the game if you had not illegally distributed the game to your friends.

A point to note here is that, most companies have means and ways to identify such illegal distribution of their software and can track offenders who do so.

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13y ago

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