Software terms and conditions

Do you pay enough attention when saying 'yes' to software manufacturers' terms and conditions?

Do you click on the button marked Next when the licence agreement for your new software pops up?

Do you read the text in the agreement before clicking? Be honest.

We often just click to agree to the terms without reading first, too. But did you know that clicking through this is a legally binding contract?

We’re going to take a look at what licence agreements do – and explain how they affect you.

Be careful what you sign
We are not going to say that reading the terms and conditions that come with programs is going to be interesting, but you should take the time to do so.

For example, the terms of use for Yahoo.co.uk state that Yahoo is granted the right to use any content that users post publicly on its website. So if you post an embarrassing photo of yourself in a conversation thread, you could become more famous than you bargained for.

Thankfully, Yahoo loses the right if you delete the content. Licence agreements are included with software because buying a disc does not give ownership, only the right to use the software. It is a little like a council-owned play park. The local byelaws give the right to use the park (indirectly, by paying taxes) but not ownership. This right can also be revoked if the byelaws are broken. Some other limitations may depend on the version of the software you are installing.

Companies often offer different prices for different users. A good example of this is the AVG Free antivirus software from Grisoft. This software is only offered for home users. If the software is installed on a business computer, the licence is no longer valid.

Licences also govern whether it is possible to make a backup copy of a software disk or not. Many games do not allow this, but if you bought a copy of Vista or XP on CD or DVD, for example, you may make one copy as a backup. You could not use the backup to install software on a second PC.

Weighty agreements
The good news is that as legal agreements, licences have obligations that work both ways. There is an obligation for the software supplier to make good their promises of what the software can do and the way the license is presented.

Reading a licence before buying software is rarely possible in the shop; even if you could open the box, the licence is seldom included on paper. Simon Halberstam, head of ecommerce at solicitors Sprecher Grier Halberstam, told us there are certain conditions that must be met before a licence agreement can be considered legally binding.

Both parties must know what the terms of the agreement are. This is why download links are at the bottom of webpages containing the agreement, or the Next button in the installation wizard only works when the bottom of the agreement has been reached. A summary is not enough to make a legally binding agreement.

One area of concern we raised with Mr Halberstam was software already installed on a computer.

The Windows licence agreement is displayed when the computer starts for the first time, but no licences are displayed for all the other software that is preloaded.

As the licence is not displayed before the software is used, Mr Halbertstam described them as “unreasonable and unenforceable”.

Although there is no case law about software licence agreements, there are similar cases that may apply. One is referred to as Shoelane Parking. A car was damaged in the car park, and the company that owned the car park tried to avoid paying damages. It pointed out there was a sign in the car park that denied liability. The judge held that because the sign could not be read from outside of the car park, it was not binding. It is likely that a similar approach would be taken with software licences.

Our research also found that software developers do not always put much effort into creating the licence agreements. A poll in the Codeproject newsletter found that only one in 10 of software developers use a lawyer to create a licence for each of their products. More than a third adapted licence agreements they had seen on rival products, assuming they would be suitable for their own programs.

The law is on your side too
It is vital to note that the law gives protection against unfair terms and conditions. Often the scariest sounding terms would never stand up in court. A common clause in licence agreements tells users that the company can change the terms of the agreement at any time without actively telling users, and continued use of the software is considered agreement.

Mr Halberstam said that this is unenforceable. Sometimes licence agreements may reveal advantages that are not well publicised. For example, Microsoft Office can be installed on two computers, a desktop and a notebook. The only limitation is they cannot be in use at the same time.

Power to the people
There is one licence that appears in a lot of programs, called the Gnu Public License (GPL) and it is rather different from others described above. The GPL offers more rights than most as software released under the GPL can be copied and modified freely. The main obligation is that the changes must be freely shared. More information about the GPL can be found at the Free Software Foundations website. The Foundation also has a directory of free software at http://directory.fsf.org/.

Conclusion
If you click ‘agree’ to the licence agreement without reading it when you install a piece of software, you’re human. But it’s well worth taking a bit of time to skim through the licence at the very least. There may be clauses that are not acceptable to you, or extra bonuses. Not all licence agreements are bad and they give rights as well as taking others away. Although few people get into legal difficulties, it is worthwhile to knowing what you are agreeing to.

Online software
It is one thing to quickly skim through the licence agreement from a big and well-respected company, but it’s quite another to do so with software downloaded from the internet. Many smaller software companies make advertising deals to cover costs. There may not be a financial cost to using the software but you may have to endure adverts.

Take extra care when reading the End User Licence Agreements – commonly known as EULAs – contained in ‘free’ software to make sure you are not agreeing to have spyware installed. Run antivirus and antispyware checks before installation.