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 If the software is installed on a business computer, the licence is no longer valid.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.