The acronym, EULA, stands for End-User License Agreement, and is also sometimes referred to as a software license agreement.
An End-User License Agreement is a contract that allows a user to purchase the rights to use a software application from its publisher.
The parties in a EULA are:
- Vendor: Also known as a licensor, publisher, or author of the software, the vendor sells the rights to use their software to a user.
- Licensee: Also known as the purchaser, the licensee is the user who purchases the rights to use the vendor's software.
A EULA is similar to a rental agreement where, rather than renting property or physical goods, the licensee pays to use the software in the manner stipulated in the contract. This means the user complies with any and all restrictions stated in the EULA by the software author or publisher. These restrictions can include a time limit of use (e.g. a subscription), a limited number of downloads (e.g. installation on 5 computers or other electronic devices), and more.
It's commonly seen as a popup after you've downloaded a new computer program or completed a recent operating system update. Some software might be sold with a physical EULA enclosed that comes into effect once the seal is broken or the software is downloaded.