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This is Why You Need a Software Licensing Agreement

CM Advocates > Cyber Security, Privacy & Data Protection  > This is Why You Need a Software Licensing Agreement

This is Why You Need a Software Licensing Agreement

Contracts in general, look to provide a level of clarity and certainty on the underlying arrangement between the parties, as well as provide a channel for recourse as a result of the binding nature of a contract. In the same light, a software license agreement provides for the distribution of a software and specifies the rights of the buyer and the licensor.

Software developers frequently use this agreement as a result of the nature of their work that largely entails creating and owning a core application, customizing it for clients, and issuing a license to use it. By describing the use and limitations of the program, the Agreement clearly and succinctly establishes and safeguards the interests of the parties involved.

Such an agreement provides crucial information on the rights and limitations that a licensee would be bound by, as well as expressly providing for the manner in which software may be put to use. It therefore goes without say that both the licensor and licensee need to pay particular attention to a Software License Agreement, for these among many other reasons:


Control over the License

By granting license over to another, a licensor (being the persons owning the rights to the software) allows its users to purchase utility over a software product. A Software License Agreement allows you to keep more control of the product by placing restrictions on its usage and distribution to favorable terms. It allows you to retain your rights over the product and provides bandwidth to keep licensing and generate more income via license fees.

Protects against software infringement

Software licensing is prone to risks such as software piracy and/or copyright infringement. This is usually manifest in various forms such as:

  1. where potential licensee’s aid piracy by providing unauthorized access to your software;
  2. reproduce/replicate it and pass it off as their own creations; or
  3. using your protected intellectual property (IP) without permission.

A Software Licensing Agreement protects and prevents such abuses on your software and also keeps your product commercially invulnerable.

Limitation of Liability;

As a licensor, such an agreement allows you to limit your liability as a software developer, for any losses or damages incurred by the licensee, whether direct or indirect. You thus potentially limit exposing yourself to lawsuits which could take up valuable time and potential financial constraints.


Warranties over the Licensed software

As a Licensee, you need a Software Licensing Agreement that fully guarantees that the licensor’s title and property in the licensed software is free and unencumbered and therefore, has the power and authority to license the product. It is equally easier to get into an agreement where the licensor warrants that said product is free from defects in materials, design and workmanship.

How can we assist you?

At CM Advocates LLP, we have an experienced team of lawyers who can offer you legal assistance in drafting, developing and reviewing your Software License Agreements for your business. Please contact us for our services at  for more information on our services.

Contact Persons & Contributors

Susan Mwango – Associate


This article is for informational purposes only and should not be construed as legal advice.

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