Eula Vs Terms Of Service: Difference And What You Need?
Last Updated on May 10, 2025
If you're launching a software product, web app, or online service, you've likely encountered the terms End User Licence Agreement (EULA) and Terms of Service (ToS). While they sound similar and often work together, they serve very different legal and functional purposes. In this guide, we break down the key differences, use cases, and whether your business needs one, the other - or both.
What Is a EULA?
A EULA (End User Licence Agreement) is a legal contract between a software provider (licensor) and the end user (licensee). It grants the user a licence to use a software product under specific conditions, without transferring ownership.
EULAs typically include:
- Licence scope (personal, non-transferable, limited use)
- Restrictions (no resale, reverse engineering, etc.)
- Intellectual property ownership
- Termination clauses
- Governing law and jurisdiction
EULAs are most commonly used for:
- SaaS products
- Desktop software
- Mobile apps
- Video games and downloadable software
What Are Terms of Service (ToS)?
Terms of Service (also known as Terms and Conditions) govern the use of an online service, platform, or website. They define how users interact with your service, what conduct is allowed, and what liabilities you disclaim.
Terms of Service typically include:
- User responsibilities and acceptable use
- Account creation and security
- Dispute resolution and arbitration
- Service availability disclaimers
- Content ownership and moderation
ToS are critical for platforms that offer:
- Online marketplaces
- Subscription services
- Community-based apps
- API access or integrations
Key Differences Between EULA and Terms of Service
| Feature | EULA | Terms of Service |
| Legal Function | Grants a software licence | Governs platform/service use |
| Audience | Software users | Platform users or members |
| Content | Licence, IP rights, usage limits | Conduct, account, content, dispute terms |
| Applies To | Installed/downloadable software | Web platforms, SaaS, digital services |
| Enforceability | Requires active acceptance | Often included during sign-up |
When Do You Need a EULA vs Terms of Service?
Use a EULA if you...
- Sell or licence downloadable software
- Distribute a mobile app or desktop application
- Want to retain full IP rights and limit how your software is used
Use Terms of Service if you...
- Run a web-based SaaS platform
- Allow users to create accounts or post content
- Offer services, subscriptions, or digital communities
Use both if you...
- Offer a SaaS product with downloadable components
- Operate a digital platform AND licence proprietary tools
- Need to cover software use and user conduct separately
Can You Combine a EULA and Terms of Service?
While they can be referenced together, it’s best to keep them as separate documents. Each addresses a different legal relationship. You can link to both agreements during onboarding or checkout but keep the purposes distinct.
Download Free Templates
Need help? Download our free, reviewed Canadian EULA and Terms of Service templates. Customize them for your software, app, or SaaS business.
Download the Free End User Licence Agreement Eula Template
Ready to apply what you've learned? Get instant access to the End User Licence Agreement Eula PDF - free, editable, and built for Canadian businesses. No sign-up required.
Frequently Asked Questions
Answers to common questions about Eula Vs Terms Of Service: Difference And What You Need?.
Is a EULA required if I already have Terms of Service?
Yes, if you distribute software. ToS do not grant a licence - they govern behavior, not usage rights.
Can I merge my EULA and ToS into one document?
You can, but it’s not recommended. It may reduce clarity and increase legal risk.
Do I need a lawyer to write these documents?
No, but legal review is smart - especially if your software handles sensitive data or monetizes usage.
Are these documents enforceable in Canada?
Yes, if accepted properly (e.g., clickwrap), written in clear language, and compliant with Canadian contract law.
What’s the biggest mistake businesses make with these agreements?
Using generic templates without tailoring. Every clause should reflect your actual product, model, and risk exposure.
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