How To Write An End User Licence Agreement (eula) In 2025
Last Updated on May 10, 2025
Creating a clear, enforceable End User Licence Agreement (EULA) is critical for protecting your software and complying with Canadian law. Whether you're building a SaaS platform, mobile app, or desktop application, your EULA needs to outline licensing rights, usage restrictions, and legal protections. This comprehensive guide walks you through how to draft a EULA - and how to ensure it's both enforceable and user-friendly.
What Is a EULA and Why It Matters
A EULA is a contract between you (the software provider) and your users, granting them a licence to use your product under defined terms. It prevents unauthorized use, clarifies liability, and supports IP protection. In Canada, it's a foundational document for software compliance.
Step 1: Identify the Parties and Scope of Use
Start by identifying the licensor (you or your business) and the licensee (the end user). State the type of licence granted (e.g., non-exclusive, limited, non-transferable) and specify how the software may be used — including device limits, commercial restrictions, and geographic use.
Step 2: Add Usage Restrictions
Clearly state what users cannot do, such as reverse engineering, sublicensing, reselling, or modifying the software. This limits liability and supports enforcement.
Step 3: Clarify Ownership of IP
State that you retain full ownership of all software code, trademarks, and content. If you use open-source components, include notices or licensing disclosures where required.
Step 4: Limit Your Liability
Include a warranty disclaimer and limit your liability for indirect, incidental, or consequential damages. Set a monetary cap on any claims - often limited to the amount paid for the software.
Step 5: Define Termination Rights
Describe when and how the agreement can be terminated - for example, upon breach, non-payment, or policy violations. Specify that upon termination, the user must delete or uninstall the software.
Step 6: Set the Governing Law (Jurisdiction)
In Canada, this clause ensures the agreement is enforceable under a specific province’s laws. Common options include Ontario, British Columbia, or Quebec. Also, specify that any legal disputes will be resolved in that jurisdiction.
Step 7: Include Acceptance Terms (Clickwrap)
To be enforceable, the EULA must be presented before or during software installation or access, with an "I Agree" checkbox. This method - called clickwrap - is favored by Canadian courts.
Step 8: Keep the Language Clear and Concise
Avoid complex legal jargon. Use plain English and organize the EULA into bullet points and short sections. This makes the agreement more transparent and user-friendly, increasing legal enforceability.
Step 9: Tailor the EULA to Your Platform
- SaaS: Address uptime, user seats, auto-renewal, and subscription billing.
- Mobile apps: Ensure compliance with Google/Apple distribution requirements.
- Desktop: Include licensing limits by machine or user count.
Step 10: Link to Related Policies
Reference other relevant documents, such as your Privacy Policy and Terms of Service, but don’t merge them into the EULA. Each serves a distinct legal purpose.
Final Checklist for a Legally Valid EULA
- Clear grant of licence and restrictions
- Limitations of liability
- Ownership of IP
- Termination clause
- Governing law in Canada
- User acceptance via clickwrap
Download a Free EULA Template
Use our free, lawyer-reviewed Canadian EULA template to protect your software. It’s fully editable and designed for SaaS, mobile apps, and commercial software.
Download the Free End User Licence Agreement Eula Template
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Frequently Asked Questions
Answers to common questions about How To Write An End User Licence Agreement (eula) In 2025.
What happens if a user violates the EULA?
You may be able to revoke access, terminate the licence, or pursue damages through civil court - if the EULA is properly drafted and accepted.
Should I use a separate EULA for each product version?
Yes, if the functionality or licensing structure changes significantly. Use version control to track and manage updates.
Is a EULA enforceable if the user never reads it?
Yes, as long as the user is required to actively accept the terms (via clickwrap) before using the software.
Can I enforce a EULA against a business, not just an individual?
Yes, if the business or its representative accepts the agreement and the licence is issued to the organization.
Do I need a different EULA for enterprise clients?
Often, yes. Larger clients may require a custom negotiated agreement or master licence tailored to their legal team’s standards.
Do I need to register my EULA with a legal authority?
No. Once signed or accepted digitally, a EULA is enforceable like any other contract in Canada.
Can I use a US EULA for Canadian users?
It’s not recommended. Legal terms, jurisdiction, and privacy obligations differ between the two countries.
Can I copy another company’s EULA?
Never. Your EULA should reflect your actual product, features, and risks. Copying may expose you to copyright issues and legal gaps.
Is it okay to include my refund policy in a EULA?
You should link to it or include a clause referencing your refund and billing terms, especially for subscription software.
How often should I update my EULA?
At least once a year, or whenever you launch new features, change your pricing model, or expand internationally.
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