An End User License Agreement, or EULA, is the contract a proprietary software vendor presents to the person who will run the program. It is the everyday face of software licensing for most computer users: the wall of text that appears during installation, ending in an “I agree” button that must be clicked before the software will proceed. Where a free software license is written to grant rights, a typical EULA is written to withhold them, spelling out what the user may not do with software they have paid for.
EULAs are usually delivered in one of two forms. A shrink-wrap license is printed on or inside the packaging of boxed software, with the theory that opening the shrink wrap signals acceptance of the terms inside. A click-wrap license is its digital successor, presenting the terms on screen and requiring an affirmative click to continue. Both formats raised the same legal question of whether a user can be bound by terms they had no chance to negotiate and often did not read, a question that courts in various jurisdictions have answered in differing and sometimes grudging ways.
The substance of a typical EULA is restrictive. It commonly grants only a limited, revocable right to use the program, while forbidding copying beyond a backup, modification, redistribution, and reverse engineering, and disclaiming warranties and liability. The user does not buy the software in the way one buys a book; the vendor’s position is that the software is licensed, not sold, and the EULA defines the narrow envelope of permitted behavior.
This is the precise mirror image of how free software licenses operate. The Free Software Foundation defines free software around granted freedoms: as gnu.org states, the freedom “to run the program as you wish, for any purpose,” to study and change it, to redistribute copies, and to distribute modified versions. The Open Source Definition similarly requires free redistribution, available source code, and the right to make and distribute derived works. A free or open license adds permissions a user would not otherwise have; a restrictive EULA subtracts them, or at least declines to grant them.
The contrast is more than rhetorical. It marks the dividing line of the entire free and open source movement. The EULA represents the proprietary model in which the vendor retains control and the user receives a constrained privilege, while the free software license represents the model in which control is handed to the user. Reading a license to see whether it grants freedoms or merely restricts behavior is, in the end, the simplest test of which side of that line a given piece of software falls on.