Business Contracts When an EULA is needed, or are ToU sufficient?

[upa1218]

Jurisdiction

Delaware

Does an online subscription based tool need a subscriber to agree to an End User License Agreement or would a subscriber agreeing to the website's Terms of Use and Privacy Policy be sufficient? When do you transition from where the ToU aren't sufficient, and an EULA is needed?

 

[army judge]

The answer is tied to your product, good, or service you dispense.

 

[Michael Wechsler]

Does an online subscription based tool need a subscriber to agree to an End User License Agreement or would a subscriber agreeing to the website's Terms of Use and Privacy Policy be sufficient? When do you transition from where the ToU aren't sufficient, and an EULA is needed?

As @army judge said, it depends upon the situation. A EULA = End User License Agreement. This is really more of a way to categorize a type of legal document and not any requirement that a separate agreement must be created. When a EULA or other legal document is used it is usually because there will be additional or different legal terms which will be applied for use of proprietary software versus the general use of the website. For example, you may be able to use this legal website in your browser - reading, citing by providing hyperlinks, etc. But you really don't get a copy of the site to distribute elsewhere. If you were downloading software from the site, such as a Windows or Mac based application to conduct legal research on your computer, it would probably contain a EULA / End User License Agreement for the software itself.

Let's consider the situation of an online subscription tool. If the website consists of nothing more than the subscription service, you can theoretically use your website's term of use to refer to any use of the site and the services provided through the website. There is no physical copy being provided. And most important for both of these is ensuring that the user has had been provided with the ability to read and accept the legal terms prior to the purchase of a product or service. You would probably want an appropriate click-through agreement that doesn't place terms on the user only after accepting purchase of the service, which is called a "contract of adhesion." This is why a number of websites include all their legal terms openly as a link on their website (usually the footer) which the user can review at any time and is provided with a link prior to purchase of the service.

The bottom line is this. You can roll all your legal terms into one agreement, separate them nicely into sections and call it "legal terms" and all should be fine. These separate agreements are usually created where convenient or needed, e.g. in the App Store or Google Play where you might have to agree to general legal terms but you want to bind the End User downloading your app to specific end user terms of agreement. Hope this makes sense.