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Microsoft License Agreement

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MICROSOFT LICENSE AGREEMENT

This Microsoft License Agreement ("Agreement") is entered into as of by and between Licensor Name: with principal place of business at ("Licensor"), and Licensee Name: with principal place of business at ("Licensee").

RECITALS

WHEREAS, Licensor develops, owns, and licenses proprietary software and associated documentation and services, including the software described as (the "Licensed Software");

WHEREAS, Licensee desires to obtain and Licensor desires to grant a license to use the Licensed Software on the terms and conditions set forth in this Agreement;

WHEREAS, the parties intend that this Agreement govern the license grant, fees, support obligations (if any), confidentiality, intellectual property, indemnities, and limitations of liability applicable to the Licensed Software.

NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein, the parties agree as follows:

1. GRANT OF LICENSE

1.1 License Grant. Subject to the terms and conditions of this Agreement and payment of applicable fees, Licensor hereby grants to Licensee a non-exclusive, non-transferable, non-sublicensable license to install and use the Licensed Software solely for Licensee's internal business operations during the Term and in the Territory specified. The license granted is limited to:

(a) Number of authorized users or seats:   (b) Authorized territory: .

2. LICENSE RESTRICTIONS

Licensee shall not, and shall ensure its users do not: (a) copy the Licensed Software except as reasonably necessary for permitted use; (b) modify, create derivative works of, decompile, disassemble or reverse engineer the Licensed Software except to the extent expressly permitted by applicable law notwithstanding this restriction; (c) remove, alter, or obscure any proprietary notices or labels; (d) sublicense, distribute, lease, rent, timeshare or otherwise assign rights in the Licensed Software except as expressly permitted in this Agreement. Any use beyond the scope of the license constitutes a material breach.

3. DELIVERY, INSTALLATION, AND ACCEPTANCE

Licensor shall deliver the Licensed Software in object code form by electronic delivery or other agreed mechanism. Licensee shall have an acceptance period of days from delivery to report nonconformities. Failure to notify Licensor of nonconformities within such period shall constitute acceptance.

4. FEES AND PAYMENT

4.1 Fees. In consideration for the license grant, Licensee shall pay Licensor license fees in the amount of (currency: ).

4.2 Payment Terms. Fees are due within days of invoice. Late payments shall accrue interest at the lesser of 1.5% per month or the maximum rate permitted by law. Licensee is responsible for all taxes (other than Licensor's income taxes) associated with the fees.

5. MAINTENANCE AND SUPPORT

5.1 Support Services. Support and maintenance services will be provided only if Licensee purchases a support plan. Support included: Yes   If included, support fees: .

5.2 Updates. Licensor may from time to time provide updates, patches or upgrades. Delivery of updates shall be governed by Licensor's update policy and, where applicable, Licensee's paid support entitlements.

6. INTELLECTUAL PROPERTY

Licensor retains all right, title and interest in and to the Licensed Software, including all intellectual property rights. Licensee acquires no rights in the Licensed Software other than the limited license rights expressly granted in this Agreement. Licensee shall not challenge Licensor's ownership or the validity of Licensor's intellectual property.

7. CONFIDENTIALITY

Each party shall treat as confidential and shall not disclose the other party's Confidential Information except to its employees and contractors on a need-to-know basis and who are bound by confidentiality obligations. Confidential Information includes non-public technical, business, and pricing information, and the Licensed Software and its source code. Confidentiality obligations shall survive termination of this Agreement for a period of five (5) years.

8. WARRANTIES; DISCLAIMER

8.1 Limited Warranty. Licensor warrants that the Licensed Software will perform materially in accordance with its documentation for a period of days following delivery. Licensee's exclusive remedy for breach of this warranty will be, at Licensor's option, repair or replacement of the nonconforming portion or refund of fees paid for such Licensed Software.

8.2 Disclaimer. EXCEPT FOR THE LIMITED WARRANTY SET FORTH ABOVE, THE LICENSED SOFTWARE IS PROVIDED "AS IS" AND LICENSOR DISCLAIMS ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE, AND NON-INFRINGEMENT, TO THE MAXIMUM EXTENT PERMITTED BY LAW.

9. LIMITATION OF LIABILITY

EXCEPT FOR LIABILITY ARISING FROM WILLFUL MISCONDUCT, GROSS NEGLIGENCE, DEATH OR BODILY INJURY, OR A PARTY'S BREACH OF CONFIDENTIALITY OR INDEMNITY OBLIGATIONS, IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL OR PUNITIVE DAMAGES. THE AGGREGATE LIABILITY OF LICENSOR FOR ANY CLAIM ARISING OUT OF THIS AGREEMENT SHALL NOT EXCEED THE TOTAL FEES PAID BY LICENSEE TO LICENSOR UNDER THIS AGREEMENT DURING THE TWELVE (12) MONTHS PRECEDING THE EVENT GIVING RISE TO THE CLAIM.

10. INDEMNIFICATION

10.1 Licensor Indemnity. Licensor shall defend Licensee against any third-party claim that the Licensed Software, as delivered by Licensor and used as permitted under this Agreement, infringes a third party's intellectual property rights, and shall pay resulting damages finally awarded against Licensee or agreed in settlement, provided Licensor is promptly notified in writing and allowed to control the defense and settlement.

10.2 Licensee Indemnity. Licensee shall indemnify, defend and hold Licensor harmless from and against any third-party claim arising from Licensee's use of the Licensed Software in violation of this Agreement or modification of the Licensed Software by Licensee.

11. TERM AND TERMINATION

11.1 Term. The term of this Agreement shall commence on the Effective Date and continue for a period of year(s) (the "Term"), unless earlier terminated in accordance with this Agreement.

11.2 Termination for Cause. Either party may terminate this Agreement upon written notice if the other party materially breaches this Agreement and fails to cure such breach within thirty (30) days of receipt of written notice thereof. Termination shall be without prejudice to any accrued rights or remedies.

11.3 Effect of Termination. Upon termination, Licensee shall cease all use of the Licensed Software, return or destroy copies as directed by Licensor, and certify in writing that it has complied with these obligations. Termination does not relieve Licensee of obligations to pay accrued fees.

12. AUDIT RIGHTS

Licensor may audit Licensee's use of the Licensed Software to verify compliance with this Agreement upon reasonable notice and during normal business hours. If an audit reveals underpayment, Licensee shall promptly pay the deficiency and reimburse Licensor for the reasonable cost of the audit if underpayment exceeds five percent (5%) of amounts due.

13. NOTICES

14. ASSIGNMENT

Neither party may assign this Agreement or any rights or obligations hereunder without the prior written consent of the other party, except that Licensor may assign to an affiliate or in connection with a merger or sale of substantially all of its assets. Any attempted assignment in violation of this Section is void.

15. GOVERNING LAW; VENUE

This Agreement shall be governed by and construed in accordance with the laws of the state or jurisdiction specified: , without regard to conflict of law principles. The parties submit to the exclusive jurisdiction of the courts located in that jurisdiction for disputes arising under this Agreement.

16. AMENDMENT; WAIVER; SEVERABILITY; ENTIRE AGREEMENT

This Agreement may be amended only by a written instrument signed by authorized representatives of both parties. No failure or delay by either party to exercise any right shall operate as a waiver. If any provision is held invalid or unenforceable, the remaining provisions shall remain in full force and effect. This Agreement constitutes the entire agreement between the parties concerning the Licensed Software and supersedes all prior understandings and agreements.

17. EXPORT COMPLIANCE

Each party shall comply with all applicable export and import control laws and regulations. Licensee shall not export or re-export the Licensed Software to any country, person or entity prohibited by applicable law.

18. MISCELLANEOUS

The parties acknowledge that they have read this Agreement, understand it, and agree to be bound by its terms. Headings are for convenience only and do not affect interpretation. Where the context requires, singular includes plural.

Licensor Printed Name:

By:

Date:

Licensee Printed Name:

By:

Date:

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What the Microsoft License Agreement Covers

A Microsoft License Agreement is a legally binding contract that governs the use, distribution, and support of Microsoft software and related services between a licensor and a licensee. It defines permitted uses, license scope, number of users or devices, duration, fees, maintenance and update rights, intellectual property ownership, and restrictions. The agreement may also include compliance, export controls, warranty disclaimers, indemnities, and termination provisions that allocate risk and outline remedies for breach.

Why a Clear License Agreement Matters

A well-drafted Microsoft License Agreement reduces legal uncertainty by specifying rights, obligations, and payment terms, and it helps prevent disputes over permitted use, updates, pricing, and liability under ESIGN (15 U.S.C. ch. 96) and applicable state contract law.

Why a Clear License Agreement Matters

Who Typically Handles and Signs These Agreements

Multiple internal teams and external partners commonly engage with Microsoft License Agreements depending on the organization and transaction complexity.

  • IT Procurement teams managing license counts, deployments, and compliance across users and devices.
  • Legal Counsel drafting or reviewing terms, indemnities, export controls, and IP clauses.
  • Finance and Accounts Payable handling payment terms, invoicing, and renewal schedules.

The final signature commonly rests with the authorized contracting officer, CFO, or delegated signing authority based on company policy and delegation thresholds.

Core Elements to Expect in a Microsoft License Agreement

A professional Microsoft License Agreement contains several standard sections that establish how the software may be used and how disputes and support are handled.

Parties

Identifies licensor and licensee by full legal name, including corporate form and registered address to ensure enforceability and correct contracting parties.

Grant of License

Specifies license type (perpetual, term, subscription), scope (users, devices, cores), and any territorial or field-of-use restrictions that limit authorized use.

Scope & Restrictions

Lists permitted and prohibited actions such as reverse engineering, sublicensing, or transferring rights, and clarifies rights for backups, testing, and virtualization.

Fees & Payment

States license fees, billing cycle, taxes, late payment remedies, audit rights for usage-based licensing, and consequences for under- or over-reporting.

Term & Termination

Defines initial term, renewal mechanics, notice periods, cure windows for breaches, and post-termination obligations such as uninstall and data return.

IP & Confidentiality

Allocates intellectual property ownership, includes confidentiality covenants, and sets limits for data use and disclosure to comply with privacy laws.

Required Information and Security Considerations

Legal Names: Full registered legal entity
License Scope: Users, devices, or cores
Effective Date: MM/DD/YYYY format
Payment Terms: Net terms and currency
Encryption: AES-256 at rest
Transport Security: TLS 1.2/1.3 in transit

Step-by-Step: Completing a Microsoft License Agreement

Follow these steps in order to prepare, review, and execute the agreement properly and reduce negotiation cycles.

  • 01
    Gather documents: Collect prior agreements, SOWs, and purchase orders for reference.
  • 02
    Define scope: Set user/device counts, environment, and permitted uses clearly.
  • 03
    Legal review: Have counsel check indemnities, export controls, and IP terms.
  • 04
    Execute and retain: Get authorized signatures and save the signed record with audit trail.

How to Configure an Online Workflow for License Execution

Set up a digital workflow to standardize approvals, collect signatures in order, and retain an auditable record of execution.

Field Configuration
Template Create a finalized master agreement template
Signer Order Define sequential or parallel signing roles
Authentication Use email, SMS code, or advanced ID verification
Retention Enable automatic archive and version history

Where to Send and How Execution Works

A typical execution flow routes the agreement to internal approvers and external signers, capturing evidence of consent and completion.

  • Upload Document: Add the finalized agreement PDF or DOCX to the platform
  • Place Fields: Add signature, date, and initial fields where required
  • Add Signers: Enter signer emails and assign roles
  • Send for Signature: Dispatch via email or secure link and capture audit trail

Digital Signing and Integration Considerations

Choose a platform that supports required security, authentication, and integrations for enterprise licensing workflows.

  • File Formats: PDF, DOCX, and editable templates
  • Integrations: Salesforce, Microsoft 365, NetSuite
  • Authentication: Email, SMS, and advanced KBA options

Ensure the platform preserves an auditable certificate of completion and supports your retention and compliance requirements, including ESIGN (15 U.S.C. §7001) and UETA where applicable.

Key Dates and Notice Periods to Track

License agreements include dates that trigger obligations, renewals, audits, and termination rights; track these in a contract calendar.

Execution Date:

Date parties sign; marks the start of obligations

Effective Date:

When license rights commence; may differ from execution date

Renewal Notice:

Typically 30–90 days before automatic renewal

Audit Window:

Vendor audit rights often specify notice and inspection timing

Termination Notice:

Contract will define cure period and notice length

Key Milestones and Contract Processing Stages

Track these sequential milestones to ensure timely approvals, signature capture, and post-execution obligations.

01

Drafting Complete

Final internal review completed before external negotiation

02

Legal Approval

Counsel signs off on risk, indemnity, and IP clauses

03

Signatures Obtained

All authorized parties have executed the agreement

04

Archive and Audit

Store signed PDF and retention metadata for compliance

Common Preparation Mistakes to Avoid

  • Using abbreviated or informal party names that do not match legal registrations, causing enforceability and payment issues.
  • Failing to specify license metrics precisely (users, cores, devices), which leads to audit disputes and unexpected fees.
  • Neglecting export-control or export-classification language for software distributed across borders, risking compliance violations.
  • Leaving termination and post-termination data obligations vague, making rollback and data retention disputes more likely.

Practical Risks and Potential Penalties

Contract Damages: Liability for breach
Loss of License: Access suspension or termination
Audit Adjustments: Retroactive fees and penalties
Regulatory Fines: Export or privacy violations
Data Liability: Breach remediation costs
Signature Risks: Invalid signature disputes

eSignature Pricing and Feature Snapshot for License Workflows

Comparison of common eSignature vendors useful for executing Microsoft License Agreements. signNow is listed first per vendor comparison conventions.

signNow DocuSign Adobe Sign PandaDoc HelloSign
Starting Price $8/user/mo $15/user/mo $14/user/mo $19/user/mo $15/user/mo
Free Trial 7-day free trial Varies by plan Varies by plan Varies by plan Varies by plan
Bulk Send Yes (Business Premium) Yes Yes Yes No
Audit Trail Yes Yes Yes Yes Yes
HIPAA Compliant Yes Yes Yes No No

FAQs and Troubleshooting for Microsoft License Agreements

Answers to common questions about execution, enforceability, signature validity, and common post-signature issues.


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