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Software Use Agreement

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SOFTWARE USE AGREEMENT

This Software Use Agreement (the Agreement) is entered into as of Effective Date: by and between Licensor Name: , a with principal place of business at and Licensee Name: with principal place of business at (each a Party and collectively the Parties).

RECITALS

WHEREAS, Licensor has developed and owns certain software identified as Software Name: , Version: (the Software); and

WHEREAS, Licensee desires to obtain and Licensor is willing to grant a limited right to use the Software on the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein and other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the Parties agree as follows:

1. DEFINITIONS

1.1 "Authorized Users" means employees, contractors and agents of Licensee who are expressly permitted to use the Software under this Agreement and who are bound by confidentiality obligations at least as protective as those contained herein.

1.2 "Documentation" means the user manuals, installation guides and other technical materials relating to the Software provided by Licensor to Licensee.

2. LICENSE GRANT

2.1 Subject to the terms and conditions of this Agreement, Licensor hereby grants to Licensee a non-exclusive, non-transferable, revocable license to use the Software and associated Documentation solely for Licensee's internal business purposes during the Term. The license is limited to Authorized Users and does not permit sublicensing except as set forth in a written addendum signed by Licensor.

2.2 License Model (select all that apply): .

3. PERMITTED USE AND RESTRICTIONS

3.1 Licensee shall use the Software in accordance with the Documentation and shall ensure that Authorized Users comply with this Agreement.

3.2 Except as expressly permitted, Licensee shall not: (a) copy, modify, create derivative works of, or distribute the Software; (b) decompile, reverse engineer or disassemble the Software except to the extent expressly permitted by applicable law; (c) remove or alter any proprietary notices; or (d) use the Software to provide services to third parties.

4. OWNERSHIP

All right, title and interest in and to the Software, Documentation, and all copies, improvements and derivative works thereof are and shall remain vested exclusively in Licensor. Licensee acquires only the rights expressly granted in this Agreement. No ownership rights are transferred by this Agreement.

5. FEES AND PAYMENT

5.1 In consideration for the license grant, Licensee shall pay Licensor the fees set forth below and in any applicable Order Form. Fees are due in U.S. dollars and payable within the period specified in the invoice.

6. MAINTENANCE AND SUPPORT

Licensor will provide maintenance and support to Licensee as described in the Support Schedule:

7. CONFIDENTIALITY

Each Party shall keep confidential and not disclose to any third party any Confidential Information of the other Party. "Confidential Information" shall include non-public business information, the Software, Documentation and any information designated as confidential. Confidential Information does not include information that is or becomes generally available to the public other than by breach of this Agreement, or that was rightfully in the receiving Party's possession prior to disclosure.

8. DATA SECURITY AND PRIVACY

8.1 Licensor shall implement and maintain industry-standard administrative, physical and technical safeguards designed to protect Licensee Data from unauthorized access, use or disclosure. "Licensee Data" means data uploaded to or processed by the Software by or on behalf of Licensee.

8.2 Each Party shall comply with applicable data protection and privacy laws in connection with the processing of Licensee Data.

9. WARRANTIES; DISCLAIMER

9.1 Licensor warrants that, for a period of thirty (30) days following delivery, the Software will substantially conform to the Documentation. Licensee's exclusive remedy and Licensor's sole obligation for breach of this warranty shall be, at Licensor's option, to repair or replace the non-conforming portion of the Software or to terminate the license and refund a prorated portion of any prepaid fees.

9.2 EXCEPT FOR THE LIMITED WARRANTY IN SECTION 9.1, THE SOFTWARE IS PROVIDED "AS IS" AND LICENSOR DISCLAIMS ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE AND NON-INFRINGEMENT.

10. LIMITATION OF LIABILITY

10.1 IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR CONSEQUENTIAL, INCIDENTAL, INDIRECT, SPECIAL OR PUNITIVE DAMAGES, LOST PROFITS OR LOSS OF BUSINESS, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

10.2 EXCEPT FOR LIABILITY ARISING FROM A PARTY'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OR A BREACH OF CONFIDENTIALITY OR INDEMNIFICATION OBLIGATIONS, EACH PARTY'S AGGREGATE LIABILITY UNDER THIS AGREEMENT SHALL NOT EXCEED Liability Cap: OR THE TOTAL AMOUNTS PAID BY LICENSEE TO LICENSOR IN THE TWELVE (12) MONTHS PRECEDING THE CLAIM, WHICHEVER IS GREATER.

11. INDEMNIFICATION

11.1 Licensor shall defend, indemnify and hold Licensee harmless from and against any third-party claim that the Software, as furnished by Licensor and used in accordance with this Agreement, infringes a third party's patent, copyright or trademark, provided Licensor is given prompt notice and sole control of the defense and settlement and Licensee cooperates reasonably.

11.2 Licensee shall defend, indemnify and hold Licensor harmless from and against any third-party claim arising from Licensee's breach of this Agreement, misuse of the Software, or violation of applicable law.

12. TERM AND TERMINATION

12.1 Term. This Agreement commences on the Effective Date and continues for an initial period of Term (months): unless earlier terminated in accordance with this Agreement. The Term shall renew automatically for successive periods unless either Party provides written notice of non-renewal at least thirty (30) days prior to expiration.

12.2 Termination for Cause. Either Party may terminate this Agreement immediately upon written notice if the other Party materially breaches this Agreement and fails to cure such breach within thirty (30) days after receipt of written notice specifying the breach.

12.3 Effect of Termination. Upon termination, Licensee shall cease use of the Software, return or destroy Licensor's Confidential Information and pay any outstanding fees through the effective date of termination. Sections relating to Ownership, Confidentiality, Indemnification, Limitation of Liability, Governing Law and any accrued payment obligations shall survive termination.

13. NOTICES

All notices required or permitted under this Agreement shall be in writing and delivered to the addresses set forth below or to such other address as either Party may designate by notice in accordance with this Section. Delivery by certified mail, overnight courier or personal delivery shall be effective upon receipt.

14. AMENDMENTS; WAIVER

No modification, amendment or waiver of any provision of this Agreement shall be effective unless in a writing signed by authorized representatives of both Parties. The failure of either Party to enforce any right shall not constitute a waiver of that right.

15. GOVERNING LAW

This Agreement shall be governed by and construed in accordance with the laws of State: without regard to conflict of law principles. The Parties submit to the exclusive jurisdiction of the courts located in that State for any dispute arising out of or relating to this Agreement.

16. ENTIRE AGREEMENT; SEVERABILITY

This Agreement, together with all Order Forms and schedules executed hereunder, constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings and communications. If any provision of this Agreement is held invalid or unenforceable, the remaining provisions shall remain in full force and effect.

17. MISCELLANEOUS

17.1 Independent Contractors. The Parties are independent contractors and nothing in this Agreement creates a partnership, joint venture, agency or employment relationship.

17.2 Counterparts and Electronic Signatures. This Agreement may be executed in counterparts, each of which when executed shall be deemed an original, and electronic signatures shall be binding and have the same effect as original signatures.

Licensor - Printed Name:

By:

Date:

Licensee - Printed Name:

By:

Date:

Enter text✕

What a Software Use Agreement Covers

A Software Use Agreement is a contractual document that defines the rights and obligations between a software provider and a user or licensee. It typically covers license scope, permitted and prohibited uses, support and maintenance, data handling, confidentiality, fees, term and termination, and dispute resolution. Organizations use it to set expectations about software access, limit liability, and document handling of customer data and intellectual property when software is provided as a service or installed on-premises.

Why a Clear Agreement Matters

A precise Software Use Agreement reduces legal exposure, clarifies operational responsibilities, and preserves enforceability under ESIGN (15 U.S.C. ch. 96) and state UETA rules. It protects data, defines allowable uses, and allocates risk between parties while supporting auditability for compliance requirements such as HIPAA where applicable.

Why a Clear Agreement Matters

Who Typically Prepares and Signs This Agreement

Organizations and individuals from several functions prepare or execute software use contracts; understanding roles speeds review and execution.

  • Legal and contracts teams — Prepare terms, approve liability clauses, and negotiate amendments prior to execution.
  • IT and security teams — Review technical controls, data-flow diagrams, encryption and access requirements for compliance verification.
  • Procurement and finance — Approve commercial terms, payment schedules, and renewal or termination provisions for budget and vendor management.

Assigning clear preparer and signer roles reduces delays and ensures the correct legal and operational approvals are captured before deployment.

Essential Clauses to Include

A professional Software Use Agreement organizes commercial, technical, and legal obligations into discrete clauses so each party’s rights and duties are clear and enforceable.

License Grant

Describe license type, scope, user counts, and permitted installations to avoid ambiguity about authorized use and to limit unlicensed deployments.

Restrictions

List prohibited acts such as reverse engineering, resale, or unauthorized redistribution and include remedies for breach to protect IP and business models.

Data Handling

State how customer data is collected, stored, processed, retained, and deleted; include security measures and breach notification timelines.

Support & Updates

Define service levels, update or patch responsibilities, and whether maintenance windows will affect availability or incur credits.

Term & Termination

Specify initial term, renewal mechanics, cure periods, and post-termination access to exported data or transition services.

Liability & Indemnity

Limit direct damages, exclude consequential damages where allowed, and set indemnity scope for IP infringement and third-party claims.

Step-by-Step: From Draft to Final Signature

A structured sequence reduces rework: draft, technical review, legal negotiation, approval, signing, and distribution. Each step has clear owners.

  • 01
    Drafting: Populate core fields and draft exhibit schedules before technical review.
  • 02
    Technical Review: IT validates data handling, access control, and integration points.
  • 03
    Legal Review: Legal negotiates liability, IP, and termination clauses.
  • 04
    Execution: Collect signatures, record audit trail, and distribute executed copies to stakeholders.

How to Configure an Online Signing Workflow

Configure fields, authentication, and notifications to match the agreement’s signer order and applicable security requirements.

Field Configuration
Authentication Email link, SMS code, or advanced KBA depending on risk profile
Signature Field Set required, optional, or sign order as appropriate per party
Conditional Fields Show or hide clauses based on selections such as optional modules
Notifications Enable reminders and completion emails to all parties

Typical eSigning Flow for a Software Agreement

An online eSigning flow automates routing, captures an audit trail, and stores the executed record for compliance and retrieval.

  • Upload: Sender uploads the final PDF or DOCX version.
  • Place Fields: Add signature, date, and checkbox fields where required.
  • Invite Signers: Send by email or create a secure signing link.
  • Capture Audit Trail: System logs timestamps, IPs, and authentication events.

Platform and Integration Considerations

Choose a platform that supports required authentication, audit trails, and the integrations your business depends on.

  • Integrations: Salesforce, NetSuite, Microsoft 365 integration availability
  • File Types: Support for PDF, DOCX, and Excel formats
  • Authentication: Options for SMS, email, KBA, and SSO

Security and Compliance Essentials

Encryption: TLS 1.2/1.3 in transit; AES-256 at rest
Certifications: SOC 2 Type II and ISO 27001
HIPAA: BAA required for PHI processing
21 CFR Part 11: Compliant for FDA-regulated records
ESIGN / UETA: Legal frameworks for e-signature validity
Accessibility: WCAG 2.0 Level AA support

Common Preparation Mistakes to Avoid

  • Using undefined party names or nicknames creates enforceability disputes and delays signature acceptance.
  • Leaving license scope vague often results in billing disputes over user counts and unauthorized installations.
  • Failing to attach exhibits or SOWs can render pricing, deliverables, or support obligations unclear during enforcement.
  • Neglecting to set signer order causes parallel edits and increases the chance of inconsistent executed copies.

Consequences of an Incorrect Agreement

Contract Voidability: Court could void ambiguous or unauthorized agreements
Data Breach Fines: Regulatory penalties when data controls are inadequate
Tax Exposure: Incorrect billing classification may trigger audits
I-9/Employment: Misclassifying contractors can produce penalties
Reputational Risk: Customer trust erosion after enforcement disputes
Litigation Costs: Significant legal fees to resolve disputes

Critical Dates and Notice Periods

Software Use Agreements commonly include effective dates, renewal notice periods, and cure timelines—track these to avoid automatic renewals or missed termination windows.

Effective Date:

Date when obligations begin; often MM/DD/YYYY

Renewal Notice:

Commonly 30–90 days before auto-renewal

Cure Period:

Typically 10–30 days to remedy material breach

Termination Notice:

Written notice period to end the agreement

Data Export Window:

30–90 days for customer to retrieve data after termination

Key Milestones from Negotiation to Live Use

Track milestone stages from drafting through post-execution activities so owners know when their actions are required.

01

Draft Complete

Initial terms and exhibits finalized for review.

02

Reviews Concluded

Technical and legal reviews completed and redlines resolved.

03

Agreement Signed

All authorized signatories execute the agreement.

04

Onboarding Live

Software access provisioned and support initiated.

eSignature Pricing & Feature Comparison

Core vendor differences impact cost and compliance. The table below summarizes starting price and selected capabilities; choose the model that matches your volume and regulatory needs.

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 No No No No
Bulk Send Yes Yes Yes Yes No
Audit Trail Yes Yes Yes Yes Yes
HIPAA Compliant Yes Yes Yes No No
Envelope Cap No envelope cap 100 envelopes/user/year Varies by plan Varies by plan Varies by plan

Real-World Examples of Usage

Organizations use eSignature platforms to streamline execution and maintain audit-ready records for compliance and operational continuity.

Optica Ventures

The interface is simple and easy-to-use for our team; more importantly, it is just as easy for our customers.

  • Increased customer turnaround time by consolidating signatures across deals.
  • The team reduced execution time and improved client satisfaction while keeping complete audit logs for each agreement.

Xerox

airSlate SignNow provides us with the flexibility needed to get the right signatures on the right documents, in the right formats, based on our integration with NetSuite.

  • Integrated signing automated contract lifecycle tasks.
  • System integration reduced manual entry and ensured signed agreements populated enterprise systems accurately.

Practical Tips for Accurate and Efficient Completion

Apply standardization and automation to reduce review cycles, ensure compliance, and speed signings while maintaining legal sufficiency.

Use a Standard Template
Maintain a vetted template to reduce negotiation on boilerplate and limit attorney review to variable commercial terms.
Designate Approvers
Set clear authority levels for signers to prevent post-signature disputes over signature authority.
Enable Strong Auth
Match authentication level to transaction risk; use SMS or KBA for higher-risk agreements.
Keep Ledger Records
Store executed PDFs plus an audit trail showing timestamps, IPs, and authentication events for evidentiary support.

Frequently Asked Questions

Answers to common legal and operational questions about signing, enforceability, and recordkeeping for Software Use Agreements.


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