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Using Appropriate Agreement for Software Helps Reduce Future Disputes

Agreements used for online software and websites may have overlapping purposes. A business should understand the parameters of each type of agreement and use the appropriate document. An End-User License Agreement (EULA) describes how the user of the software may use the product, and what constraints and promises are imposed on the relationship between the software provider and the user. A EULA is what gives the customer the right to use the product. Terms of Service (ToS) presume the user already has the right to use the system and describes how the user can proceed, including online accountability, warranties and disclaimers, and payment terms. A Service Level Agreement (SLA) is more like a maintenance agreement for the software provided online. An SLA describes how the service or app should perform, how reliable it should be and how the provider will fix or compensate the user for any problem. A Cloud Service Agreement (CSA) is a broader form of an SLA and includes the descriptions of how well the system will operate, like an SLA, while also including an Acceptable Use Policy of how the online Software as a Service (SaaS) can be used and a customer agreement, which describes the pricing and other business terms. Using the wrong document that focuses on the wrong elements of a relationship will only lead to confusion and more troublesome disputes down the road.

Ned T. Himmelrich
410-576-4171 • nhimmelrich@gfrlaw.com