How to Read a License Agreement

Licenses are often long, complicated, and difficult to read. Let's identify a few key terms to be on the lookout for when reading a license agreement.

And once again, those important terms to remember:

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So you install iTunes or you purchase a WordPress theme or whatever it is, 0:00 and you find yourself in front of a license that you're supposed to agree to. 0:04 Do you ever actually read those or do you just click "Agree"? 0:08

Or maybe you've personally asked a photographer for a license to use one of their photos in you app, 0:12

and they send you a license agreement, but what does it all mean? 0:16

If you ever, ever have any specific questions about a license agreement that you are unsure about, 0:20

definitely consult a lawyer. 0:26

But even though every license is different, we can at least learn some common terminology used in them and what they mean. 0:29

So let's decode a few words. 0:36 First, know that there is no standard way to write a license of any kind. 0:38 Every company has different lawyers that write these sort of licenses for them, 0:43 and every lawyer writes them a little bit differently based on a number of different factors. 0:48 So don't expect to see any sort of EULA written the same way twice. 0:52 Some are going to be unnecessarily complicated and incomprehensible. 0:57

But others, like some of Microsoft's and Google's for example, are written to be pretty human friendly. 1:01

Most licenses will explain themselves a little bit up front. 1:08 They'll go when we say this, we mean this, this, and this, and that's helpful. 1:12 Google even goes out of their way to explain the word "Google". 1:18

Saying ""Google" means Google, Inc., whose principal place of business is at 1600 Amphitheatre parkway" et cetera, et cetera. 1:21

But often a license will feel like it's expecting you to be a lawyer no matter how well it's trying to explain itself. 1:29

So be on the lookout for these important word. 1:36 Product. This is whatever you're actually licensing. 1:39 Sometimes it's also written as the Service, 1:43 and sometimes Product and Service are used interchangeably. 1:46 Apple, for example, calls iTunes a Service and anything purchased via iTunes a Product. 1:50 Google, on the other hand, bundles all of its products, services, and websites, 1:57 and calls them the "Services" in the license agreement for Chrome. 2:02

No matter what you're working with, the Product or the Service is generally what you're actually using, the thing you're licensing. 2:06

Terms. Terms are what you agree to. 2:14 Terms of service, Terms and conditions, whatever it is. 2:18

These are the rules that you are agreeing to abide by as long as you're using the Product or the Service. 2:21

Term. Now Terms are not to be confused with the word Term, which is not plural. 2:28

If a license has an expiration date, that length of time that the license is effective is called a Term. 2:36

A Term might be included in the Terms so be on the lookout for that missing "s". 2:42

If you're licensing a song for your App or a stock photo for your website, these licenses often don't last forever. 2:49

If you can only use something for a year or two until you need to renew the license, then that's pretty important to know about. 2:56

Territory. Territory is pretty self-explanatory. 3:02 It's the physical location the license is good in. 3:07 On the web lots of licenses are world-wide, they apply everywhere. 3:10 But there are plenty of licenses that only are effective in certain countries. 3:15

It's the reason some songs are available on Spotify in the United Kingdom but not in the United States 3:19

or why some software is released only in the United States but not in other countries. 3:25 Now on the other hand I've seen licenses that cover "the known universe", 3:30 so maybe the Territory won't end up being much of an issue for you. 3:34

But making sure that what you are licensing is okay to use not only in your country but in others is a key bit of info. 3:38

So Product, Terms, Term, and Territory. 3:45 What, how, for how long, and where, 3:51 often the most important stuff to look for in any license agreement. 3:55

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