Battle of the Forms: EULAs Versus Purchase Orders

I have negotiated dozens of licensing deals for clients who offer software, databases, and other intellectual property assets to their licensees.   After you spend substantial time and resources on protecting your rights and interests through a negotiated end user license agreement (often called a EULA), make sure you do not negate all those benefits by accepting an inconsistent purchase order.

Many purchase orders include up to a few pages of terms and conditions. While the other side may encourage you to view those few pages of language as irrelevant boilerplate, the language can become important.

 

The EULA and the Purchase Order often try to cancel each other out.   A EULA often includes a “Complete Agreement” section that says something such as:

The EULA sets forth  the complete agreement between the licensee and licensor and that the EULA cannot be amended without the written consent of both parties. 

 I have seen purchase orders that proclaim: 

Any terms or conditions in licensor’s invoices, billing statements, acknowledgement forms, or similar documents which are inconsistent with this purchase order, whether or not signed by licensee, shall be of no effect and the terms of this purchase order shall control.

 That language opens the door for your licensee to argue the terms in the purchase order void the terms in the EULA.  Perhaps it’s not a strong or winning argument – but who wants to take on the unnecessary risk of having to argue that point in a legal proceeding.

Ultimately, it often becomes too confusing as to whether the EULA or the purchase order terms apply.  That’s why I advise clients with standing EULAs to exercise caution with respect to acceptance of purchase orders submitted by licensees.