You almost never own software; you lease the right to use it. You may have perpetual (permanent) rights to use it, but that’s not the same as ownership. Your rights are limited to uses spelled out in the contract, and it’s these uses where most complexities arise in negotiations and related financial discussions.
Source code is the set of programmatic statements created in a structured (programming) language by developers, permitting software to execute intended functions. Object code is the output of a compiler after it processes source code. The compiler transforms the source code into a program the computer can execute.
It seems obvious that a contract for software, or any product or service, should clearly identify what is covered under the agreement. However, in many contracts, the description is vague or too general for the buyer to be certain of the components purchased. It’s in your best interest to ensure that the contract clearly details what is covered, especially if the software has many components or options.
Software license agreements, with few exceptions, include terms and conditions in 10 broad areas. This guide presents the subject in plain English in the form of questions to ask and points to consider during the negotiation or contract evaluation process. Our approach aligns IT procurement’s objectives with the business user’s needs.
Here are the 10 key areas: