What types of contracts does AMLEGALS handle?

AMLEGALS provides comprehensive contract advisory across 43+ contract types including Technology contracts (SaaS, AI/ML, Cloud Services), Data Privacy agreements (DPAs, DPDPA compliance), Commercial contracts (MSAs, Supply, Distribution), IP & Licensing, Employment agreements, and International Trade contracts.

What is the TCL Framework for contracts?

The TCL Framework is AMLEGALS proprietary approach that examines every contract through three lenses: Technical (understanding the operational realities), Commercial (aligning business objectives), and Legal (ensuring compliance and risk mitigation). This integrated approach ensures contracts that work in practice, not just on paper.

Does AMLEGALS handle DPDPA-compliant contracts?

Yes, AMLEGALS specializes in DPDPA-compliant contracts including Data Processing Agreements, Cross-Border Transfer Mechanisms, Data Sharing Agreements, and Consent Management frameworks. Our Vibe Data Privacy™ framework ensures comprehensive compliance with the Digital Personal Data Protection Act, 2023.

Can AMLEGALS help with AI and technology contracts?

Yes, AMLEGALS has dedicated expertise in AI/ML Contracts, AI Governance agreements, AI Training Data Licensing, SaaS Agreements, Cloud Services agreements, and System Integration contracts. We address emerging issues like algorithmic accountability, model ownership, and AI liability allocation.

What is the difference between perpetual and subscription licensing?

Perpetual licenses grant indefinite use rights for an upfront fee, with optional ongoing maintenance for updates and support. Subscription licenses grant time-limited rights with ongoing payments, typically including updates and support. Subscription provides lower initial cost and included updates; perpetual provides certainty and potential long-term savings if the software is used for many years.

How does virtualisation affect software licensing?

Virtualisation complicates licensing because: traditional per-server metrics may count each virtual machine, virtualisation enables workload mobility across physical hardware, and licensing may need to cover the entire virtualisation cluster. Modern agreements should specifically address virtual environments, defining how licenses apply to VMs, containers, and dynamic workload placement.

What should enterprise license agreements include?

Enterprise agreements should include: clear metric definitions applicable to your deployment, flexibility for growth and contraction, favourable pricing based on volume commitment, true-up and true-down mechanisms, compliance verification processes that are practical, maintenance inclusions and pricing, and reasonable audit provisions with notice and scope limitations.

What are software audit best practices?

Audit preparedness requires: maintaining accurate records of installations and users, regular internal compliance assessments, documented license entitlements, clear processes for software deployment approval, and understanding of contractual audit provisions. When audited, respond professionally, verify auditor credentials, understand scope limitations, and involve counsel for significant matters.

Software Licensing Agreements | EULA & Enterprise License Contracts

Overview

Software licensing has evolved through multiple paradigms, from shrink-wrap perpetual licenses to click-through SaaS subscriptions. Despite this evolution, on-premises software licensing remains relevant for applications where performance, security, or regulatory requirements preclude cloud deployment. The software license agreement governs this relationship - defining what the customer may do with the software and what the vendor must provide in return.

The fundamental tension in software licensing is between the vendor's intellectual property protection and the customer's operational flexibility. The vendor wants to maintain control over copying, modification, and distribution. The customer wants to deploy the software effectively across their operations, potentially including disaster recovery sites, development environments, and integration scenarios. The license must balance these interests.

Enterprise software licensing adds complexity through volume licensing structures, site licenses, and complex entitlement definitions. What counts as a user? How are virtual environments counted? Can development and test environments be used freely? These questions are not merely technical - they determine compliance obligations and cost implications that can be substantial for large deployments.

Key Considerations

1

License Grant

What the customer may do with the software - installation, copying, modification, and use rights clearly specified.

2

Deployment Model

Where and how the software may be deployed - servers, virtual environments, disaster recovery, development instances.

3

User Definitions

How users are counted for licensing purposes - named users, concurrent users, devices, or other metrics.

4

Maintenance and Support

What updates, patches, and support services are included, optional, or separately priced.

5

Term and Renewal

License duration, renewal terms, and what happens to data and functionality at termination.

6

Audit Rights

Vendor rights to verify compliance and customer obligations for documentation and access.

Applying the TCL Framework

Technical

Understanding deployment architecture and infrastructure
Assessing virtualization and containerization implications
Evaluating integration and customization requirements
Reviewing disaster recovery and high-availability needs
Understanding development and testing environment needs

Commercial

Mapping license metrics to actual usage patterns
Negotiating volume discounts and enterprise arrangements
Structuring maintenance to match budget cycles
Addressing growth and contraction flexibility
Managing multi-year commitments against market evolution

Legal

Defining license scope with precision
Structuring compliance mechanisms that work operationally
Addressing intellectual property in customizations
Managing liability for software defects
Creating exit provisions that protect customer interests

“

"Software license compliance is not a legal exercise performed at contract signing. It is an operational reality that plays out in infrastructure decisions every day. The license must be drafted to work in that operational context, not just on paper."

AM

Anandaday Misshra

Founder & Managing Partner

Common Pitfalls

Metric Confusion

License metrics that do not align with actual deployment patterns, creating compliance exposure or cost inefficiency.

Virtualisation Gaps

Licenses that predate virtualisation without provisions addressing virtual environments, creating ambiguity.

Audit Exposure

Inadequate internal compliance processes that create substantial exposure when vendors audit.

Maintenance Lock-in

Maintenance terms that effectively require perpetual subscription to maintain functionality.

Exit Difficulty

No provisions for data export or format compatibility at contract end, creating practical lock-in.

Software Licensing Framework

Software licensing in India is governed by the Copyright Act, 1957 and the Information Technology Act, 2000. Software is protected as a literary work under copyright law. The license agreement creates contractual permissions for use that would otherwise infringe copyright. Data protection obligations under DPDPA apply to personal data processed by the software. Export control regulations may affect cross-border software deployment. Consumer protection regulations apply to end-user software sold to consumers.

Practical Guidance

Conduct license inventory and usage analysis before negotiating enterprise agreements.
Map deployment architecture to license metrics to identify compliance gaps.
Negotiate metrics that align with your infrastructure approach (virtualisation, containers).
Build internal processes for tracking license usage and maintaining compliance.
Ensure maintenance agreements cover actual operational needs.
Plan for exit - verify data export capabilities and format compatibility.

Frequently Asked Questions

Related Contract Types

SaaS Agreements

Technology & Digital

Subscription-based software licensing with service levels, data handling, and exit provisions

System Integration Agreements