Understanding Perpetual License Agreement

Friday, October 6th 2023. | Agreement Templates
Perpetual License Agreement For Office 365 US Legal Forms
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What is a Perpetual License Agreement?

A perpetual license agreement is a legal contract between a software vendor and a customer that grants the customer the right to use a specific software product indefinitely. Unlike a subscription-based model, where the customer pays a recurring fee to use the software, a perpetual license provides the customer with a one-time payment that allows them to use the software for as long as they want.

How Does a Perpetual License Agreement Work?

When a customer purchases a perpetual license, they are essentially buying the rights to use the software for an unlimited period of time. The license agreement typically outlines the terms and conditions of use, including any restrictions or limitations imposed by the software vendor.

The customer is usually granted a copy of the software, along with any necessary documentation or support materials. They are then free to install and use the software on their own devices, as long as they comply with the terms of the agreement.

Benefits of a Perpetual License Agreement

There are several benefits to choosing a perpetual license agreement:

  1. Cost savings: With a perpetual license, customers only need to make a one-time payment, which can be more cost-effective in the long run compared to subscription-based models.
  2. Flexibility: Customers have the freedom to use the software for as long as they want, without worrying about renewing subscriptions or facing additional fees.
  3. Control: Perpetual licenses give customers greater control over their software, as they are not dependent on the vendor’s continued support or availability.

Sample Perpetual License Agreements

Here are five examples of perpetual license agreements:

1. Software Company XYZ Perpetual License Agreement

This agreement grants the customer the perpetual right to use Software Company XYZ’s flagship product, including all future updates and enhancements. The license is non-transferable and subject to certain usage restrictions.

2. ABC Corporation Perpetual License Agreement

ABC Corporation offers a perpetual license for their accounting software, allowing customers to use the software indefinitely. The license includes free technical support for the first year and can be renewed annually.

3. XYZ Software Development Kit Perpetual License Agreement

This agreement provides developers with a perpetual license to use XYZ Software’s development kit to create and distribute their own software applications. The license includes access to documentation and technical support.

4. Company ABC Enterprise License Agreement

Company ABC offers an enterprise-level perpetual license agreement for their project management software. The license allows unlimited installations within the organization and includes priority support and training.

5. Software Vendor XYZ OEM License Agreement

This agreement allows Original Equipment Manufacturers (OEMs) to embed Software Vendor XYZ’s software into their own products. The perpetual license grants the OEM the right to distribute the software with their products indefinitely.

Frequently Asked Questions (FAQ) about Perpetual License Agreement

  1. Q: Can I transfer my perpetual license to another user?
    A: It depends on the terms of the license agreement. Some agreements allow for license transfers, while others may restrict it.
  2. Q: Do perpetual licenses include software updates?
    A: It varies from agreement to agreement. Some perpetual licenses include free updates for a certain period, while others may require an additional fee for updates.
  3. Q: Can I use a perpetual license on multiple devices?
    A: The terms of the license agreement will specify whether the license allows for multiple installations or restricts it to a specific number of devices.
  4. Q: What happens if the software vendor goes out of business?
    A: In the event of the software vendor’s closure, the customer may still be able to use the software under the terms of the perpetual license. However, support and updates may no longer be available.
  5. Q: Can I sell my perpetual license?
    A: Some license agreements allow for the resale of perpetual licenses, while others prohibit it. It is important to review the terms of the agreement before attempting to sell a license.


Perpetual license agreements offer customers the freedom and flexibility to use software indefinitely, without the need for recurring payments. They provide cost savings, control, and the assurance of being able to use the software for as long as desired. It is important for customers to carefully review the terms and conditions of the agreement to ensure compliance and understand any limitations or restrictions imposed by the software vendor.


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