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If I have a software license and somewhere in it states something to the effect of "Only white people can use this software", is it legally binding in the United States?

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    "Legally binding" upon whom? Customers? Distributors? Are you asking whether the contract would itself be void or unenforceable because of an illegal premise, assuming racism in a private contract were illegal?
    – Upnorth
    Oct 8 '17 at 18:30
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A software license is a form of giving permission to a person to make a copy of copyrighted material. In this case, the license would be a contract, not a bare license (an open source license may be a bare license, assuming it grants all rights without assigning those rights). The problem is that copyright infringement is governed by federal law, and breach of contract is a state matter. The author gets two cracks at the matter, as copyright infringement, and as breach.

There are federal laws against racial discrimination, passed under PL. 88-352. The prohibition of racial discrimination is an enumerated prohibition: you can't, when it comes to voter registration, "public accommodations", schools, labor, and things about the government, but this doesn't extend to absolutely everything. The concept of "public accommodation" comes closest to being an applicable basis for saying "no, it would be illegal", but such an accommodation has to be provided in a physical establishment. The interpretation of "public accommodation" is discussed in this article, which predates internet sales by decades. One might then think that Title II is irrelevant. If the software is sold in a store, that location is plainly a public accommodation, and Title II would render that clause illegal. So to continue the discussion, we have to assume that this was an internet sale.

National Federation of the Blind v. Scribd Inc., 97 F. Supp. 3d 565 is a case of interest, involving discrimination for an internet-only business. Citing a wealth of prior cases that don't clearly decide the matter, that court found that the text of the law is insufficient, and other means must be called on to make the determination:

While no circuit court has directly addressed whether a website with no physical retail outlet or building open to the public can be a place of public accommodation under Title III, clearly there is more than one reasonable interpretation of the language at issue here. Therefore, the Court may go beyond the text and context of the text to understand the statute's meaning.

Canons of construction don't yield clarity either. The court found that legislative intent resolves the matter. The exact reasons are way too long and involved to summarize, but it comes down to distinguishing legislative intent in the case of the Civil Rights Act, versus the later ADA. Citing congressional committee reports, the court found that

It was "critical" to define places of public accommodation more broadly than the Civil Rights Act of 1964 because "discrimination against people with disabilities is not limited to specific categories of public accommodations."

"Public accommodation" has two different definitions, one (Civil Rights Act) pertaining to discrimination based on race, color, religion, or national origin, and the other (ADA) based on disability.

There does not seem to be case law establishing that an internet-only sale is subject to the anti-discrimination provisions of the Civil Rights Act, and some evidence that it is not. The case of Noah v AOL Time Warner, involving alleged religious discrimination in an online chat site, was dismissed for many reasons, one being:

Even assuming, arguendo, that plaintiff's Title II claim is not barred by § 230, it must nonetheless be dismissed for failure to state a claim because AOL's chat rooms and other online services do not constitute a "place of public accommodation" under Title II.

...

Yet, as the relevant case law and an examination the statute's exhaustive definition make clear, "places of public accommodation" are limited to actual, physical places and structures, and thus cannot include chat rooms, which are not actual physical facilities but instead are virtual forums for communication provided by AOL to its members.

A website where one could download software is even less of a public accommodation. So since there is no clear federal bar to racial discrimination in a software license, it is plausible that an infringement case could survive.

It is not clear how the case would fare in state courts, since states often have even stricter anti-discrimination laws which could render that condition in the contract unenforceable. The clause might be deemed illegal on general "public policy" grounds. If the contract (license) has a severability clause, the overall license should survive, just omitting the racial restriction. Without such a clause... if the contract is held to be void, the customer does not have permission to copy (which comes from the contract), and thus has infringed copyright law.

Insofar as there is no serious question that the courts would find such a license to be repugnant, it is hard to imagine the courts saying "but, by the letter of the law, this is allowed". The most likely path for reaching that end is for a higher court to disregard a part of Noah and discover that internet sales fall within the category of public accommodation. This issue has not been clearly decided to the best of my knowledge, and it's not at all easy to compute the federal outcome based on statutory and case law.

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    While the laws and precedents forbidding racially restrictive real estate covenants is not directly applicable, it would be very powerful as a precedent and would probably be cited in a case holding that such a term of a contract was unenforceable and void due to public policy considerations. While usually resort to the courts to enforce a legal right is not considered "state action" for 14th Amendment purposes, doing so to enforce racially discriminatory legal arrangements is usually considered "state action" in an anomalous aspect of civil rights jurisprudence.
    – ohwilleke
    Oct 9 '17 at 21:10

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