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As part of my job, I help to negotiate contracts when my company is purchasing software (or hardware with embedded software). For these significant business relationships, we typically negotiate a Master Agreement, which govern all aspects of the relationship, including Terms of Purchase, Product Support, and/or Service Contract terms and more.

Despite spending months working through dozens of pages of terms; every software supplier also insists upon some version of this one-line statement, "If any of our current or future software, used by Customer, contain a EULA, it is hereby incorporated by reference."

In my experience, any time I've objected to the Supplier leaving a perpetual backdoor to arbitrarily insert or modify terms, I've been met with great shock and resistance. The attitude seems to be that the EULA is a foundational legal right that software makers have and it is beyond negotiation.

I don't have formal legal training or a deep background in contracts, so I'm seeking useful context or knowledge. Is there a historical or legal reason for software vendors to think that embedded license agreements should be entitled to ride along unimpeded and unseen on a parallel path through the contractual relationship?

Are there other content areas in, deals among relative equals, where it's common for one party to expect open-ended, unilateral power to remake terms; which might inform how I approach these negotiations?

UPDATE: Please note that I'm only asking about situations where the seller is the developer, we will be one of their largest customers, and they typically have hundreds of total customers.

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Is there a historical or legal reason for software vendors to think that embedded license agreements should be entitled to ride along unimpeded and unseen on a parallel path through the contractual relationship?

Historical: yes - that's how they've always done it. Legal: no - a licence is nothing more or less than a contract (in common law systems - they have a separate life in civil law systems): a contract normally requires all parties to agree to changes but they can allow unilateral change.

Are there other content areas in, deals among relative equals, where it's common for one party to expect open-ended, unilateral power to remake terms; which might inform how I approach these negotiations?

Heaps. Building and construction contracts are usually heavily slanted towards the principal. Similarly, finance contracts. Telecommunications. Health and medical services. Shipping and logistics. Mining. Basically anywhere where the industry players are typically large businesses rather than small businesses and where the relationships are long-term rather than transactional.

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  • If the EULA were changed to include something Customer objected to (by using this program you give us a perpetual non-revocable license to all of the data you enter into it) what recourse does Customer have? Would all of the possible things Customer will not agree to that could be included in a EULA need to be laid out in advance?
    – ColleenV
    Sep 9 at 17:25
  • The contract specifically provides for essentially an open ended unilateral amendment capability by one side. How is that not legal. It is not hidden and is negotiated. The OP ask it to be removed and supplier declined and OP signs a way. One sided but not illegal Sep 9 at 20:41
  • @ColleenV What a good question. Why don't you ask it?
    – Dale M
    Sep 10 at 3:47
  • Well, no-one else seemed to think it was a good question. Maybe I messed up the title? law.stackexchange.com/q/72655/226
    – ColleenV
    Sep 14 at 17:42
  • @ColleenV have patience
    – Dale M
    Sep 14 at 21:02
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Answer to an incorrect reading of the question as initially posted.

I assume they are passing through the manufacturers standard license to you. If you get software from a distributor or dealer who gets it from the manufacturer they don't typically get to re-negotiate a license with the manufacturer. And to do that on a customer-by customer basis would be even more impractical.

If you were a huge and direct customer (like the DOD or a state school system or even Starbucks) you could try to negotiate with a Microsoft, Oracle etc. Doing so through a third party seems very, very unlikely to work.

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  • Thank you, but I'm only asking about situations where the seller is the developer and they need our business as much as we need their software. I'll update the question. Sep 9 at 12:41

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