I asked GPT 3.5 to create a license agreement using the following prompt:
Draft an End user object code software license agreement between LICENSOR and LICENSEE using the following terms.
• Formal delivery, acceptance testing, final acceptance within 30 days assumed unless notice within that period
• A site license limited to offices in Cambridge, MA
• The licensor will provide updates annually
• License should be limited to internal use; resale/redistribution prohibited
• The software should be treated as confidential
• The terms of this license agreement must be confidential
• The agreement is subject to Massachusetts law.
• Annual license fee $100,000, increased annually by 5%.
• Price exclusive of applicable taxes
• Term: five years
• Any dispute subject to arbitration, venue in Massachusetts, three person panel with SAAS subject matter expertise
• Agreement is non-assignable
• Agreement is terminable for non-payment; licensee may cure within 30 days notice of default
• Limited warranty in accordance with specifications. Exclusive remedy is damages limited to monies paid by Licensee
• No virus warranty
• Non-infringement warranty
• No claims pending warranty
• No implied warranty or warranty for specific purpose
• Indemnification against IP claims – yes
• Source code escrow accessible in event of material breach by Licensor
• Licensee may not reverse engineer
• Notices in writing – certified mail
• Any amendment must be in writing
Here is the agreement the AI created. What do you think?
SOFTWARE LICENSE AGREEMENT
This Software License Agreement (“Agreement”) is made and entered into as of the date of acceptance by Licensee, by and between Licensor, and Licensee.
(a) “Software” means the object code form of the software products specified in the applicable order form or purchase order, and any related documentation, materials, updates, and upgrades provided by Licensor to Licensee under this Agreement.
(b) “Order Form” means the written or electronic document issued by Licensor and executed by both Licensor and Licensee, or submitted electronically by Licensee and accepted by Licensor, specifying the Software licensed by Licensee and any related services.
(c) “Documentation” means the user manuals, installation guides, and other technical documentation provided by Licensor to Licensee.
(d) “Licensee” means the individual or entity that accepts the terms and conditions of this Agreement.
(e) “Licensor” means the individual or entity that licenses the Software to Licensee under this Agreement.
(f) “Support Services” means the support and maintenance services described in Section 5 of this Agreement.
(g) “Confidential Information” means any information disclosed by either party to the other party, either directly or indirectly, in writing, orally, or by inspection of tangible objects, which is designated as “Confidential,” “Proprietary,” or some similar designation, or which should reasonably be understood to be confidential given the nature of the information and the circumstances of disclosure.
2. GRANT OF LICENSE.
(a) Subject to the terms and conditions of this Agreement, Licensor hereby grants to Licensee a non-exclusive, non-transferable license to use the Software and Documentation, solely for Licensee’s internal business purposes, and only at Licensee’s offices in Cambridge, Massachusetts.
(b) Licensee shall not use the Software or Documentation for any purpose other than as expressly permitted by this Agreement.
(c) Licensee shall not modify, copy, reproduce, distribute, or create derivative works of the Software or Documentation.
(d) Licensee shall not remove or alter any proprietary notices or labels on the Software or Documentation.
(e) Licensee shall not disclose or distribute the Software or Documentation to any third party without the prior written consent of Licensor.
(a) Licensor shall deliver the Software and Documentation to Licensee within thirty (30) days after the date of execution of the Order Form.
(b) Licensee shall have a period of thirty (30) days following delivery to conduct acceptance testing of the Software and Documentation.
(c) Licensee shall notify Licensor in writing within thirty (30) days of delivery if Licensee determines that the Software or Documentation fails to meet the specifications set forth in the Order Form.
(d) If Licensee does not provide written notice of non-acceptance to Licensor within thirty (30) days after delivery, the Software and Documentation shall be deemed accepted by Licensee.
(a) Licensor shall provide updates to the Software and Documentation annually during the term of this Agreement, at no additional charge.
(b) Licensee shall be entitled to install and use such updates during the term of this Agreement.
(c) Licensee shall not use any updates to the Software or Documentation in any manner that violates the terms of this Agreement.
5. SUPPORT SERVICES.
(a) Licensor shall provide Support Services to Licensee during the term of this Agreement, at no additional charge.
(b) Support Services shall include:
(i) Telephone and email support for Licensee’s designated technical support personnel during Licensor’s normal business hours;
(ii) Bug fixes and updates to the Software as necessary to correct material errors or malfunctions that materially affect the Software’s operation in accordance with the Documentation;
(iii) Assistance with installation, configuration, and troubleshooting of the Software;
(iv) Access to online support resources, including user forums and knowledge bases; and
(v) Any other support services agreed to by the parties in writing.
(c) Licensor shall not be obligated to provide Support Services if:
(i) The Software or Documentation has been modified, altered, or tampered with by anyone other than Licensor;
(ii) The Software or Documentation has been used in a manner not authorized by this Agreement;
(iii) The failure of the Software to operate is due to causes outside of Licensor’s control, including but not limited to failure of Licensee’s hardware or software systems; or
(iv) Licensee has not paid any applicable fees when due.
(a) Licensee shall pay Licensor an annual license fee of $100,000, exclusive of any applicable taxes.
(b) The annual license fee shall be increased by five percent (5%) at the beginning of each subsequent year of the term of this Agreement.
(c) Licensee shall pay all fees within thirty (30) days of the date of the applicable invoice.
(d) Licensor reserves the right to suspend or terminate Licensee’s access to the Software and Support Services if Licensee fails to pay any fees when due.
7. TERM AND TERMINATION.
(a) This Agreement shall commence on the date of acceptance by Licensee and shall continue for a term of five (5) years.
(b) Either party may terminate this Agreement upon written notice if the other party materially breaches any provision of this Agreement and fails to cure such breach within thirty (30) days after receiving written notice of such breach.
(c) Licensor may terminate this Agreement immediately if Licensee fails to pay any fees when due.
(d) Upon termination of this Agreement, Licensee shall immediately cease all use of the Software and Documentation, and shall return or destroy all copies of the Software and Documentation in Licensee’s possession or control.
(e) The provisions of Sections 2(d), 2(e), 6, 7, 8, 9, 10, 11, 12, and 13 shall survive any termination or expiration of this Agreement.
8. WARRANTIES AND DISCLAIMERS.
(a) Licensor represents and warrants that it has the right to license the Software to Licensee, and that the Software does not infringe any third party’s intellectual property rights.
(b) Licensor warrants that the Software will materially conform to the specifications set forth in the Order Form and the Documentation.
(c) Licensee’s exclusive remedy for any breach of the warranties set forth in this Section 8 shall be for Licensor to use commercially reasonable efforts to correct or replace the non-conforming Software or Documentation, or if Licensor is unable to do so within a reasonable period of time, to refund the fees paid by Licensee for the non-conforming Software or Documentation.
(d) Licensor does not warrant that the Software or Documentation will be error-free or uninterrupted.
(e) Licensor makes no warranties, express or implied, regarding the Software or Documentation, including but not limited to any implied warranties of merchantability, fitness for a particular purpose, or non-infringement.
(f) Licensee acknowledges that it has not relied on any representations or warranties not expressly set forth in this Agreement.
(a) Licensor shall indemnify, defend, and hold harmless Licensee from and against any and all claims, damages, liabilities, costs, and expenses (including reasonable attorneys’ fees) arising out of or related to any third party claim that the Software infringes any third party’s intellectual property rights.
(b) Licensee shall promptly notify Licensor in writing of any claim covered by this Section 9, and Licensor shall have sole control over the defense and settlement of any such claim. Licensee shall provide Licensor with all necessary assistance, information, and authority to perform such defense or settlement.
(c) If any claim covered by this Section 9 arises or is likely to arise, Licensor may, at its sole option and expense:
(i) Obtain for Licensee the right to continue using the Software;
(ii) Modify the Software so that it becomes non-infringing;
(iii) Replace the Software with non-infringing software that is functionally equivalent;
(iv) Terminate this Agreement and refund the fees paid by Licensee for the infringing Software; or
(v) Defend Licensee against the claim.
(d) Licensor shall have no liability under this Section 9 to the extent that the claim is based on:
(i) Any modification of the Software or Documentation by anyone other than Licensor;
(ii) The combination of the Software with any product, service, or process not provided by Licensor, to the extent that such claim would not have arisen but for such combination; or
(iii) Licensee’s failure to use the Software or Documentation in accordance with this Agreement or the Documentation.
10. LIMITATION OF LIABILITY.
(a) In no event shall Licensor be liable to Licensee for any indirect, incidental, consequential, special, or punitive damages, including but not limited to lost profits, loss of business, or loss of data, arising out of or related to this Agreement, even if Licensor has been advised of the possibility of such damages.
(b) Licensor’s total liability to Licensee for all claims arising out of or related to this Agreement shall be limited to the fees paid by Licensee to Licensor under this Agreement during the twelve (12) month period preceding the claim.
(a) Licensee acknowledges that the Software and Documentation contain valuable trade secrets and confidential information of Licensor.
(b) Licensee shall use the same degree of care to protect the confidentiality of the Software and Documentation as it uses to protect its own confidential information, but in no event less than a reasonable degree of care.
(c) Licensee shall not disclose the Software or Documentation to any third party without the prior written consent of Licensor.
(d) The terms of this Agreement shall be deemed Confidential Information of both parties.
(e) This Section 11 shall survive any termination or expiration of this Agreement.
(a) Any dispute, claim, or controversy arising out of or related to this Agreement shall be resolved by binding arbitration in accordance with the rules of the American Arbitration Association.
(b) The arbitration shall take place in Massachusetts, and the arbitrators shall have experience in the software-as-a-service industry.
(c) The arbitration shall be conducted by a panel of three (3) arbitrators.
(d) The arbitration shall be conducted in the English language.
(e) The decision of the arbitrators shall be final and binding on the parties.
(f) This Section 12 shall not preclude either party from seeking injunctive relief in a court of competent jurisdiction.
13. GENERAL PROVISIONS.
(a) This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior or contemporaneous agreements, representations, warranties, and understandings, whether oral or written.
(b) This Agreement may not be amended except in writing signed by both parties.
(c) Licensee may not assign this Agreement or any rights or obligations hereunder, whether by operation of law or otherwise, without the prior written consent of Licensor.
(d) Licensor may assign this Agreement or any rights or obligations hereunder without the consent of Licensee.
(e) This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.
(f) If any provision of this Agreement is held to be invalid or unenforceable, such provision shall be deemed modified to the extent necessary to make it valid and enforceable, and the remaining provisions of this Agreement shall remain in full force and effect.
(g) No failure or delay by either party in exercising any right or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or remedy preclude any other or further exercise thereof or the exercise of any other right or remedy.
(h) This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts, without giving effect to its conflict of laws provisions.
(i) Any notices required or permitted to be given hereunder shall be in writing and shall be deemed to have been given and received (i) when delivered by hand, (ii) three (3) business days after being sent by registered or certified mail, return receipt requested, postage prepaid, or (iii) one (1) business day after being sent by nationally recognized overnight courier, to the parties at the addresses set forth below or to such other addresses as either party may specify in writing.
[Insert Licensor’s Name and Address]
Attention: [Insert Name and Title]
[Insert Licensee’s Name and Address]
Attention: [Insert Name and Title]
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.
[Insert Licensor’s Name]
Name: [Insert Name and Title]
Title: [Insert Title]
[Insert Licensee’s Name]
Name: [Insert Name and Title]
Title: [Insert Title]