Get Started
10 min read

What is the difference between a EULA and a SaaS Agreement?

Featured Image

One of the more common questions we encounter as specialist Microsoft Partner lawyers is:  

What is the difference between a EULA (an end-user licence agreement) and a SaaS (software-as-a-service) agreement? 

For the most part, this confusion seems to be because both types of agreements relate to software being provided to end-users, but also by the general complexity of modern technology agreements. 

However, by stripping away the software element of the agreements, the analysis becomes a little easier and below we look at how best to define each agreement as well as examples of when to use them. 

What is a EULA?

A EULA, or end-user licence agreement, is exactly that – an agreement providing an end-user with a licence to use the software it has paid forsubject to specific agreed terms. 

The terms of a EULA will be one-way, only protecting the supplier and its proprietary software. End-users will need to agree to the terms of the EULA (usually by way of clicking accept/agree) before being able to download the software. The terms will often allow a software developer or publisher to restrict the use of the software, for example, by limiting the amount of copies that can be made or how many computers it can be installed on and prohibit reverse engineering and decompilation. 

To find out more about the reasons why you should be using a EULA, please read our previous blog: 4 Reasons Why You Need an End User License Agreement (EULA) ( 

What is a SaaS? 

At its most basic level, a SaaS agreement can be contrasted with a EULA as being a provision of services (rather than a licence to use something), allowing a supplier to deliver a cloud-based service package, often via a subscription model / pay-per-user basis 

The key difference between a EULA and a SaaS agreement is that the major components of the software will reside with the supplier, rather than on-site with the end-user, and is accessed onlinefor example, via a web browser instead of being downloaded locally.  

We all use SaaS hosted applications every daysuch as Gmail, Office365, Dropbox and Google Drive. In all of these examples, the end-user will not physically receive a copy of the software but will instead be provided with global accessibility (subject to having an internet connection) and benefit from the supplier hosting and maintaining the software.  

There are some significant user benefits to accessing software in the cloud rather than downloading a particular version. End-users are able to automatically receive the latest updates and patches and the supplier takes care of data management and security. Typically a service level agreement will also be negotiated alongside a SaaS agreement. 

Is one more appropriate than the other?

The answer to this question depends very much on the specific circumstances and it is important to understand the end-user’s requirements before proceeding to the contracting stage. 

A EULA will usually be used if the end-user wants to download piece of software as a physical product and use it on-premises. In this instance the EULA will protect the software developer or publisher’s IP rights and ensure that they are able to control the use of their software. 

A SaaS Agreement is appropriate when no software is being downloaded or copied, and the end-user is accessing a serviced software package from the service providers servers. This gives the end-user consent to access the cloud-based service, rather than a licence to use the software itself (as is the case with a EULA). 

Of course it may not be as black and white as this and sometimes you may need to use both a SaaS agreement and a EULA where, for example, end-users are able to download a mobile app version of any software. 

Special offer for Microsoft Partners

Until the end of March 2021, our employment lawyer, Megan O’Hara, is offering Microsoft Partners a free 90-minute consultation to discuss all your HR and employment dilemmas.

Email to book an appointment now!

Don’t let your contracts get the better of you. Let the Law 365 team help you grow your business with less risk.

What makes us different?

  • We’re the only law firm in the world who specialises solely in the legal needs of Microsoft Partners like you.
  • We offer our legal services as a monthly subscription – allowing you to easily budget for your legal costs for the year. No surprises.
  • We are your ‘in-house’ Microsoft legal team. We can speak your language and won’t bog you down in legal jargon.
  • We’ll work at your speed to help you achieve your goals. We won’t slow you down, especially when getting deals over the line.

We’d love to talk so call us on 01892 313 943, or drop us a note at

Also, make sure you follow us on LinkedIn to be kept up to date with useful legal information for Microsoft Partners.  Our Microsoft technology lawyers are here to help

Law 365 – The Award-Winning Microsoft Partner Law Firm.

Fancy a natter about legal matters?

Are legal worries getting you down? Let the Law 365 team help you grow your business with less risk.

What makes us different?

  • We only work for Microsoft Partners, just like you.
  • We offer our services as a monthly subscription – so you can budget your legal costs for the year. No surprises.
  • We’re your  'in-house’ legal team, but we won’t bog you down in legal jargon.
  • We’ll work at your pace to get deals over the line. Fast.

Call us on 01892 313 943 or drop us a note at

Law 365 – The Award-Winning Microsoft Partner Law Firm

Enjoyed this article?

Read some of our other Insights.

6 min read

10 reasons to work for Law 365

1. Be part of a successful team! We quadrupled in size in 2020 and are planning to continue that growth in 2021. In the...
6 min read

Law 365 is a Great Place to Work!

Law 365 are proud to have become a certified Great Place to Work in 2021 and we are celebrating our success. We scored...
4 min read

The 7 most frequently asked interview questions at Law 365

We've hired over a dozen new employees this year and noticed that a lot of the same questions seem to pop up. So here...
6 min read

Working at Law 365: Jonathan's Story

Our most recent hire, Jonathan Sklar, describes how Law 365 is helping him develop as a newly qualified solicitor. When...
7 min read

Working at Law 365: Elizabeth's story

Our Associate, Elizabeth Tozzi, explains what attracted her to Law 365 and why she’s loving it so far – gaining...
6 min read

A day in the life of an Associate at Law 365

Our office in Tunbridge Wells is on the Common, close to beautiful green spaces, 5 minutes walk from the station, and...
Discover more insights