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Institute for Legal Questions on Free and Open Source Software

How and when is a license agreement concluded?

The precise time of the conclusion of the license agreement is important since from this time on, the provisions of the open source license become effective with their associated rights and obligations. The license agreements are regularly added to the software in an independent file, generally termed "license" or "copying".  If the user receives the software including the license file, this does not constitute a license agreement.  According to German contractual law, two corresponding declarations of intent are required, the "offer" and "acceptance."  In addition, the contents of the agreement must be clearly identifiable for an agreement to be effectively concluded. 
The licensor’s contractual offer is included in the accompanying license agreement and is thereby easy to identify.  Whoever offers software under an open-source license makes a contractual offer to anyone who wants to accept it.  The respective contractual partners do not have to be known.  The situation is comparable to someone setting up cigarette vending machines who offers to sell cigarettes to everybody without having (or wanting) to know the respective customers.
When is this offer accepted? Neither downloading the software nor the time of distribution satisfies the legal requirements for the conclusion of a contract since the user generally cannot have any knowledge of the license text at this time.  For an open-source license with all of its provisions to be an effective contract, the licensee must be reasonably able to read the contractual text and accept it in a manner "visible" to the outside world. In correspondence with these legal requirements, it is for example assumed in GPLv2 that the mere acquisition of the software does not trigger the applicability of the GPL.  Under sec. 5 GPLv2, it states "You are not required to accept this License, since you have not signed it. However, nothing else grants you permission to modify or distribute the Program or its derivative works."   A user can therefore acquire and use an open-source program without having concluded a license agreement.  The central reason for this is that the obligations of most open source licenses only take effect when the software is modified or distributed. Most open source licenses do not have to be accepted to merely use the software. 
The offer is generally only accepted upon concluding the open-source license agreement when the acquiring party wants to make use of particular entitlements from an open-source license.  The agreement is accepted in most cases "conclusively," i.e., by conclusive actions. This is generally the case when the software is modified or distributed to third parties.  A user thereby indicates that he agrees to the GPL (since he would not otherwise be allowed to perform these actions).


This FAQ is based on the FAQs of the commentary “Die GPL kommentiert und erklaert” [Discussions and explanations of the GPL] published by ifrOSS at O’Reilly.
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