The Sales Agreement which forms this Contract is drafted for the Supplier’s benefit, and provides for standard terms of sale of computer hardware and incorporates a licence for the software supplied with the system in the absence of any separate software licence agreements accompanying the same.
As every computer system contains software for its operation (see Explanatory Note to Contract 1), which will include operating system software and perhaps also some additional applications supplied with the system. The best contractual manner of protecting software is with a software licence which should be signed or accepted prior to or upon delivery (but prior to use) of the software (see Contract 1).
Most application programs supplied with a new system will be provided with a “shrink wrap” licence (see Contract 2) which, although not the best form of a binding contract, does nevertheless notify the purchaser of a computer system that the software is under licence (and not sold with the system).
However, operating system software is rarely subject to a separate licence nor is it always possible to have the particular software licence relating to the chosen system available at the time of selling a computer system. Therefore, in an endeavour to give some degree of license protection to operating system software and application programs supplied or already installed on a computer system at the time of its sale, it is prudent for the supplier to have a form of licence incorporated in the sales agreement as a failsafe.