What is a On Premise Software License Agreement?
This On-Premise Software License Agreement is designed for use in the Australian market when a software provider (licensor) grants a license to a customer (licensee) to use software on the customer's own infrastructure. The agreement is essential for any business providing or acquiring software that will be installed and operated on-premise rather than through cloud-based services. It includes comprehensive terms covering license scope, fees, installation, maintenance, support, warranties, and compliance with Australian legislation. The document addresses key considerations under Australian law, including consumer protection, intellectual property rights, and privacy requirements. This agreement type is particularly relevant when data sovereignty, security requirements, or business preferences necessitate on-premise software deployment rather than cloud-based solutions.
About the On Premise Software License Agreement
An On Premise Software License Agreement is a crucial legal document that governs the relationship between software providers and customers when software is installed and operated on the customer's own infrastructure. Unlike cloud-based software agreements, this document addresses the unique legal and technical considerations that arise when software resides within your organisation's physical or virtual environment.
When do you need this document?
You need this agreement whenever you're licensing software for installation on your own servers or infrastructure. This includes enterprise software solutions, specialised industry applications, database management systems, or any software where data sovereignty, security requirements, or business preferences dictate on-premise deployment. The agreement is essential whether you're a software provider offering on-premise solutions or a business acquiring such software. It becomes particularly important when dealing with sensitive data, regulatory compliance requirements, or when your organisation requires complete control over the software environment.
Key legal considerations
The agreement must clearly define the scope of your license, including permitted uses, user limitations, and geographical restrictions. Intellectual property protection is paramount, as on-premise software creates additional risks of unauthorised copying or modification. You need robust clauses covering installation procedures, system requirements, and ongoing maintenance obligations. Support and warranty terms are critical, particularly regarding response times, bug fixes, and compatibility issues. The agreement should address liability limitations, especially for system failures or data loss, while ensuring compliance with mandatory Australian consumer protections that cannot be excluded.
Legal requirements in Australia
Under the Copyright Act 1968, software is protected as intellectual property, requiring careful definition of permitted reproduction and modification rights. The Competition and Consumer Act 2010 imposes mandatory consumer guarantees that cannot be contracted out, including requirements that software be fit for purpose and of acceptable quality. You must ensure warranty disclaimers don't breach these consumer protections. The Privacy Act 1988 requires compliance with Australian Privacy Principles if the software processes personal information, mandating appropriate data handling and security measures. Electronic Transactions Act 1999 governs digital signatures and electronic contract formation. Your agreement must also consider Australian contract law principles regarding formation, interpretation, and enforcement, ensuring terms are clear, fair, and legally enforceable under Australian jurisdiction.
Governing law
Applicable law
This On Premise Software License Agreement is drafted to comply with Australia law. Key legislation includes:
Competition and Consumer Act 2010 (Cth): Contains the Australian Consumer Law which provides consumer guarantees and protections that cannot be contracted out of, including provisions about unfair contract terms
Privacy Act 1988 (Cth): Regulates the handling of personal information by businesses and requires compliance with the Australian Privacy Principles
Electronic Transactions Act 1999 (Cth): Provides the legal framework for electronic transactions and digital signatures in Australia
Contract Law (Common Law): Covers fundamental principles of contract formation, enforcement, and interpretation under Australian common law
Patents Act 1990 (Cth): May be relevant if the software contains patentable innovations or processes that need protection
Security of Critical Infrastructure Act 2018 (Cth): May be relevant if the software is used in critical infrastructure sectors or handles sensitive data
Trade Practices Amendment (Australian Consumer Law) Act 2010: Provides specific protections regarding warranties, guarantees, and fitness for purpose that may apply to software products
