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A software license is a legally binding agreement between a developer and user that outlines how the software can be used, shared, and modified. Users may only use the software as defined by the license, which can include restrictions on copying, altering, and redistributing the software. There are two common types of licenses: shrink-wrap licenses and installation agreements. Shrink-wrap licenses take effect when the packaging is opened, while installation agreements are implemented when the user accepts the terms during installation. Users must agree to the terms specified in the End User License Agreement (EULA) displayed on screen during installation.