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a software license is a legally binding agreement made between the software developer and the user outlining how the software can be used or shared if the user can view the underlying source code if the user can copy alter or redistribute the software and where the software can be installed and how frequently once you purchase software or even if you get it for free you can only use it as defined by the software license software publishers typically use two techniques to validate a software license first is the shrink drop license which license goes into effect as soon as you open the packaging second is the installation agreement which is used for downloaded software its license goes into effect as soon as you click the option to accept the terms of the agreement in the installation agreement you have to agree to the terms as stated in the end user license agreement or eula it is displayed on the screen when you the software most of the software license agreements contain at