Free Software Licence Agreement Template

SOFTWARE LICENCE AGREEMENT

End User Licence  ·  England And Wales  ·  CDPA 1988

This Software Licence Agreement (this "Agreement") is made on 2026-05-01 between Quartz Software Ltd (Company No. 09876543) of 42 Innovation Square, Manchester, M1 3AB (the "Licensor") and Meridian Retail Group plc (Company No. 05123456) of 25 Kings Road, London, EC1A 1BB (the "Licensee"). The parties agree as follows.

"Software" means Quartz POS Enterprise v3.2.1, in object-code form, including all updates, patches and upgrades released by the Licensor during the Licence Term. "Documentation" means the user manuals, installation guides and online help files made available by the Licensor in relation to the Software. "Authorised User" means any employee, worker or contractor of the Licensee authorised in writing to use the Software, subject to any User Limit. "Intellectual Property Rights" or "IPR" means copyright and related rights, trade marks, database rights, rights in designs, know-how, trade secrets and all other intellectual property rights, in each case whether registered or unregistered, including all applications and rights to apply for renewals, worldwide. "Licence Term" means the period described in Clause 4 below. "Licensee Data" means any data uploaded to, generated by or processed through the Software by or on behalf of the Licensee, together with any output or report derived therefrom.

Subject to the terms of this Agreement and payment of the Licence Fee when due, the Licensor grants to the Licensee a non-exclusive, non-transferable, revocable enterprise licence across the Licensee's group of companies to install, access and use the Software and Documentation solely for the Licensee's internal business purposes during the Licence Term. The Licensor reserves all rights not expressly granted under this Agreement. All rights in and to the Software are owned by or licensed to the Licensor and are protected by copyright under the Copyright, Designs and Patents Act 1988 (including section 3(1)(b), which recognises computer programs as literary works) and by the law of confidence.

The Licensee shall pay the Licensor a Licence Fee of £12,500, payable annually in advance within 30 days of the date of each annual invoice. All sums are exclusive of VAT, which shall be added at the rate and in the manner prescribed by the Value Added Tax Act 1994. Any sum not paid by its due date shall bear interest and fixed compensation in accordance with the Late Payment of Commercial Debts (Interest) Act 1998, including statutory interest at 8% above the Bank of England base rate under section 6 of that Act. The Licensor may suspend the Licensee's access to the Software while any undisputed sum remains overdue by more than 14 days, having first given written notice.

This Agreement shall commence on 2026-05-01 and continue for an initial period of one (1) year (the "Initial Term"). Thereafter, it shall automatically renew for successive periods of twelve (12) months (each a "Renewal Term") unless either party gives not less than thirty (30) days' written notice of non-renewal prior to the end of the then-current term.

The Licensee shall not, and shall procure that no Authorised User or third party shall:

(a) copy the Software or Documentation, save to the extent strictly necessary for back-up or disaster-recovery purposes as permitted by section 50A of the Copyright, Designs and Patents Act 1988;
(b) modify, adapt, translate or create derivative works based on the Software, save to the extent permitted by sections 50B (decompilation for interoperability) and 50BA (observing, studying and testing) of the Copyright, Designs and Patents Act 1988;
(c) distribute, sell, resell, transfer, assign or otherwise make the Software available to any third party without the Licensor's prior written consent;
(d) reverse engineer, disassemble or decompile the Software or attempt to derive the source code, except to the limited extent expressly permitted by section 50B of the Copyright, Designs and Patents Act 1988 (and then only after first requesting the relevant interoperability information from the Licensor);
(e) sublicense, rent, lease, lend, time-share or outsource the Software or allow access by any third party as a service bureau;
(f) remove, obscure or alter any copyright, trade mark or other proprietary notices affixed to or contained within the Software or Documentation (such notices also constituting assertions of moral rights under sections 77 to 85 of the Copyright, Designs and Patents Act 1988 where applicable);
(g) use the Software in any manner that would contravene section 1 of the Computer Misuse Act 1990 (unauthorised access) or section 3 of that Act (unauthorised acts with intent to impair operation);
(h) use the Software in breach of any applicable law, including export control legislation, sanctions regimes or UK GDPR;
(i) use the Software, or any output of the Software, to train, fine-tune or otherwise improve any third-party machine-learning model or generative AI system without the Licensor's prior written consent. The licence is limited to a maximum of 50 Authorised Users at any one time (the "User Limit"). The Licensor may audit compliance with the User Limit in accordance with Clause 10 below.

The Licensor (or its suppliers) retains all right, title and interest in and to the Software, the Documentation, and all Intellectual Property Rights therein, including without limitation all copyright subsisting under the Copyright, Designs and Patents Act 1988 and all database rights under the Copyright and Rights in Databases Regulations 1997 (SI 1997/3032). Nothing in this Agreement assigns or transfers any IPR to the Licensee. Licensee Data remains the property of the Licensee, who grants the Licensor a limited non-exclusive licence to host, process and store Licensee Data solely to the extent necessary to perform its obligations under this Agreement. Any feedback, suggestions or enhancement requests provided by the Licensee may be used by the Licensor without restriction and without obligation to pay compensation, save that such use shall not identify the Licensee or its personnel without consent.

The Licensor shall indemnify and defend the Licensee against any claim brought by a third party that the Licensee's permitted use of the Software in accordance with this Agreement infringes any UK patent, registered design, registered trade mark, copyright or database right (an "IP Claim"), and shall pay the amount of any final judgment awarded against the Licensee (or any settlement to which the Licensor consents in writing). This indemnity is conditional on the Licensee: (a) promptly notifying the Licensor in writing of any IP Claim; (b) giving the Licensor sole control of the defence and settlement; and (c) providing reasonable co-operation at the Licensor's cost.

If the Software (or any part) is, or in the Licensor's reasonable opinion is likely to be, found to infringe, the Licensor may at its option and expense: (i) procure for the Licensee the continuing right to use the Software; (ii) replace or modify the Software so it is non-infringing without material loss of functionality; or (iii) on at least thirty (30) days' written notice, terminate the affected licence and refund a proportion of the Licence Fees calculated on a straight-line basis over the unexpired portion of the Licence Term.

Exclusions. This indemnity does not apply to claims arising from (1) the Licensee's breach of this Agreement; (2) combination of the Software with non-certified third-party products; (3) modifications made by anyone other than the Licensor; or (4) Licensee Data uploaded to the Software.

AI Functionality. The Software incorporates artificial-intelligence ("AI") or generative-AI ("GenAI") functionality, including foundation-model integrations, machine-learning components, automated decision support and/or content generation. The Licensee acknowledges that AI Output may be inaccurate, incomplete, biased or otherwise unsuitable, and shall apply appropriate human review before relying on AI Output for any high-impact decision affecting individuals or third parties.

AI Output Ownership. As between the parties, the Licensee owns all right, title and interest in and to the AI Output (subject only to the Licensor's residual rights in the underlying Software). The Licensee acknowledges that, given the current state of UK case-law on AI output ownership, registrability of copyright in AI-generated works under section 9(3) of the Copyright, Designs and Patents Act 1988 (computer-generated works) remains untested; the Licensor makes no warranty that the AI Output is protectable as the Licensee's own work.

Training-Data Warranty. The Licensor warrants that, to the best of its knowledge having made reasonable enquiry, the AI models embedded in the Software were trained on data lawfully obtained and used in accordance with applicable UK copyright, database-rights and data-protection law. The Licensor makes no warranty as to the conduct of third-party foundation-model providers whose outputs may be invoked at the Licensee's request via API.

No Inputs as Training Data. The Licensor shall not use the Licensee's inputs, prompts, Licensee Data or any AI Output to train, fine-tune or improve any AI model that is offered to third parties without the Licensee's prior written consent.

Indemnity Carve-Out. Subject to Clause 7 (where included), the Licensor's IP indemnity does not extend to third-party IP infringement claims arising specifically from AI Output, save to the extent the Licensor has expressly warranted otherwise. The Licensee acknowledges that English courts have not yet ruled definitively on the IP status of AI-generated content (see Getty Images (US) Inc v Stability AI Ltd proceedings).

SBOM Warranty. The Licensor warrants that it has identified all open-source software ("OSS") components incorporated into the Software and maintains a Software Bill of Materials ("SBOM") in machine-readable format (CycloneDX or SPDX) which it shall provide to the Licensee on reasonable written request.

Copyleft Exclusion. The Licensor warrants that none of the OSS components, as incorporated in the Software, requires the Licensee to disclose the source code of the Software or any derivative work, or to license the Software or any Licensee Data under any "copyleft" or "viral" open-source licence (including but not limited to GNU GPL v2, GNU GPL v3, GNU AGPL v3, OSL or any licence with comparable reciprocal source-disclosure obligations).

Licence Compliance. The Licensor warrants compliance with the notice and attribution requirements of any OSS licences applicable to the included components, and shall provide the Licensee with copies of those licences on request.

Indemnity. The Licensor shall indemnify the Licensee against any claim, fine or loss arising from the Licensor's failure to comply with the terms of any OSS licence governing the components incorporated into the Software, subject to the limitation of liability in Clause 12.

Security Standard. The Licensor warrants that it operates, in respect of its development and hosting of the Software, an information-security management programme aligned to ISO/IEC 27001:2022, NCSC Cyber Essentials Plus, or an equivalent recognised standard.

Secure-by-Design. The Software has been developed with secure-coding practices (OWASP ASVS or equivalent), undergoes regular static and dynamic security testing, and is subject to annual third-party penetration testing.

Vulnerability Disclosure. The Licensor maintains a published vulnerability-disclosure policy and shall investigate any reported vulnerability in the Software in good faith. The Licensor shall use reasonable endeavours to release a patch, mitigation or workaround for any vulnerability that materially affects the Software's confidentiality, integrity or availability within 60 days of confirmation, prioritising the timeline by CVSS v3.1 severity (critical = 7 days where actively exploited; high = 30 days; medium = 60 days; low = 90 days).

Incident Notification. The Licensor shall notify the Licensee without undue delay and in any event within seventy-two (72) hours of becoming aware of any confirmed security incident materially affecting the Software or Licensee Data, providing reasonable information to enable the Licensee to assess and respond.

During the Licence Term, the Licensor shall provide technical support with reasonable care and skill as required by section 13 of the Supply of Goods and Services Act 1982. Support shall comprise: (a) email and portal support during UK business hours (Monday to Friday, 09:00 to 17:00 GMT/BST, excluding English public holidays); (b) bug-fix releases, maintenance patches and minor version updates at no additional charge; and (c) major version upgrades, where released, subject to the Licensor's then-current upgrade terms. Response within four (4) UK business hours for Priority 1 incidents and one (1) UK business day for Priority 2 incidents. Support does not extend to issues arising from: (i) unauthorised modification of the Software; (ii) use of the Software otherwise than in accordance with the Documentation; (iii) combination of the Software with third-party products not certified by the Licensor; or (iv) failures of the Licensee's hardware, operating system or network.

To the extent the Software processes personal data (as defined in Article 4(1) of the UK GDPR) of individuals for whom the Licensee is the controller, the parties shall comply with their respective obligations under the UK GDPR, the Data Protection Act 2018 and any applicable codes of practice issued by the Information Commissioner's Office. Where the Licensor processes such personal data on behalf of the Licensee, the parties shall enter into a data processing agreement meeting the requirements of Article 28 UK GDPR prior to the commencement of processing. Neither party shall transfer personal data outside the United Kingdom save in accordance with Chapter V of the UK GDPR (including by way of the UK Addendum to the EU Standard Contractual Clauses or the UK International Data Transfer Agreement). Each party shall notify the other without undue delay (and in any event the Licensor shall notify the Licensee within seventy-two (72) hours) of any personal data breach that affects personal data processed in connection with the Software, in line with Article 33 UK GDPR.

The Licensor warrants that, for a period of ninety (90) days from the Effective Date, the Software will perform substantially in accordance with the Documentation when used on a supported operating environment. The Licensee's sole and exclusive remedy for breach of this warranty shall be, at the Licensor's option, (a) to use reasonable endeavours to correct the non-conformity; or (b) to refund the Licence Fee paid in respect of the non-conforming Software upon return or deletion. Subject to Clause 12 and to the extent permitted by law (including section 3 of the Unfair Contract Terms Act 1977 and the reasonableness test in section 11), all other conditions, warranties and terms (whether express or implied by statute, common law or otherwise) are excluded, including any implied terms as to satisfactory quality, fitness for a particular purpose or non-infringement. Where the Licensee deals as a consumer, the statutory rights under Chapter 3 (Digital Content) of Part 1 of the Consumer Rights Act 2015 — including the rights in sections 34 (satisfactory quality), 35 (fitness for particular purpose) and 36 (as described), and remedies under sections 42 to 46 — are not affected by this Agreement.

Fraud-Prevention. The Licensor warrants that, where it constitutes a "large organisation" within the meaning of section 199 of the Economic Crime and Corporate Transparency Act 2023, it maintains reasonable fraud-prevention procedures as required by that section (effective 1 September 2025) and has not committed (and to its knowledge no associated person has committed) a "relevant offence" within that section in connection with the Software.

Nothing in this Agreement excludes or limits either party's liability for: (a) death or personal injury caused by negligence (section 2(1) Unfair Contract Terms Act 1977); (b) fraud or fraudulent misrepresentation (section 3 Misrepresentation Act 1967); or (c) any other liability which cannot lawfully be excluded or limited. Subject to the foregoing, neither party shall be liable to the other, whether in contract, tort (including negligence), breach of statutory duty or otherwise, for: (i) loss of profits; (ii) loss of sales or business; (iii) loss of agreements or contracts; (iv) loss of anticipated savings; (v) loss of or damage to goodwill; (vi) loss of or corruption of data; or (vii) any indirect or consequential loss. Subject always to the foregoing, the total aggregate liability of the Licensor to the Licensee in respect of all claims arising under or in connection with this Agreement shall not exceed the total Licence Fees paid by the Licensee in the twelve (12) months immediately preceding the first event giving rise to liability. The parties acknowledge that these limitations are reasonable for the purposes of section 11 of the Unfair Contract Terms Act 1977 (see Watford Electronics Ltd v Sanderson CFL Ltd [2001] EWCA Civ 317), having regard to the Licence Fee, the availability of insurance and the allocation of risk agreed between them.

The Licensor may, on not less than fourteen (14) days' prior written notice, and not more than once in any twelve (12) month period (save where the Licensor has reasonable grounds to suspect a breach), audit the Licensee's use of the Software to verify compliance with the Licence Term, the User Limit and this Agreement. Audits shall be carried out during normal business hours, subject to reasonable security and confidentiality requirements. The Licensor shall bear its own costs unless the audit reveals under-licensing of more than 5%, in which case the Licensee shall pay (i) the shortfall in Licence Fees (calculated at the then-current list price) and (ii) the Licensor's reasonable audit costs.

The Licensor shall, within thirty (30) days of the Effective Date, deposit the source code of the Software (together with build scripts and technical documentation sufficient to enable a competent developer to maintain it) with an independent escrow agent under an NCC Group (or equivalent) tripartite escrow agreement. The source code shall be released to the Licensee on the occurrence of a release event, including (a) the Licensor entering into liquidation or administration other than for the purposes of a solvent restructuring; (b) the Licensor ceasing to carry on business; or (c) the Licensor materially breaching its support obligations and failing to remedy such breach within sixty (60) days of written notice. Upon release, the Licensee may use the source code solely for internal support and maintenance of the Software, subject to the confidentiality obligations in this Agreement.

Each party shall keep in strict confidence all technical or commercial know-how, specifications, inventions, processes or initiatives which are of a confidential nature and have been disclosed by the other party, its employees, agents or subcontractors, and any other confidential information (including the Software source code, the Documentation and the terms of this Agreement). Each party may disclose such information: (a) to its employees, officers, advisers or subcontractors who need to know it and are bound by obligations of confidentiality no less onerous than those in this clause; (b) as required by law, any governmental or regulatory authority, or any court of competent jurisdiction. This clause survives termination of this Agreement for a period of five (5) years and indefinitely in respect of any information constituting a trade secret within the meaning of the Trade Secrets (Enforcement, etc.) Regulations 2018 (SI 2018/597).

Without prejudice to any other rights or remedies, either party may terminate this Agreement with immediate effect by written notice if the other party: (a) commits a material breach of this Agreement and (where remediable) fails to remedy such breach within thirty (30) days of written notice; (b) commits persistent breaches sufficient to constitute a repudiatory breach; (c) becomes insolvent, unable to pay its debts as they fall due, enters administration, liquidation or analogous insolvency procedure under the Insolvency Act 1986, or has a receiver appointed over any of its assets; or (d) ceases or threatens to cease to carry on business. In respect of the Licensor only, the Licensor may also terminate for non-payment of undisputed sums more than thirty (30) days overdue. In the case of an annual-term licence, either party may terminate without cause at the end of the Initial Term or any Renewal Term by giving not less than 30 days written notice. On termination: (i) all licences granted under this Agreement shall terminate immediately; (ii) the Licensee shall cease all use of the Software and Documentation and permanently delete or destroy all copies (certifying such deletion in writing if requested); and (iii) any provision intended to survive termination (including clauses on IP, confidentiality, liability and governing law) shall continue in force.

Data Export. On expiry or termination of this Agreement for any reason, the Licensor shall, on the Licensee's written request made within ninety (90) days of termination, export all Licensee Data in a structured, commonly used and machine-readable format (CSV, JSON or other format reasonably agreed) and shall deliver the export to the Licensee within thirty (30) days of the request. Thereafter, the Licensor shall securely delete or anonymise all Licensee Data within ninety (90) days of the export, save where retention is required by law, in which case the Licensor shall continue to apply the confidentiality and security obligations of this Agreement.

Transition Assistance. The Licensor shall provide reasonable assistance for an agreed transition period (not exceeding three (3) months) to facilitate migration of the Licensee Data and processes to the Licensee or its nominated replacement supplier, at the Licensor's then-current professional-services rates. Such assistance shall include reasonable knowledge transfer, configuration export and access to logs.

No Hostage Tactic. The Licensor shall not condition the return or deletion of Licensee Data on payment of any disputed sum, and any genuine fee disputes shall be resolved without prejudice to the Licensee's right to its data.

Neither party shall be in breach of this Agreement, nor liable for delay in performing, or failure to perform, any of its obligations under this Agreement, if such delay or failure results from events, circumstances or causes beyond its reasonable control, including acts of God, war, terrorism, pandemic, failure of telecommunications or power supplies, and cyber-attack by a third party (excluding any attack facilitated by the affected party's negligence). The affected party shall notify the other promptly, use reasonable endeavours to mitigate, and resume performance as soon as reasonably practicable. If the event continues for more than sixty (60) days, either party may terminate this Agreement on written notice.

This Agreement and any dispute or claim (including non-contractual disputes or claims) arising out of or in connection with it or its subject matter or formation shall be governed by and construed in accordance with the law of England and Wales. The parties irrevocably agree that the courts of England and Wales shall have exclusive jurisdiction to settle any such dispute or claim, save that the Licensor may seek injunctive or equivalent relief in any court of competent jurisdiction to protect its Intellectual Property Rights or Confidential Information.

Entire agreement: This Agreement (together with any schedules and order forms referred to in it) constitutes the entire agreement between the parties and supersedes all prior negotiations, representations and agreements, save that nothing in this clause limits any liability for fraud or fraudulent misrepresentation.

Variation: No variation of this Agreement is effective unless made in writing and signed by or on behalf of both parties.

Waiver: No failure or delay to exercise any right or remedy under this Agreement shall operate as a waiver of such right or remedy.

Severance: If any provision is or becomes invalid, illegal or unenforceable, it shall be deemed modified to the minimum extent necessary, with the remainder of this Agreement unaffected.

Assignment: The Licensee shall not assign, transfer, charge or otherwise deal with any of its rights under this Agreement without the prior written consent of the Licensor. The Licensor may freely assign its rights to any group company or to any successor in title.

Third-party rights: A person who is not a party to this Agreement has no rights under the Contracts (Rights of Third Parties) Act 1999 to enforce any of its terms.

Notices: Notices shall be given in writing to the addresses stated in this Agreement (or such other address as notified in writing) and shall be deemed received on delivery if delivered by hand, on the next business day if sent by pre-paid first-class post, or on the next business day following transmission if sent by email.

Counterparts: This Agreement may be executed in counterparts, each of which when executed shall constitute a duplicate original, and delivery of an executed counterpart by email (PDF) or qualified electronic signature in accordance with the Electronic Communications Act 2000 is effective delivery.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date indicated.