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Software License Agreement (with AI / Model-Training Clause)
A license for on-premises or downloadable software (not SaaS), with a front-and-center clause governing whether customers may use the software or its outputs to train AI models.
What is a Software License Agreement?
A Software License Agreement (with AI / Model-Training Clause) is a license for on-premises or downloadable software (not SaaS), with a front-and-center clause governing whether customers may use the software or its outputs to train AI models.
Companies that license software, code, models, datasets, or SDKs for a customer to install and run, and that need clean scope, restrictions, and an explicit position on AI and model-training use.
Software License Agreement template, current for 2026
A dedicated AI and model-training clause (control over whether Licensee may use the software or outputs to train models, plus a representation on any AI-generated code and its clean ownership), open-source-component disclosure, an export/sanctions clause, license-metering and audit rights, and a clear perpetual-vs-subscription toggle.
How HDAi does this differently
Unlike a static form, HDAi runs a guided interview and assembles your Software License Agreement as you answer. When you want it finished, a licensed Hart David Carson attorney reviews it and tailors it to your facts before you sign. The interview and the first draft are automated. The judgment belongs to an attorney.
What you’ll be asked
A short interview in plain language that asks only what this document needs.
- Effective date of this Agreement The date the license takes effect and from which all time periods run.
- Licensor (the software owner granting the license) The entity that owns the software and is granting the license. Its representations, IP ownership, and remedies flow from here.
- Licensee (the party receiving the license) The entity acquiring the right to use the software. Its permitted uses and restrictions are defined against this party.
- Name of the licensed software The product name identifies exactly what is being licensed and appears throughout the grant and warranty sections.
- Description of the software and any included components A precise description (modules, libraries, tools, sample data) fixes the scope of the license grant and avoids disputes over what is covered.
- How is the software delivered? On-premises vs. downloadable affects installation rights, hosting, and the environment in which the software may run.
- Is the license exclusive or non-exclusive? Exclusivity determines whether Licensor may license the same software to others; most software licenses are non-exclusive.
- Is the license perpetual or for a fixed term? Perpetual licenses continue indefinitely (subject to termination); term/subscription licenses expire and typically renew.
- Length of the initial term Only relevant for a fixed-term license; sets when the license expires absent renewal.
- Does the term automatically renew? Auto-renewal keeps the license live without re-signing; the notice window governs how a party opts out.
- Days before renewal to give non-renewal notice Defines the opt-out window for auto-renewal.
- Permitted purpose of use Internal business use vs. broader rights sets the outer boundary of what Licensee may do with the software.
- Any user, seat, installation, or capacity limits? Quantitative limits (named users, CPUs, installations, environments) define authorized scale and any overage exposure.
- Include an acceptance-testing period before the software is deemed accepted? An acceptance period lets Licensee test the software against the documentation and reject material non-conformities before acceptance triggers the warranty clock and payment.
- Length of the acceptance-testing period (in days) How long Licensee has to test and give notice of material non-conformities before acceptance.
- Is source code provided to Licensee? Whether source code is delivered changes the modification, reverse-engineering, and escrow provisions significantly.
- Include a source-code escrow arrangement? With object code only, an escrow lets Licensee obtain the source code from a neutral agent if the Licensor fails or ceases support, so Licensee can maintain the software. Only offered when source code is not delivered.
- Days after the Effective Date to establish the escrow The deadline for the parties to enter into the three-party escrow agreement and make the initial deposit.
- May Licensee modify or create derivative works? Modification rights govern whether Licensee can alter, adapt, or build on the software; usually restricted for object-code licenses.
- Does the software include open-source components? Open-source components are governed by their own licenses and are excluded from the Licensor's warranty and indemnity. Copyleft licenses (GPL, LGPL, AGPL, MPL) can impose reciprocal obligations, so they are flagged in the open-source notices file.
- Was any part of the software AI-generated or developed with automated code-generation tools? If any portion was AI-generated, the Licensor gives a clean-title / provenance representation that it has the rights to license those portions and that their development did not infringe third-party rights in training data or model weights.
- AI / model-training: may the SOFTWARE ITSELF (code, models, weights) be used to train, fine-tune, or develop AI/ML models? This is the core AI clause. It states whether Licensee (or anyone) may feed the software, its code, or embedded models into training pipelines. Most licensors prohibit this outright.
- AI / model-training: may the OUTPUTS the software generates be used to train or develop AI/ML models? Distinct from the software itself. Outputs (results, generated data, reports) may be commercially valuable training data, and this sets whether they can feed model development.
- Who owns the outputs the software produces? Output ownership determines who controls generated results and data, which interacts directly with the training-data rights above. Joint ownership adds a mutual cross-license and an express no-duty-to-account.
- May LICENSOR use Licensee's usage data / telemetry to train or improve Licensor's own AI models? An increasingly negotiated point. It decides whether the vendor may harvest Licensee's usage data for its own model development. Many enterprise licensees require this to be off or opt-in.
- Will Licensor process any personal data on Licensee's behalf (e.g., support, telemetry)? If personal data is processed, the agreement cross-references a data-processing agreement (DPA) and allocates GDPR and CCPA/CPRA compliance. This ties to the Section 5(d) telemetry option.
- Consequence if the AI/model-training restrictions are breached A prohibited-training breach can be catastrophic and irreversible, so licensors often designate it a material breach with special remedies.
- How is the license priced? Fee structure drives the payment mechanics and, for term licenses, the renewal economics.
- License fee amount (USD) The principal consideration for the grant; anchors payment obligations and, often, the liability cap.
- Recurring fee amount (USD) The periodic charge for a subscription or support.
- Billing period for the recurring fee Sets the cadence for invoicing and renewal.
- Payment due within how many days of invoice? The net payment window; late payment triggers interest and, eventually, suspension rights.
- Are maintenance, updates, and support included? Bundling updates and support into the license affects the warranty period and Licensee's ongoing entitlements. Updates (fixes) are distinguished from Upgrades (new functionality), which are licensed separately.
- Include a service-level / support-tier hook? Adds a hook to an order or support schedule setting response/resolution targets and any service-credit remedy. Most useful when live support is included.
- Software performance warranty Sets whether Licensor warrants the software will perform to spec and for how long, or disclaims all warranties.
- Warranty period length (in days) How long the limited warranty runs from delivery or acceptance.
- Does Licensor indemnify Licensee against IP infringement claims? IP indemnity shifts the risk that the software infringes a third party's rights onto the Licensor; standard in enterprise licenses.
- Limitation of liability cap Caps total monetary exposure; the reference amount is usually tied to fees paid.
- Fixed liability cap amount (USD) The hard dollar ceiling on liability.
- Include mutual confidentiality obligations? Protects each party's non-public information exchanged under the license; standard in commercial software deals.
- Include Licensor audit rights to verify compliance? Audit rights let Licensor verify usage limits and that the AI/training restrictions are being honored.
- May Licensee assign or transfer the license? Assignment terms control if and how the license can move to another entity (for example, on a sale of the business).
- Governing law (US state) The state whose law governs interpretation and enforcement.
- How are disputes resolved? Chooses courts vs. arbitration and sets the venue, which materially affects cost and process.
- County and state for venue (courts or arbitration seat) Fixes where a dispute is heard.
- Licensor notice email / address Where formal notices to Licensor are sent.
- Licensee notice email / address Where formal notices to Licensee are sent.
Frequently asked
About the Software License Agreement and how HDAi works.
What is a Software License Agreement (with AI / Model-Training Clause)? +
A Software License Agreement (with AI / Model-Training Clause) is a license for on-premises or downloadable software (not SaaS), with a front-and-center clause governing whether customers may use the software or its outputs to train AI models. Companies that license software, code, models, datasets, or SDKs for a customer to install and run use it when they need clean scope, restrictions, and an explicit position on AI and model-training use.
Is HDAi's Software License Agreement (with AI / Model-Training Clause) legally binding? +
The Software License Agreement (with AI / Model-Training Clause) HDAi generates is a professionally drafted document that becomes binding once it is completed, reviewed, and properly signed. If you want a licensed Hart David Carson attorney to finish it, book a planning call. The firm's flat-fee packages, the Illinois Family Plan and Company Launch, cover the most common needs; for any other draft, an Illinois attorney will tell you on the call what finishing it would involve.
Do I need a lawyer to use this Software License Agreement (with AI / Model-Training Clause)? +
You can generate and download the Software License Agreement (with AI / Model-Training Clause) in minutes, free of charge. A licensed Hart David Carson attorney can then review it and tailor it to your facts before you sign, which is the part no template can do.
What makes this Software License Agreement (with AI / Model-Training Clause) current for 2026? +
A dedicated AI and model-training clause (control over whether Licensee may use the software or outputs to train models, plus a representation on any AI-generated code and its clean ownership), open-source-component disclosure, an export/sanctions clause, license-metering and audit rights, and a clear perpetual-vs-subscription toggle.
How long does the Software License Agreement (with AI / Model-Training Clause) take? +
Estimated time about 24 min (47 questions), depending on how much you already know. The document assembles as you answer. Export it as PDF or Word, or send it to a Hart David Carson attorney for review.
Does this Software License Agreement (with AI / Model-Training Clause) work in my state? +
HDAi's interview is state-aware. If you ask an attorney to finish the draft, a licensed Hart David Carson attorney confirms it against your state's requirements before you rely on it. Validity and required formalities vary by state.
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