Evaluation license: Overview, definition, and example
What is an evaluation license?
An evaluation license is a temporary, limited permission granted to a user or organization to test or assess a product, service, or software before deciding whether to purchase or fully commit to it. The purpose of the evaluation license is to allow the user to evaluate the features, functionality, and benefits of the product in a real-world environment without making a long-term commitment or paying the full price. These licenses are often provided with restrictions such as time limits, usage limits, or limited features.
For example, a software company may offer an evaluation license for 30 days to allow potential customers to test the software’s capabilities before purchasing a full license.
Why is an evaluation license important?
An evaluation license is important because it allows both the vendor and the customer to assess whether a product or service meets the customer’s needs before committing to a full purchase or long-term contract. For the vendor, it provides an opportunity to showcase the product’s value and functionality in real use cases, helping to build trust and confidence with the potential customer. For the customer, it mitigates the risk of purchasing a product that does not meet expectations or requirements.
Evaluation licenses also help facilitate purchasing decisions by giving customers hands-on experience with the product, often leading to increased sales conversion rates for businesses offering them.
Understanding evaluation license through an example
Imagine a company is considering purchasing a new project management software. The vendor offers an evaluation license that allows the company to use the software free of charge for 30 days, with access to most features. During this period, the company can test how well the software fits its needs, assess its usability, and decide whether to purchase a full license for continued use after the trial period ends.
In another example, a music production company might offer an evaluation license for its digital audio software, allowing potential customers to try it out with limited features for a month. If the customer is satisfied with the software, they can purchase a full license with access to all features and without any time limits.
Example of evaluation license clause
Here’s how an evaluation license clause might look in a licensing agreement:
“The Company grants the Customer a non-transferable, non-exclusive evaluation license to use the Software for a period of 30 days from the Effective Date. During the evaluation period, the Customer may use the Software solely for the purpose of evaluating its features and capabilities. The Customer shall not use the Software for any commercial or production purposes during the evaluation period.”
Conclusion
An evaluation license is a temporary, limited license granted to allow potential customers to test a product, software, or service before making a final purchasing decision. This license benefits both the vendor and the customer, providing an opportunity to assess the product’s suitability while reducing the risk of dissatisfaction. Evaluation licenses are commonly used in the software industry but can also apply to other products and services where a trial period can help customers make an informed decision.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.