A software license comprises the permissions, rights and restrictions imposed on software (whether a component or a free-standing program). Use of software without a license could constitute infringement of the owner's exclusive rights under copyright or, occasionally, patent law and allow the owner to sue the infringer.
Under a software license, the licensee is permitted to use the licensed software in compliance with the specific terms of the license. If there is a breach of the license, depending on the license it may result in termination of the license, and potentially the right of the owner to sue.
A software vendor may offer a software license unilaterally (without giving the licensee the opportunity to negotiate for more favorable terms) such as in a shrink wrap contract, or even as part of a software license agreement with another party. Virtually all mass produced proprietary software is sold under some form or fashion of software license agreement. One off, or custom software is often licensed under terms of which are specifically negotiated between the licensee and licensor.
In addition to granting rights and imposing restrictions on use of the software, software licenses typically contain provisions which allocate liability and responsibility between the parties. In enterprise and commercial software transactions these terms (such as limitations of liability, warranties and warranty disclaimers, and indemnity if the software infringes intellectual property rights of others) are often negotiated by attorneys specialized in software licensing. The legal field has seen the growth of this specialized practice area due to unique legal issues with software licenses, and the desire of software companies to protect assets which, if licensed improperly, could diminish their value.

See also

Free/Open_Source_Software:Licensing