OEM stands for "Original Equipment Manufacturer." This clause lets you embed or bundle the vendor's software into your own product and resell it to end customers. It's a low-risk clause because it's typically straightforward: you pay a per-unit fee, and the vendor's liability is limited since your customers are using the software through your product, not directly. The legal principle is that OEM licenses clearly separate the vendor's responsibility (to you) from the end-user's responsibility (to you, not the vendor). This matters because it clarifies who is liable if the software fails.
Confirm the per-unit pricing is locked in writing and won't increase without notice. Check whether the vendor will support your end-customers directly or only through you—this affects your support costs. Ask for a minimum volume commitment in exchange for a discount, which protects both parties. ---
Frequently Asked Questions
What does this clause mean in simple terms?
OEM stands for "Original Equipment Manufacturer." This clause lets you embed or bundle the vendor's software into your own product and resell it to end customers.
Why should I care about this clause?
It's a low-risk clause because it's typically straightforward: you pay a per-unit fee, and the vendor's liability is limited since your customers are using the software through your product, not directly.
What are my options?
The legal principle is that OEM licenses clearly separate the vendor's responsibility (to you) from the end-user's responsibility (to you, not the vendor).
How does this affect small businesses?
This matters because it clarifies who is liable if the software fails.