Almost every piece of distributed software has a license connected to it. The software license is an extended copyright agreement between the user and the producer outlining the legal usage of the software program. This includes copying, sharing and distribution of the software. There are two important terms differentiating open source licensing agreements from proprietary ones. An open source agreement requires that users cannot restrict distribution beyond the scope of the agreement. An open source agreement also requires that the source code must be available to the user. Any derived work must include the original license and the software code. Any work bundled with the open source program in distribution usually does not have to fall under the license.

Most users breeze through software license agreements. The proprietary ones concentrate on liability indemnification for the software producer and restrictions to the usage, copying and sharing of the software. Most all software licenses have an 'as is' warranty. This declares that the user accepts the software as it is without any guarantees to what might happen when used. The open source license agreement does not affect the average user beyond ability to copy the software. The agreement binds the work of any future developer to the license itself.

There are a number of open source licensing agreements, but the definitive basis for open source comes from the GNU General Public License. The GPL is the legal copyright vehicle that is at the core history of open source software. There has since been clarification on the definition of open source after other similar licenses were created. There are differences between licenses regarding restrictions on distribution, bundling of software and application of patches. The OSI is an organization that set parameters for open source licenses by defining and certifying them. Their definition criteria also helps software users understand these differences in open source license agreements.