(EU) Can a license agreement demand a specific compensation for unlicensed use of the software?
<p><strong>Scenario:</strong> As a software developer I create a WordPress extension that does x which I sell for, let's say, $20.
When buying it's clearly mentioned you are only allowed to install it on a single website.</p>
<p>When you install it on your website and try to run it for the first time you are asked to enter your license key and accept, by ticking a box, that if you use it without a proper key or use it on multiple websites with a single key you will be taken to court and have to pay me $5000 plus attorney fees for each unlicensed install.</p>
<p><strong>Question:</strong> Is this legal? Is it enforceable?</p>

<p>Probably not. This condition is what's known as a penalty clause, which is not universally allowed. <a href="https://www.trans-lex.org/128555/_/schelhaas-h-n-het-boetebeding-in-het-europese-contractenrecht-the-penalty-clause-in-european-contract-law-utrecht-2004/" rel="noreferrer">This article</a> discusses penalty clauses in EU law. In the English-Belgian variety, the clause is simply not enforceable. In the Dutch-French and German-Swiss models, such a clause might be enforceable, but the judge can adjust disproportionately high amounts – 250 times the normal price strikes me as disproportionately high. It isn't clear what amount the courts would deem to be reasonable and fair: but the infringer would have to request a reduction in the amount.</p>

software european-union online-piracy