I guess in that case they would just break the license rather than complying with the "penalty" clause. As in "we never agreed to this license, we just used the

I guess in that case they would just break the license rather than complying with the "penalty" clause. As in "we never agreed to this license, we just used the source illegally. So sue us for that." - and if they are sued, settle for a million or so, peanuts. Now, I don't know if there is any provision in US law that makes you automatically enter a binding contract if you use code that is accompanied by a license file. It is certainly possible, as you demonstrate intent to enter the agreement. But OTOH, this would be too easy to abuse. Just sneakily replace the LICENSE.txt and add "you agree to pay 50% of your income and your firstborn child"... I don't think many would catch that. We say "this code is under this license", but actually beneath the hood this means "this code is available for license under these terms". (In Germany at least the hurdle to enter a contract is rather high. For a time, you were able to get on a bus without paying, and if caught argue that you never agreed to the terms of the bus company... so they had to make a special law against fraudently leeching services.)