You agree to be legally bound by the Terms and Conditions of the EULA whenever you hit "I agree" to continue with the installation of Morrowind. You're free to click "Cancel" if you disagree. At such time you are required by law to return the entire game and the contents of your box or CD case, in the original packaging, to the store from which you bought it.
And what if I don't hit "I agree," and instead download MWEdit and use that to create my mod? I am bound by no EULA at that point since I did not agree to it. The only thing I personally am using of Bethesda's is the file format; and while the name of a format or the extension can be a trademark, a format itself cannot be copyrighted nor patented. Otherwise every gif ever created would be owned by CompuServ.
"Mods and resources made using other tools (ie textures, 3d models, and 3rd party scripts) are not subject to the aforementioned EULAs. Ownership of such resources remains with the original author."
FYI: this is not Betheda's position.
Pete Hines stated to me in 2003 that Bethesda controls the rights to anything made for their games regardless what software is used to create it. This includes meshes made using Blender, textures made using Photoshop, scripts made using Notepad, etc. Pete confirmed this position to Ronin49 in 2004. GStaff confirmed it a third time in a thread about intellectual property rights and modding in 2006.
From US copyright code:
The copyright in a compilation or derivative work extends only to the material contributed by the author of such work, as distinguished from the preexisting material employed in the work, and does not imply any exclusive right in the preexisting material. The copyright in such work is independent of, and does not affect or enlarge the scope, duration, ownership, or subsistence of, any copyright protection in the preexisting material.
The copyrights of derivative work and the original work are entirely separate. Anyone from Bethesda stating that even without the agreement of an EULA they own works that have anything to do with their game is simply false. If it was so simple as stating publicly that in your view you own something made by somebody else, there would be no purpose for an EULA, let alone a copyright. I mean, what if Microsoft suddenly came out and said that anything ever written in Word was owned by them? Or if Google stated that any content you find through their search engine becomes their property? These are exactly the reasons we have copyrights, to protect ALL parties.
Now please understand me here: I am not trying to undermine Bethesda's implied authority over the modding community, nor harm their position financially in any way. I just want everyone to know the facts as they pertain to copyright law. Before I was involved in modding, I cared not one whit about copyright law, I had no need. And I certainly didn't ever think that I would need it for releasing mods. But I have since realized just how important protecting my legacy is to me.
So let me state this here: I adore Bethesda and appreciate everything they have given us. And in turn, I know for a fact that I have contributed to their bottom line by adding content to their game that drives others to purchase it. It is a symbiotic relationship, and the moment one party demands more than what they own, the relationship can easily be severed.
Now here is my argument in favor of their point of view.
I freely acknowledge that anything I create using their Construction Set belongs to them; though I usually only use it for world-building, NPC/creature creation, and dialogue. Everything else I tend to do with MWEdit or Enchanted Editor.
However, I use the game they created to test all of my mods very thoroughly. So while there is nothing in their EULA about that, I personally see no difference between that and using the CS. So I personally believe that they do, in fact, hold ownership of my mods to a degree. And they are of course able and welcome to use
my intellectual resources in their games (black soul gems anyone?)