Sample Format of a License Agreement

Narendra Kumar

25 Jun, 2019

Sample Format of a License Agreement In India

License Agreement  When a person grants to another person or to a certain number of persons a right to do or to continue to do in the immovable property of the grantor; that given right is called a LICENSE which would in the absence of such right, be unlawful.

In the license, there is a permission to a person to make use of another’s property without exclusive possession.

Who May Grant The License?

A license may be granted by a person having an interest in the property and only up to the extent in and to which he may transfer his interest.

Is The Grant of License Required To Be Expressed?

The grant of license may be expressed or implied depends upon the conduct of the grantor.

Is The License Transferable?

A license generally carries with it the incident of non-transferability that is a License cannot transfer by the licensee but there is an exception where the license can be transferred.

Is The Instrument Required To Be Registered?

No, the instrument granting the right need not be registered.

Is The Grant of License Also Transfer The Possession And Control In The Property To Licensee?

No, in case of license the owner continues to be in possession and control of the property.

Parties in a license

Licensor:

A person who grants the permission to the person to do or to continue to do in the immovable property of the grantor for a limited period of the term.

Licensee:

A person to whom the easement of enjoying the immovable property has been given by the granter for a certain period of time.

Factors to Be Considered While Drafting a License Agreement

In deciding whether to give out premises on the licensing basis and while drafting a license agreement some of the factors to be considered are as follows:

The identity of the Parties:

• Whether parties to an agreement are individual business entities and if business entities then whether; A Partnership Firm; Limited Liability Partnership or a Company.
• And if the business then who is the signing authority for and on behalf of the entity.
• A letter in which said a person is authorized to execute this agreement for and on behalf of the entity.

Address of the parties:

• A complete address of the parties to the agreement and of the property on which the right is to be transferred or which has to be licensed.
• General Purpose and preliminary matters
• An agreement between the parties who is being licensed to use the named property.
• A complete disclosure about the right which has to be transferred and that the Licensor is and remains the owner of all titles, rights, and interests in the said property.
• A complete disclosure that the rights transferred to the licensee is limited and it is a limited exclusive license.

Breach of limited warranty

• Specific, in case of a breach of the Limited Warranty, what would be the repercussion?
• In case of any damages to the said licensed property who will be accountable for?

Liabilities of the licensor

• Notwithstanding the foregoing, the sensor will not be liable to licensee for any damages, including compensatory, special, incidental, exemplary, punitive, or consequential damages, connected with or resulting from this license agreement.

Term and Termination of Agreement

• How long will the agreement last?
• What are occurrences that can lead to early termination?
• Can either party terminate the relationship without cause?
• Where significant marketing dollars are involved, the parties will want to give the relationship a long enough time to determine whether it will be fruitful. At the same time, if there are ongoing payments required for marketing and advertising, at some point the party responsible for these payments may want to say “enough is enough”
• What obligations do the parties have to each other upon termination?
• Ongoing payments for receivables received after termination?
• Delivery of proprietary information?
• Discontinue using trademarks and other intellectual property?
• Do any provisions (i.e. confidentiality requirements) survive the termination of the agreement? If so, how long do they last?

Indemnification agreement

• What is the indemnification available to the parties in case of any breaches or problems arise?
• What is the procedure that required to obtain indemnification?
• Is there a cap on or exclusions from indemnification?

Arbitration clause

 What is the remedy available to the parties in case of any dispute arises between the parties in respect to the agreement and clauses therein?

• How are disputes to be handled – litigation, mediation or arbitration?
• If arbitration, what rules will govern?
• If arbitration, how many arbitrators and how will they be picked?
• If arbitration, will there be procedures for discovery and what the arbitrator can and can’t do?
• If litigation, where can or must the litigation be brought?

Transfer of Right

• Classify if either party to the contract can transfer the contract, in what partial, or in part, to another party, and under what conditions (if any).

Severability

• If any part or part of this agreement becomes unenforceable for any reason, the rest agreement shall be continued in full force and effect.

Notice

• Describes how and where the parties shall formally communicate to each other in the event they need to take such action (e.g., all notices shall be deemed to have been received by the other party within five working days if sent by regular mail to the addresses below).

Termination

• Licensor has the right to terminate this Agreement and Licensee’s right to use the licensed property upon any material breach by Licensee.

Force majeure (An act done by God)

• If an Event of Force Majeure results in a loss or damage to the licensed property then who shall rectify such loss or damage to the extent required by the licensee to reuse the property in the same manner as before.

Expiration

• On the expiration of the agreement or the earlier termination of the agreement as the case may be, the Licensee shall restore the peaceful possession of the licensed premises to the Licensor in the good condition as they are in present subject to normal wear and tear and damage by force majeure. The Licensee’s occupation of the premises after such termination will be deemed to be that of a trespasser.