License terms clause: Copy, customize, and use instantly
Introduction
A license terms clause sets out the conditions under which one party is granted rights to use software, content, intellectual property, or other assets. It helps define the scope, duration, limitations, and permitted use of the licensed materials, ensuring clarity and reducing disputes over usage rights.
Below are templates for license terms clauses tailored to different scenarios. Copy, customize, and insert them into your agreement.
Standard license terms clause
This version outlines general scope and use rights.
The [Customer] is granted a non-exclusive, non-transferable, limited license to use the [Product/Software/Service] solely for internal business purposes during the term of this Agreement, subject to the restrictions set out herein.
License terms clause with usage restrictions
This version limits how the license may be used.
The [Customer] shall not sublicense, resell, modify, reverse engineer, or distribute the licensed materials except as expressly permitted under this Agreement.
License terms clause with territory limitation
This version restricts use by region.
The license granted under this Agreement is limited to use within [Territory/Country] and may not be accessed or deployed outside that jurisdiction without prior written consent.
License terms clause with termination on breach
This version sets clear revocation terms.
The license granted herein shall immediately terminate upon any material breach of this Agreement by the [Customer], without the need for further notice or action by the [Provider].
License terms clause with perpetual license grant
This version provides indefinite usage rights.
The [Customer] is granted a perpetual, non-exclusive license to use the licensed materials for internal business purposes, subject to the terms of this Agreement.
License terms clause with license renewal mechanism
This version allows term extensions.
The license granted under this Agreement shall automatically renew for successive one-year terms unless either party provides written notice of non-renewal at least [30 days] prior to the end of the current term.
License terms clause with sublicensing prohibition
This version restricts further distribution.
The [Customer] shall not sublicense the licensed materials to any third party without the prior written consent of the [Provider].
License terms clause with usage tracking requirement
This version mandates usage logs.
The [Customer] shall maintain accurate records of its use of the licensed materials and shall provide such records upon reasonable request by the [Provider].
License terms clause with seat-based limitations
This version sets user caps.
The license granted under this Agreement is limited to use by up to [X] authorized users. Additional users require a separate license and may incur additional fees.
License terms clause with cloud deployment restriction
This version limits hosting environments.
The licensed materials may not be hosted, deployed, or used in a public cloud environment unless expressly permitted by the [Provider].
License terms clause with academic or non-commercial use limitation
This version restricts commercial exploitation.
The license is granted solely for academic or non-commercial use and may not be used to generate revenue, directly or indirectly, without the [Provider]’s written consent.
License terms clause with audit rights
This version enables license compliance review.
The [Provider] shall have the right to audit the [Customer]’s use of the licensed materials once per year with at least [10 business days’] notice.
License terms clause with transferability restriction
This version blocks assignment.
The license granted under this Agreement is non-transferable and may not be assigned to another entity without the prior written consent of the [Provider].
License terms clause with license fee refund disclaimer
This version clarifies refund rights.
In the event of license termination, the [Customer] shall not be entitled to a refund of any license fees paid prior to termination.
License terms clause with royalty-bearing model
This version ties use to payments.
The license is granted on a royalty-bearing basis, and the [Customer] shall pay [X]% of gross revenues derived from the use of the licensed materials.
License terms clause with usage limitation by industry
This version narrows permissible sectors.
The licensed materials may only be used in connection with [Industry/Field] and shall not be used for any other purpose without written approval from the [Provider].
License terms clause with limited functionality license
This version restricts feature access.
The [Customer] is granted a license to use only the basic functionality of the software. Access to premium features requires an additional license agreement.
License terms clause with multi-device limitation
This version restricts installations.
The license allows installation on up to [X] devices owned or operated by the [Customer], with no simultaneous use across more than [Y] devices.
License terms clause with support service dependency
This version ties use to support coverage.
Continued access to the licensed materials is contingent on the [Customer] maintaining an active support and maintenance subscription with the [Provider].
License terms clause with open-source component disclosure
This version adds transparency.
The license includes access to certain open-source components, which are provided under their respective license terms and are separately identified in [Schedule X].
License terms clause with revocation for misuse
This version protects against improper behavior.
The license may be revoked immediately if the [Customer] uses the licensed materials in a manner deemed unlawful, unethical, or abusive.
License terms clause with derivative work prohibition
This version limits adaptations.
The [Customer] shall not create, distribute, or publish derivative works based on the licensed materials without the [Provider]’s prior written consent.
License terms clause with source code exclusion
This version limits access level.
The license covers only the compiled object code and excludes access to the underlying source code, unless separately licensed.
License terms clause with usage by affiliates restriction
This version narrows internal use.
The license does not extend to affiliates, subsidiaries, or related entities of the [Customer] unless expressly authorized in writing by the [Provider].
License terms clause with co-branding limitations
This version governs brand use.
The licensed materials may not be modified, rebranded, or distributed under the [Customer]’s name or branding unless explicitly permitted by the [Provider].
License terms clause with high-availability use prohibition
This version restricts critical deployment.
The licensed materials may not be used in mission-critical or high-availability environments without specific written authorization from the [Provider].
License terms clause with sandbox-only use limitation
This version restricts environments.
The license grants use of the materials solely in sandbox or test environments and does not authorize production deployment.
License terms clause with bundling restriction
This version blocks resale bundling.
The licensed materials may not be bundled, integrated, or sold in conjunction with other products or services without written approval.
License terms clause with express reservation of rights
This version protects the licensor’s IP.
All rights not expressly granted to the [Customer] under this Agreement are reserved by the [Provider].
License terms clause with third-party hosting restriction
This version limits control.
The [Customer] may not host or make the licensed materials available through any third-party service provider unless authorized in writing.
License terms clause with disaster recovery usage right
This version covers emergency use.
The [Customer] is permitted to use the licensed materials in a disaster recovery environment, provided such use is temporary and limited to emergency scenarios.
License terms clause with license suspension for non-payment
This version protects against default.
The license may be suspended by the [Provider] upon the [Customer]’s failure to pay license fees within [X days] of the due date.
License terms clause with trial license provision
This version governs time-limited use.
The [Customer] is granted a non-renewable, time-limited license to evaluate the licensed materials for [30 days], after which continued use requires a paid license.
License terms clause with usage metric reporting
This version supports usage-based billing.
The [Customer] shall submit monthly usage metrics to the [Provider] to enable accurate calculation of usage-based license fees.
License terms clause with mandatory license renewal audit
This version enforces true-up.
At the end of each license term, the [Customer] shall participate in a license audit to determine whether additional fees are owed for expanded use.
License terms clause with geographic deployment cap
This version limits server locations.
The license permits deployment of the licensed materials on servers physically located only in [Geographic Area].
License terms clause with license escalation clause
This version accounts for increased usage.
If the [Customer] exceeds license limits, it shall upgrade to the appropriate license tier and pay any additional fees incurred.
License terms clause with fallback license option
This version provides continuity.
In the event of termination or expiry, the [Customer] may continue using the materials under a limited fallback license for archival purposes only.
License terms clause with maintenance dependency disclaimer
This version separates support and license.
The license grant is independent of support services, and termination of support shall not affect the underlying license rights.
License terms clause with annual usage verification obligation
This version enforces compliance.
The [Customer] shall submit an annual certification confirming that its use of the licensed materials remains within agreed limits.
License terms clause with no implied license clause
This version avoids assumptions.
Nothing in this Agreement shall be construed to grant the [Customer] any license or rights by implication, estoppel, or otherwise beyond those expressly stated.
License terms clause with service-specific license limitation
This version restricts application use.
The license is granted solely for use in connection with the [Service Name] and may not be applied to any other service or platform.
License terms clause with legacy license conversion clause
This version supports migration.
Any pre-existing license held by the [Customer] for older versions shall be converted into a new license subject to the terms of this Agreement.
License terms clause with inactive account license revocation
This version enforces usage continuity.
Licenses associated with accounts inactive for more than [90 days] may be revoked by the [Provider] upon notice.
License terms clause with embedded use prohibition
This version restricts system integration.
The [Customer] shall not embed the licensed materials into hardware or firmware systems without a separate OEM license.
License terms clause with monthly license reconciliation clause
This version ensures usage alignment.
The parties shall conduct a monthly reconciliation of license usage and adjust license counts and fees accordingly.
License terms clause with IP ownership disclaimer
This version separates rights.
The license grant does not confer any ownership rights in the licensed materials to the [Customer].
License terms clause with contractor use provision
This version extends access with limits.
The [Customer] may permit use of the licensed materials by its contractors solely for internal project purposes, provided they comply with license terms.
License terms clause with transfer on merger condition
This version governs business transitions.
In the event of merger or acquisition, license transfer shall be subject to the [Provider]’s prior written approval.
License terms clause with archival copy allowance
This version permits backups.
The [Customer] may make a single archival copy of the licensed materials solely for backup and disaster recovery purposes.
License terms clause with license use monitoring by provider
This version allows oversight.
The [Provider] reserves the right to monitor the [Customer]’s use of the licensed materials for the sole purpose of ensuring compliance with this Agreement.
License terms clause with named-user restriction
This version limits use to specific individuals.
The license granted under this Agreement is limited to use by specifically named users designated by the [Customer], and may not be shared among multiple individuals.
License terms clause with development-only environment limitation
This version restricts use cases.
The [Customer] may only use the licensed materials in development and testing environments. Production use requires a separate commercial license.
License terms clause with license scope reaffirmation clause
This version reasserts license boundaries.
The [Customer] acknowledges that use of the licensed materials is strictly limited to the scope outlined in this Agreement and may not be extended without written approval.
License terms clause with post-term license downgrade
This version changes license terms after expiry.
Upon expiration of the Agreement, the [Customer] may retain access to the licensed materials under a downgraded read-only license, unless otherwise agreed.
License terms clause with duration-based feature unlock
This version stages access over time.
Certain features of the licensed materials may only be accessed after specific durations of continuous licensed use, as outlined in [Schedule X].
License terms clause with floating license option
This version supports flexible user allocation.
The [Provider] may offer floating licenses that allow access by any authorized user on a non-simultaneous basis, subject to a maximum concurrency cap.
License terms clause with license compliance self-attestation
This version supports internal verification.
The [Customer] shall submit a signed statement annually certifying that its use of the licensed materials remains within the terms of this Agreement.
License terms clause with defined non-production license scope
This version distinguishes use tiers.
The [Customer] is granted a non-production license that permits use solely for training, quality assurance, or sandbox testing purposes.
License terms clause with onboarding period license extension
This version provides ramp-up flexibility.
During the initial [30-day] onboarding period, the [Customer] may temporarily exceed license limits, provided usage is normalized by day [31].
License terms clause with upgrade-triggered license conversion
This version ties upgrades to license changes.
Upgrades to newer versions of the licensed materials shall automatically convert the license into the then-current standard license model.
License terms clause with license use across subsidiaries
This version broadens permitted use.
The [Customer] may extend the license to its wholly owned subsidiaries, provided all entities comply with the terms of this Agreement.
License terms clause with proprietary and third-party licensing distinction
This version separates responsibilities.
The license granted under this Agreement applies only to proprietary materials provided by the [Provider]; third-party components are subject to separate terms.
License terms clause with early termination license wind-down period
This version softens transition.
Upon early termination, the [Customer] may continue using the licensed materials for a [30-day] wind-down period solely to complete in-progress work.
License terms clause with white-label use prohibition
This version limits branding rights.
The licensed materials may not be rebranded, white-labeled, or presented as products of the [Customer] without explicit written permission from the [Provider].
License terms clause with concurrent user cap
This version limits simultaneous usage.
The license permits a maximum of [X] concurrent users accessing the licensed materials at any given time, regardless of total users registered.
License terms clause with escalation for misuse discovery
This version outlines compliance enforcement.
If the [Provider] discovers misuse of the licensed materials, the issue shall be escalated to the [Customer] within [5 business days] for resolution.
License terms clause with license termination survival clause
This version defines post-termination terms.
Certain rights and obligations related to the licensed materials, including confidentiality and usage restrictions, shall survive termination of the Agreement.
License terms clause with tiered pricing per use case
This version differentiates pricing by application.
License fees shall vary based on use case—production, staging, testing, or analytics—according to the pricing tiers outlined in [Schedule Y].
License terms clause with integration limitation
This version governs how software may be combined.
The licensed materials may not be integrated with external systems or APIs not approved by the [Provider].
License terms clause with authorized reseller restriction
This version manages distribution channels.
The [Customer] may only purchase licenses from the [Provider] or its authorized resellers, as listed in [Schedule Z].
License terms clause with pre-agreed end-user license agreement (EULA) incorporation
This version binds internal users.
All internal users of the licensed materials must accept and adhere to the end-user license agreement (EULA) provided by the [Provider].
License terms clause with content output licensing clarification
This version governs derivative content.
Any content produced using the licensed materials shall remain the property of the [Customer], but the [Provider] retains rights to the underlying tools.
License terms clause with mandatory license reconciliation trigger
This version initiates usage checks.
The [Customer] must initiate a license reconciliation process if usage increases by more than [25%] compared to the previous quarter.
License terms clause with license freeze upon dispute
This version pauses access.
In the event of a contractual dispute, the [Provider] may temporarily suspend license usage rights until the dispute is resolved.
License terms clause with license reactivation fee
This version sets financial penalties.
If the license is suspended due to breach or non-payment, a reactivation fee of [$X] shall apply before reinstatement.
License terms clause with geographic export restriction
This version addresses regulatory compliance.
The licensed materials may not be exported or used in jurisdictions subject to sanctions or export controls under applicable law.
License terms clause with time-based access window
This version enforces usage windows.
The license allows access to the licensed materials only during the business hours of [9am–6pm, Monday to Friday], unless otherwise agreed.
License terms clause with capped data processing license
This version limits system usage volume.
The [Customer] may process up to [X GB/month] of data using the licensed materials. Additional processing requires a license upgrade.
License terms clause with license key rotation protocol
This version secures access.
License keys shall be rotated by the [Provider] every [90 days], and the [Customer] shall implement key update procedures accordingly.
License terms clause with license use notification requirement
This version mandates proactive updates.
The [Customer] shall notify the [Provider] in writing if license use is expanded to new departments, geographies, or business units.
License terms clause with inactivity auto-revocation
This version maintains active usage.
Licenses not used for a continuous period of [120 days] may be automatically revoked unless a waiver is granted.
License terms clause with license inheritance clause
This version addresses organizational changes.
In the event of business restructuring, the license may be inherited by a legal successor entity subject to prior approval by the [Provider].
License terms clause with payment milestone-linked access
This version ties license activation to payments.
The license shall only become active upon receipt of the first payment milestone outlined in the payment schedule.
License terms clause with audit-triggered license revision
This version allows updates post-audit.
If an audit reveals under-licensing, the [Customer] agrees to promptly acquire additional licenses and pay associated fees retroactively.
License terms clause with license use reporting cadence
This version structures reporting.
The [Customer] shall provide usage reports on a [quarterly/monthly] basis detailing license utilization across teams or departments.
License terms clause with system limitation notification obligation
This version ensures transparency.
The [Provider] shall notify the [Customer] of any known limitations in the licensed materials that may impact use or compatibility.
License terms clause with license rights disclaimer for third-party modules
This version separates IP layers.
The license does not extend to third-party modules integrated by the [Customer]; such modules must be separately licensed from their respective owners.
License terms clause with perpetual archive-only license upon expiration
This version governs legacy access.
Upon expiration, the [Customer] may retain a perpetual, non-commercial, archive-only license for internal recordkeeping purposes.
License terms clause with reallocation rights between teams
This version supports internal flexibility.
The [Customer] may reassign unused licenses between departments provided license limits are not exceeded.
License terms clause with in-app use-only restriction
This version limits functionality.
The licensed materials may only be used within the designated software application and may not be extracted or repurposed outside that context.
License terms clause with license activation grace period
This version supports administrative delays.
The [Customer] shall have a [7-day] grace period following contract execution to activate license keys without penalty.
License terms clause with dynamic pricing adjustment based on usage
This version enables variable pricing.
License fees may be dynamically adjusted on a quarterly basis depending on actual usage volumes as reported by the [Customer].
License terms clause with limited-time promotional license
This version governs time-boxed offers.
The [Customer] is granted a discounted license for a promotional period of [X days], after which standard pricing shall apply.
License terms clause with no retroactive license credit clause
This version prevents back-crediting.
The [Customer] shall not be entitled to retroactive credits for unused licenses during any prior billing cycle.
License terms clause with compliance certificate requirement
This version formalizes reporting.
The [Customer] shall issue an annual certificate of compliance signed by an authorized officer confirming adherence to license terms.
License terms clause with limited license for external partners
This version governs third-party access.
The [Customer] may provide limited, time-bound access to the licensed materials to external consultants or partners under a temporary use license.
License terms clause with license attribution requirement
This version supports branding control.
The [Customer] shall not remove or obscure any license notices or branding from the licensed materials without written permission.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.