A license agreement template is basically a legal document in which the licensor grants the licensee the permission to do a certain activity or show ownership over something for a limited period by paying a specific amount of money for it or its fee. It is broadly used by car companies, property owners, and businessmen. The basic point of using a license agreement is to commit all the terms and conditions, payment methods, amounts on paper. The licensor basically provides this license agreement to the buyer, with all the specifications about the product in view. The licensee then uses a license agreement as legal paper to show ownership over the said product for the time period mentioned in this agreement. License agreements are mostly used by the licensor to gain money from something that already belongs to them. It is an efficient way of making money. At the same time, the licensee uses the product for his own benefit by paying for it.
Elements of a License Agreement
A license agreement template is composed of the following elements:
1. The name of the company of licensor as well as their contact information.
2. The date on which the license agreement is being activated.
3. The name of the licensor along with their general information.
4. The specifications of the product or property to which the licensee will be granted permission to.
5. The amount of down payment required at the time of the license signing.
6. (If) installments are allowed, then the time period after which each installment has to be paid and the exact date.
7. The method of payment will be adopted throughout the deal.
8. The specific time period till which the license is valid.
9. Consequences that the licensee will have to face as a result of usage of their property after the expiration date. Which generally includes an amount of fine to be paid.
10. Lastly, the signature of the licensor. This is the most crucial step as it signifies that the licensor has personally granted you permission to their property.
Benefits of a License Agreement
A license agreement template helps both the parties involved in the process in multiple ways:
• The licensor can benefit from this monetarily, meaning they can gain profit from the money received by the licensee, which can help them expand their business and explore new and foreign business grounds. For example, they can expand their business in a new country.
• The licensee gets the advantage of using a licensed property and not have to personally buy it. This saves them a lot of money if they are just planning to use the product for a specific time period.
• The licensee can use the license agreement as legal document as a proof in case any legal authority questions them about their ownership over the product. For example, if you are using a licensed car and get pulled over by the police, you can show the license agreement with the current owner of the car.
Templates for License Agreement
Source: www.shawnee.edu