TERM
DEFINITION
Term is the period of time for which a license or contract remains in effect, after which rights typically revert to the owner or the agreement must be renewed.
WHAT IT MEANS IN PRACTICE
A fixed term license expires automatically on a set date, while some licenses run until terminated by either party or, less favourably for the maker, run in perpetuity with no end date at all.
Term interacts directly with exclusivity and territory: a short exclusive term can be reasonable, while a long or perpetual exclusive term can permanently box a maker out of their own work in that market.
Renewal clauses deserve close attention, since automatic renewal on the same terms can quietly extend a deal a maker meant to end, particularly if the notice window to cancel is short and easy to miss.
AN EXAMPLE
Dev licenses a jingle to an ad agency for a two-year term. When the term ends without renewal, the agency must stop using the jingle or negotiate a new license, and Dev is free to license it elsewhere.
WATCH OUT
A perpetual license with no term at all can function like a permanent transfer of rights even though it was never called an assignment.
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