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Customer Use Rights Agreement

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CUSTOMER USE RIGHTS AGREEMENT

This Customer Use Rights Agreement (the "Agreement") is made and entered into as of by and between:

Provider Name:     Provider Address:

Customer Name:     Customer Address:

WHEREAS

WHEREAS, Provider develops and owns rights in certain software, documentation, materials, and services identified in this Agreement and related exhibits (collectively, the "Materials"); and

WHEREAS, Customer desires to obtain, and Provider is willing to grant, a limited right to use the Materials subject to the terms and conditions set forth below.

SCOPE OF WORK AND USE RIGHTS

Provider will provide the Materials and any agreed services described below. Provider hereby grants Customer a non-exclusive, non-transferable, revocable license to use the Materials solely for Customer's internal business purposes in the Territory identified below, subject to the terms of this Agreement.

Territory:     Permitted Users:

PAYMENT TERMS

In consideration for the rights granted herein, Customer shall pay Provider the fees set forth below in accordance with this section. All amounts are stated in U.S. dollars unless otherwise noted.

Late Payment: Payments not received within days after the due date shall incur a late fee equal to per month on the outstanding balance, or the maximum permitted by law, whichever is lower.

TERM AND TERMINATION

Term: This Agreement commences on the Start Date and, unless earlier terminated as provided herein, continues until the End Date.

Start Date:     End Date:

Either party may terminate this Agreement for convenience upon written notice to the other party at least days prior to the effective date of termination. Provider may terminate immediately upon written notice if Customer breaches any material obligation and fails to cure within thirty (30) days after receipt of written notice of such breach.

CONFIDENTIALITY

Each party acknowledges that during performance of this Agreement it may receive Confidential Information of the other party. "Confidential Information" means non-public information disclosed in any form that is marked confidential or that a reasonable person would consider confidential given its nature and the circumstances of disclosure.

The receiving party shall (i) use Confidential Information solely to exercise its rights and perform its obligations under this Agreement, (ii) restrict disclosure to those employees, contractors or agents with a need to know and subject to obligations of confidentiality at least as protective as those herein, and (iii) not disclose or use the Confidential Information for its own benefit or the benefit of any third party. Confidentiality obligations survive termination for a period of years, except that trade secrets shall be protected for as long as they remain trade secrets under applicable law.

LIMITATIONS ON USE

Customer shall not sublicense, distribute, sell, rent, lease, modify, create derivative works of, reverse engineer, decompile or disassemble the Materials, except to the extent such restrictions are expressly prohibited by applicable law. Customer shall comply with all usage, security, and update requirements provided by Provider in writing.

WARRANTIES, LIMITATION OF LIABILITY

Provider warrants that it has the right to grant the license described in this Agreement. EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, THE MATERIALS ARE PROVIDED "AS IS" AND PROVIDER DISCLAIMS ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND NON-INFRINGEMENT TO THE MAXIMUM EXTENT PERMITTED BY LAW.

IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR INDIRECT, INCIDENTAL, SPECIAL, CONSEQUENTIAL OR PUNITIVE DAMAGES ARISING OUT OF OR RELATING TO THIS AGREEMENT, AND PROVIDER'S AGGREGATE LIABILITY FOR ANY CLAIM ARISING OUT OF THIS AGREEMENT SHALL NOT EXCEED THE AMOUNTS PAID BY CUSTOMER TO PROVIDER IN THE TWELVE (12) MONTHS PRECEDING THE EVENT GIVING RISE TO THE CLAIM.

GOVERNING LAW

This Agreement shall be governed by and construed in accordance with the laws of the State of without regard to its conflict of laws principles. The parties submit to the exclusive jurisdiction of the state and federal courts located in that jurisdiction for the resolution of disputes.

NOTICES

All notices required or permitted under this Agreement shall be in writing and delivered to the addresses set forth above or to such other address as a party may designate in writing. Notices shall be deemed given upon delivery if delivered personally, by overnight courier, or three (3) business days after being sent by certified mail.

ENTIRE AGREEMENT

This Agreement, together with any exhibits and referenced addenda executed by the parties, constitutes the entire agreement between the parties with respect to its subject matter and supersedes all prior and contemporaneous agreements, proposals and communications, whether oral or written. Any amendment or modification must be in writing and signed by authorized representatives of both parties.

MISCELLANEOUS

If any provision of this Agreement is held invalid or unenforceable, the remaining provisions shall remain in full force and effect. Neither party may assign its rights or obligations under this Agreement without the prior written consent of the other, except that Provider may assign to an affiliate or in connection with a merger or sale of substantially all of its assets.

Provider (Printed Name):

By:

Date:

Customer (Printed Name):

By:

Date:

Enter text✕

What a Customer Use Rights Agreement Is and When It Applies

A Customer Use Rights Agreement is a bilateral contract that defines permitted uses, restrictions, and ownership rights for products, services, or data provided to a customer. It clarifies licensing scope, end-user obligations, permitted redistribution or modification, and any reporting or audit rights the provider retains. The agreement often includes confidentiality, indemnity, warranty disclaimers, and termination provisions that affect ongoing access. Organizations use this document to set clear operational boundaries, reduce disputes about permitted activity, and document the allocation of intellectual property and data-handling responsibilities between parties.

Why the Customer Use Rights Agreement Matters

This agreement protects both parties by making permitted uses clear, reducing legal ambiguity, and setting parameters for data handling, intellectual property, and termination consequences in a reproducible record.

Why the Customer Use Rights Agreement Matters

Who Typically Uses This Agreement

Use this agreement when you need a clear, enforceable statement of permitted customer activity and related responsibilities.

  • Software vendors and SaaS providers managing user licenses and feature entitlements.
  • IT procurement and vendor management teams negotiating permitted integrations and redistribution rules.
  • Legal and compliance teams ensuring data-handling and IP clauses meet regulatory obligations.

Who Can Sign and What Their Role Is

Authorized Signatory

A corporate officer or delegated representative with authority to bind the company should sign. Verify signature authority in procurement records and document the signer’s title and capacity to avoid later disputes.

Customer Representative

The customer signer should be an individual with contract authority for the purchasing entity; if signing for an individual account, include identity verification details to support attribution.

Security and Compliance Considerations to Include

Encryption: TLS 1.2/1.3 in transit, AES-256 at rest
Audit Trail: Timestamped signing events retained
Certifications: SOC 2 Type II, ISO 27001
Privacy: HIPAA available with BAA
Regulatory: 21 CFR Part 11 support
Accessibility: WCAG 2.0 Level AA

Common Risks and Legal Consequences

Breach Liability: Contract damages and indemnity exposure
Regulatory Penalties: HIPAA or data protection fines
Tax Withholding: Backup withholding for incorrect TINs
Unauthorized Use: Copyright and trade-secret claims
Revocation Risk: Access suspension or termination
Notarization Errors: Challenges to authenticity in court

Frequent Preparation Mistakes to Avoid

  • Using vague license language that fails to specify permitted actions, leading to disputes about modification, sublicensing, or redistribution.
  • Mismatching party names or omitting legal entity designators, which can void or delay enforcement and complicate tax reporting.
  • Failing to include required consumer electronic-consent disclosures when a consumer-facing transaction uses e-signatures.
  • Neglecting signature authority verification or mismatched signer names across supporting documents, increasing risk of rejection.

How Organizations Use Customer Use Rights Agreements in Practice

Real-world examples show how the agreement helps clarify licensing, protect IP, and streamline onboarding across industries.

Real Estate Platform

A SaaS property manager restricts API access to read-only for tenants.

  • The agreement prohibits resale of data outside authorized apps.
  • This reduced third-party disputes and allowed the vendor to enforce tiered pricing without renegotiating core contracts.

Healthcare Vendor

A clinical data provider limits use to treatment and care coordination only.

  • Patient data sharing is conditional on BAA and minimal retention.
  • The arrangement preserved HIPAA compliance while enabling integrations with partner EHR systems under controlled terms.

Step-by-Step: Completing the Agreement

Follow these sequential steps to complete and validate a Customer Use Rights Agreement accurately before execution.

  • 01
    Identify Parties: Enter full legal names and entity types.
  • 02
    Define Scope: Specify permitted uses, restrictions, and territory.
  • 03
    Specify Term: Record effective date and termination events.
  • 04
    Sign and Record: Obtain signatures, notarize if required, and archive.

Typical Execution Workflow

A clear workflow reduces signer friction and documents consent, attribution, and retention for enforceability.

  • Prepare Document: Draft with explicit license and data clauses.
  • Add Fields: Insert signature, date, and initial fields.
  • Authenticate Signers: Use email, SMS, or stronger methods as needed.
  • Capture Audit Trail: Preserve timestamp, IP, and action log.

Essential Clauses to Include in the Agreement

Include concise, enforceable clauses that address scope, data handling, IP, termination, and remedies to reduce ambiguity and litigation risk.

License Grant

Describe allowed actions (use, copy, modify, distribute) precisely, limit sublicensing and define whether the license is exclusive or non-exclusive.

Data Handling

State data processing rules, retention limits, security controls, and whether a BAA or data processing addendum is required for protected health information.

Intellectual Property

Affirm ownership, specify any IP assignment or license-back obligations, and limit reverse-engineering or derivative works where appropriate.

Termination & Remedies

Spell out termination triggers, post-termination data return or deletion obligations, and remedies for breach including injunctive relief or liquidated damages if agreed.

Practical Tips for Drafting and Reviewing

Adopt consistent drafting conventions and review cycles to reduce negotiation time and improve enforceability.

Use Plain Language
Prefer clear, short sentences and defined terms to avoid multiple interpretations in court or arbitration.
Specify Metrics
Include measurable performance or usage limits (API calls, user seats) to prevent disputes over acceptable use.
Align with Privacy
Ensure data clauses reference applicable privacy laws and any required addenda such as a BAA for HIPAA-protected data.
Version Control
Track draft versions, approval dates, and amendment procedures to maintain an auditable trail of contractual changes.

Key Processing Stages and Milestones

Typical milestones from negotiation through archival help teams coordinate legal, procurement, and technical handoffs.

01

Drafting Complete

Legal and product finalize terms and attachments.

02

Internal Approval

Stakeholder sign-off from legal, finance, and security.

03

Signing Window

Send for signatures and confirm authentication.

04

Archival & Enforcement

Store executed copy and implement access controls.

Timing and Deadlines You Should Watch

Certain timing elements affect enforceability and compliance; track dates carefully when executing agreements.

Effective Date:

Enter as MM/DD/YYYY. Determines when obligations start.

Signature Deadlines:

Set a signing window to limit stale approvals and version drift.

Renewal Notice:

Specify notice period for automatic renewals or termination.

Retention Start:

Record when retention obligations begin post-termination.

Amendment Notice:

Include required lead time for contractual amendments.

Additional Clauses and Attachments to Consider

Beyond core terms, include operational exhibits and clauses that clarify implementation, liability, and dispute resolution.

Service Exhibit

Attach measurable service descriptions, SLAs, maintenance windows, and escalation paths to reduce ambiguity in delivery obligations.

Security Appendix

List required controls, encryption standards, incident reporting timelines, and third-party assessment obligations for continuity and audits.

Pricing Schedule

Provide clear pricing, billing cycles, and surcharge rules to avoid billing disputes and ensure accurate financial records.

Export Controls

Include compliance obligations for restricted data and technologies subject to export regulations.

Audit Rights

Define scope, frequency, notice, and cost allocation for provider or customer audits of usage or data handling.

Dispute Resolution

Specify forum, governing law, and whether arbitration or mediation is required before litigation.

How to Amend or Update an Existing Agreement

Follow a controlled amendment workflow to ensure changes are binding and documented.

01

Propose Change:

Describe amendment and rationale in writing.
02

Internal Review:

Legal and stakeholders assess risk and impact.
03

Negotiate Terms:

Agree on new language and effective date.
04

Execute Amendment:

Have authorized signatories sign and date.
05

Distribute Copies:

Share executed amendment with stakeholders.
06

Archive Version:

Store original and amended agreements together.

Digital Signing and eSubmission Options

Choose a platform that preserves a complete audit trail, supports required authentication strength, and provides long-term export options for archiving.

  • Accepted Formats: PDF, DOCX, HTML
  • Integrations: Salesforce, NetSuite, Google Workspace
  • Authentication: Email, SMS, KBA, or stronger methods

Configuring an Online Signing Workflow

Typical workflow settings help you automate routing, authentication, and reminders when executing electronically.

Field Configuration
Signer Order Sequential or parallel routing
Authentication Email, SMS code, or KBA
Reminders Automated resend schedule
Retention Export PDF/A export with audit log

How This Agreement Differs from a License or Master Services Agreement

Compare common document types to choose the correct instrument for rights, obligations, and operational control.

Criteria Customer Use Rights License Agreement
Primary Focus use restrictions license grant scope
Typical Duration operational term perpetual or term-based
Complexity medium high
Attachments operational exhibits full sow and pricing

Vendor Pricing Context for eSignature and Execution

Compare typical vendor offerings for executing agreements electronically; signNow is listed first for direct comparison of core capabilities.

signNow DocuSign Adobe Sign PandaDoc HelloSign
Starting Price $8/user/mo $15/user/mo $14/user/mo $19/user/mo $15/user/mo
Free Trial 7-day free trial Varies by plan Varies by plan Varies by plan Varies by plan
Bulk Send Yes Yes Yes Yes No
Audit Trail Yes Yes Yes Yes Yes
HIPAA Compliant Yes Yes Yes No No
Envelope Cap No cap 100 envelopes/user/year Varies by plan Varies by plan Varies by plan

Common Questions About Customer Use Rights Agreements

Answers to frequent practical and legal questions about e-signatures, notarization, amendments, and recordkeeping.


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