Establishing secure connection…Loading editor…Preparing document…

Usage License Agreement

This template is fully customizable. Edit the text, fill out the fields, and send it for signature. Give it a try!

USAGE LICENSE AGREEMENT

This Usage License Agreement ("Agreement") is made and entered into as of Effective Date: by and between Licensor Name: with principal place of business at Licensor Address: and Licensee Name: with principal place of business at Licensee Address: .

RECITALS

WHEREAS, Licensor has developed or owns rights in certain materials, content, software and associated documentation identified herein and described in detail as the Licensed Material; and

WHEREAS, Licensee desires to obtain, and Licensor is willing to grant, a limited license to use the Licensed Material on the terms and conditions set forth in this Agreement.

WHEREAS, the parties intend by this Agreement to set forth the full and complete terms governing such use.

NOW, THEREFORE

In consideration of the mutual covenants and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the parties agree as follows:

1. DEFINITIONS

For purposes of this Agreement, the following terms shall have the meanings set forth below:

"Licensed Material" means the works, software, code, designs, documentation, data, and other materials described as follows:

"Territory" means:

"Permitted Use" means Licensee's right to use the Licensed Material as described in Section 2 below and in any attachments or exhibits executed by the parties.

2. GRANT OF LICENSE

Subject to the terms and conditions of this Agreement, Licensor hereby grants to Licensee a non-transferable license to use the Licensed Material for the Permitted Use in the Territory for the Term set forth in Section 5. Select license type:

Non-Exclusive Exclusive

The license includes the right to make internal copies and use the Licensed Material solely for the Permitted Use. Licensee shall not have the right to sublicense, transfer, assign or otherwise encumber the rights granted herein except as expressly permitted by Licensor in writing.

3. RESTRICTIONS

Licensee shall not, and shall not permit any third party to: (a) modify, adapt, translate, reverse engineer, decompile, disassemble, or otherwise attempt to derive source code from the Licensed Material except to the extent permitted by applicable law; (b) remove or alter any proprietary notices or markings on the Licensed Material; (c) use the Licensed Material for any unlawful purpose or in any manner that violates third-party rights; or (d) distribute, sell, lease, rent, or otherwise exploit the Licensed Material except as expressly authorized in this Agreement.

4. CONSIDERATION

In consideration for the license granted hereby, Licensee shall pay Licensor the fees set forth below in accordance with the payment terms:

5. TERM AND TERMINATION

The Term of this Agreement shall commence on the Effective Date and continue for a period of unless earlier terminated as provided herein. Either party may terminate this Agreement upon written notice if the other party materially breaches this Agreement and fails to cure such breach within thirty (30) days after receipt of written notice specifying the breach.

Upon termination or expiration, Licensee shall cease all use of the Licensed Material, return or destroy copies as directed by Licensor, and certify in writing that all such materials have been returned or destroyed.

6. OWNERSHIP

Licensor retains all right, title and interest in and to the Licensed Material, including all intellectual property rights. Except for the limited license expressly granted herein, no ownership rights are transferred to Licensee. Any enhancements, modifications or derivative works made by Licensee shall be deemed Licensed Material and owned by Licensor unless otherwise agreed in writing.

7. CONFIDENTIALITY

Each party agrees to maintain in confidence all non-public information disclosed by the other party that is marked confidential or that reasonably should be understood to be confidential given the nature of the information and the circumstances of disclosure ("Confidential Information"). Confidential Information shall not include information that is demonstrably in the public domain, independently developed without use of the other party's Confidential Information, or rightfully received from a third party without restriction.

8. WARRANTIES; DISCLAIMER

Licensor warrants that it has the right to grant the license granted herein. EXCEPT FOR THE FOREGOING, THE LICENSED MATERIAL IS PROVIDED "AS IS" AND LICENSOR DISCLAIMS ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NONINFRINGEMENT, OR ARISING FROM COURSE OF DEALING OR USAGE OF TRADE.

9. INDEMNIFICATION

Licensee shall indemnify, defend and hold harmless Licensor and its officers, directors and employees from and against any and all claims, losses, liabilities, damages, costs and expenses (including reasonable attorneys' fees) arising out of Licensee's use of the Licensed Material in breach of this Agreement, infringement claims attributable to Licensee's use, or Licensee's negligence or willful misconduct.

10. LIMITATION OF LIABILITY

IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL OR PUNITIVE DAMAGES, OR FOR LOSS OF PROFITS, REVENUE OR DATA, ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. LICENSOR'S AGGREGATE LIABILITY UNDER THIS AGREEMENT SHALL NOT EXCEED THE AMOUNTS PAID BY LICENSEE TO LICENSOR UNDER THIS AGREEMENT IN THE TWELVE (12) MONTHS PRECEDING THE CLAIM.

11. NOTICES

All notices, requests, demands and other communications under this Agreement shall be in writing and shall be delivered to the addresses set forth below by personal delivery, nationally recognized overnight courier, certified mail (return receipt requested), or by email with confirmation of receipt where email address is provided.

12. ASSIGNMENT

Neither party may assign this Agreement or its rights hereunder without the prior written consent of the other party, except that Licensor may assign this Agreement in connection with a merger, acquisition or sale of substantially all of its assets provided that the assignee assumes Licensor's obligations hereunder.

13. AMENDMENTS; WAIVER

No amendment, modification or waiver of any provision of this Agreement shall be effective unless in writing and signed by authorized representatives of both parties. The waiver by either party of a breach or default shall not constitute a waiver of any subsequent breach or default.

14. GOVERNING LAW

This Agreement shall be governed by and construed in accordance with the laws of: without regard to its conflicts of law principles. The parties submit to the exclusive jurisdiction of the courts located in that jurisdiction for disputes arising out of this Agreement.

15. ENTIRE AGREEMENT

This Agreement, together with any exhibits or schedules hereto, constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, proposals and communications, whether oral or written.

16. SEVERABILITY

If any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect, such provision shall be reformed only to the extent necessary to make it enforceable, and the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired.

17. COUNTERPARTS; ELECTRONIC SIGNATURES

This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one agreement. Signatures delivered by electronic means (including PDF or other electronic signature technologies) shall be effective to bind the parties.

Licensor (Print Name):

By:

Date:

Licensee (Print Name):

By:

Date:

Enter text✕

What a Usage License Agreement Covers

A Usage License Agreement defines the rights and limits under which one party licenses intellectual property, software, content, or other proprietary material to another party. It typically addresses the license grant, scope (permitted uses and territory), term and renewal, fees or royalties, restrictions on use, confidentiality, warranty disclaimers, indemnities, and termination mechanics. The agreement can also specify sublicensing, assignment rules, support or maintenance obligations, and dispute resolution. For electronic execution across state lines, parties commonly rely on the ESIGN Act (15 U.S.C. ch. 96, 2000) and state UETA statutes (1999) to support enforceability.

Why a Clear License Agreement Matters

A precise Usage License Agreement reduces commercial and legal uncertainty, protects intellectual property rights, sets payment expectations, and allocates risk between licensor and licensee. It also documents permissions and limits that reduce litigation risk and support enforcement when signed electronically under ESIGN or state UETA law.

Why a Clear License Agreement Matters

Who Commonly Prepares and Signs These Agreements

Typical users include corporate counsel, licensing managers, product teams, and independent creators who control software or content rights.

  • Real estate brokerages licensing listing-management software and marketing content across agents and offices.
  • Healthcare providers licensing patient-management software; workflows often require HIPAA addenda and BAAs.
  • Financial services and legal firms licensing proprietary software, research, or document templates for regulated workflows.

Licensees range from enterprises deploying licensed technology to small businesses and freelancers who need clear usage boundaries, billing terms, and termination procedures.

Core Sections to Include in a Professional Agreement

A well-drafted Usage License Agreement organizes key topics so rights and obligations are unambiguous: the grant, permitted uses, territory, technical limitations, payment, term and renewal, confidentiality, disclaimers, indemnity, and ownership.

License Grant

Specify exclusivity, scope, formats, and whether sublicensing or distribution is permitted; tie the grant to specific versions, modules, or releases to avoid ambiguity in deliverables and upgrades.

Scope & Territory

Define permitted uses (internal, commercial, resale), geographic limits, device or user caps, and any technical restrictions such as API call limits or concurrent user counts.

Payment & Royalties

Detail fees, payment timing, invoicing, taxes, audit rights for royalty calculations, late-payment remedies, and whether minimum guarantees or usage thresholds apply.

Term & Renewal

State the effective date, fixed term or perpetual nature, automatic renewal mechanics, notice windows for non-renewal, and early-termination consequences including post-termination access.

Restrictions & Sublicensing

List prohibited actions such as reverse engineering, unauthorized distribution, or use for unlawful purposes; specify whether the licensee may subcontract or sublicense rights and under what conditions.

IP Ownership

Declare that the licensor retains copyright and other IP rights, describe any assignment mechanics, and allocate ownership of derivative works or feedback-driven improvements.

Essential Fields to Include

Licensor Name: Full legal entity name
Licensee Name: Full legal entity name
Effective Date: MM/DD/YYYY format
Term Length: Duration in months or years
Licensed Materials: Clear description or exhibit
Payment Terms: Amount, frequency, net period

Step-by-Step: Complete a Usage License Agreement

Follow these steps to prepare and finalize a Usage License Agreement that is clear, enforceable, and suitable for electronic signing.

  • 01
    Draft Terms: Collect IP descriptions, define scope, and set fees clearly.
  • 02
    Allocate Risk: Include confidentiality, warranties, indemnities, and limitation of liability clauses.
  • 03
    Review State Law: Confirm governing law and any statutory signature requirements.
  • 04
    Execute Electronically: Use a compliant eSignature process and keep a retention copy.

How to Set Up an Online License Workflow

Configure a digital template and signer workflow to reduce manual errors and streamline repeated license processes.

Field Configuration
Template Naming Consistent naming for version control
Conditional Fields Show or hide fields by license type
Authentication Level Email, SMS OTP, or KBA as needed
Automated Reminders Set reminders and expiration alerts

Where to Send and How to Route Signatures

Decide routing order and distribution to ensure each party receives and retains the signed agreement.

  • Primary Signing: Send to licensee for initial signature
  • Counterparty Sign: Licensor countersigns after licensee execution
  • Record Copies: Distribute signed PDF and audit certificate
  • Optional Recording: Record assignment with USPTO when required

Technical and Security Considerations for eExecution

Choose a platform that supports standard document formats, strong transport encryption, and comprehensive audit trails for legal defensibility.

  • File Formats: PDF, DOCX, and editable templates
  • Integration: CRM and cloud storage connectors
  • Encryption: TLS 1.2/1.3 and AES-256

Ensure the vendor can provide SOC 2 or ISO 27001 documentation, a HIPAA BAA if needed, and support for advanced authentication when higher identity assurance is required.

Common Timeframes and Deadlines to Track

Standard timelines in a Usage License Agreement help both parties manage obligations and avoid inadvertent breaches.

Effective Date:

Date when rights and obligations begin

Payment Due:

Typically net 30 days from invoice

Termination Notice:

Commonly 30 to 90 days written notice

Renewal Notice:

Often 60 days prior to term end

Deliverable Acceptance:

Review window, commonly 15 business days

Key Milestones in License Lifecycle

Track these sequential milestones from negotiation through renewal to ensure obligations are met and records retained.

01

Negotiation Complete

Final draft approved by legal and business teams

02

Execution

All parties sign and copies are distributed

03

Go-Live

Licensee begins permitted use and payment schedule

04

Renewal Review

Assess performance and renegotiate prior to renewal

Common Mistakes to Avoid When Preparing a License

  • Using vague descriptions of licensed materials that create disputes about what is covered or excluded under the license.
  • Failing to define geographic or technical limits, which can unintentionally grant broader rights than intended.
  • Omitting clear payment mechanics, audit rights, or remedies for nonpayment, complicating royalty enforcement and accounting.
  • Overlooking termination effects, such as rights to continued use, escrow provisions, or post-termination migration support.

Potential Consequences of an Incorrect Agreement

IP Infringement: Liability for unauthorized use
Loss of Rights: Unintended broad grants
Financial Exposure: Royalty disputes or damages
Regulatory Risk: HIPAA or data-rule violations
Enforceability: Invalid signature process
Operational Disruption: Access or service interruptions

eSignature Vendor Comparison for Executing Agreements

Select a platform that meets security, compliance, and volume needs; the table below shows common commercial starting prices and feature availability.

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 Varies Varies Varies
Bulk Send Yes Yes Yes Yes No
Audit Trail Yes Yes Yes Yes Yes
HIPAA Compliant Yes Yes Yes No No

Frequently Asked Questions About Usage License Agreements

Answers to common legal and practical questions when drafting, signing, and storing Usage License Agreements.


Need help? Contact support

be ready to get more
Join over 28 million airSlate SignNow users