Standard Royalty Contract

Licences may be granted for any number of purposes and over a wide variety of subject matter. In its simplest form, the relationship under many licences will be a party which owns something allowing another party to use that something in return for payment.

Payment under licences often takes the form of royalties – regular payments which are generally a percentage of income generated by the licensee’s activities.

This Standard Royalty Contract provides for such situations. The terms of this contract are sufficiently broad to cover a wide variety of subject matter. Indeed, the “subject matter” itself is left open for you to define.

The licence granted by this contract may be either exclusive or non-exclusive. Payment may be by royalties alone or by an initial fee (usually paid on the date of the agreement) followed by royalties. An advance against royalties is also provided for. This advance must be recouped before royalty payments commence.

When defining the subject matter, it is important to give it a name. If you were licensing a written extract, for example, you may choose to call it “the Extract”. The definition should be placed in Clause 1 and the term then used throughout the document wherever “<<insert subject matter>>” appears. A brief explanation of the subject matter should be included in Clause 1 with full details provided in Schedule 1.

Optional phrases / clauses are enclosed in square brackets. These should be read carefully and selected so as to be compatible with one another. Unused options should be removed from the document.

This Standard Royalty Contract contains the following clauses:

1. Definitions and Interpretation
2. Grant of Licence
3. Scope of Licence
4. Licensee’s Rights and Obligations
5. Waiver of Moral Rights
6. Payment, Royalties and Records
7. Licensor’s Warranties
8. Licensee’s Warranties
9. Indemnity
10. Proceedings
11. Confidentiality
12. Term and Termination
13. Post Termination
14. Non-Assignment of Agreement
15. Notices
16. Force Majeure
17. No Waiver
18. Severance
19. Law and Jurisdiction

and the following schedules:

1. <<subject matter>> (for you to define)
2. Stated Purposes

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