Permitted use: Overview, definition and example
What is permitted use?
Permitted use refers to the specific ways in which something, like property or intellectual property, can be used according to the terms of a contract. It defines the allowed activities or purposes for which the asset or resource may be utilized.
Why is permitted use important?
This term is important because it helps clarify what the parties can and cannot do with the property, product, or service involved in the agreement. Without clear limits on permitted use, there could be misuse or violations that could lead to legal disputes.
For example, in a software licensing agreement, the "permitted use" clause would specify whether the software can be used for personal or commercial purposes, or if it is restricted to a specific number of users or devices.
Understanding permitted use through an example
Imagine a business licenses software for internal use only. The agreement includes a "permitted use" clause stating the software can only be used by employees for business purposes. If the business then uses the software for personal projects or allows outside contractors to use it, they would be violating the terms of the agreement.
In another case, a property lease might have a "permitted use" clause stating the tenant can only operate a retail store in the space, and not a restaurant or office, limiting the ways the tenant can use the property.
Example of a permitted use clause
"The Licensee may use the software solely for internal business operations and shall not copy, distribute, or use it for any other purpose without prior written consent from the Licensor."
Conclusion
The "permitted use" clause outlines how something can be used under the terms of an agreement. It protects the interests of the owner or licensor by setting clear boundaries and preventing misuse or unauthorized use.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.