“Revoke”

Today I encountered in a contract the following use of revoke:

The Vendor may revoke this license at any time upon notice to the Company.

For purposes of a license granted by contract, I recommend using instead terminate.

Here’s the relevant part of the Black’s Law Dictionary definition of revocation:

1. An annulment, cancellation, or reversal, usu. of an act or power. 2. Contracts. Withdrawal of an offer by the offeror.

I can imagine referring to, say, a driver’s license being revoked. But with respect to a license granted by contract, revoke conveys the same meaning as terminate. Given that terminate is the word to use for ending a contract, economy would suggest using that word with respect to licenses, too. In contract drafting, “elegant variation”—switching words for the sake of variety—is a poor idea.

A quick search of EDGAR shows that uses of terminate with respect to licenses vastly outnumber uses of revoke. That’s just as well.

Posted in Selected Usages | 8 Comments

  • http://bradykrissesq.com Brady Kriss

    I disagree. For purposes of clarity and disambiguation, using “revoke” to refer to the license and reserving “terminate” for the contract itself can be very helpful. “Revocable,” “irrevocable” are already standard terms to use in a license grant, and sticking with that terminology when referring to the license itself is helpful.

    License grants should specify if a license is revocable or irrevocable, and perpetual or not. Revocability and perpetuality interact with the term and termination of the underlying contract in different ways.

    So, revocation and termination in the context of a licensing contract do not necessarily mean the same thing, and choosing to use “revoke” instead of “terminate” is not always just an elegant variation. That said, I myself tend to use “terminate” when that adequately conveys the concept. But given that you’re not going to get rid of the “revocable” or “irrevocable” in the license grant, I see no harm in people choosing to use “revoke” when that’s what they mean.

    • http://www.adamsdrafting.com/ Ken Adams

      Thanks for reminding me of irrevocable! MSCD discusses use of irrevocably with appoints and consents and use of irrevocable in connection with licenses and powers of attorney.

      (The relationship between irrevocable and perpetual is perhaps worth a blog post unto itself. Do they mean the same thing?)

      I suspect that irrevocable and irrevocably owe their prevalence to the fact that you can’t slap a prefix onto termination to convey the opposite meaning, and it follows that you don’t have an adjective and adverb form either. Untermination, unterminable, and unterminably aren’t going to cut it. But because termination is simpler than revoke, it is able retain its primacy.

      Finally, the standard I’m going by isn’t “What’s the harm in it?” Instead, one has to make a choice and stick with it, so the question is, which is the best word to use in connection with licenses? I opt for terminate.

  • Mark Anderson

    Ken, my reaction to your tweeted question was that I use the word terminate for ending a licence, and I didn’t see a need to use the word revoke. I have yet to see any reason for changing that view. I take Brady’s point about irrevocable licences, but agree with your response.

    Instinctively I shy away from the idea that a licence is somehow separate from the contract in which it is granted. I suspect this view may have come from land law, about which I know very little, and seems to be more prevalent in US lawyers’ thinking than UK lawyers’ (recalling a discussion between a US lawyer and a UK lawyer in one of my seminars some years ago). My contracts tend to state explicitly that on termination of the licence agreement, the licence automatically terminates, but only because I have heard people argue that the licence is separate and I want to avoid that interpretation. If that other view is correct, then I might see an argument for using a different term to terminate, keeping terminate for the underlying contract. Revoke in that sense would be a withdrawal of a grant of property rights, similar to the withdrawal of other privileges, eg a driving licence.

    As for perpetual v irrevocable, Francis refers to a UK case, in which the judge made this comment, which seems right to me:

    The word “perpetual” can carry different shades of
    meaning. It can, for example, mean “never ending” (in the sense of
    incapable of being brought to an end) or it can mean “operating without
    limit of time” (so as, …to grant a licence of indefinite duration, but subject to any
    contractual provisions governing termination of the licence). I
    consider that this latter interpretation of the word “perpetual” in …[context] …is the correct one.

    • http://www.adamsdrafting.com/ Ken Adams

      I agree that in most contexts it’s unhelpful to treat the contract and the license as existing independently. But it’s routine for some contracts to contain a license as just one component. The contract containing the provision that prompted this post is just such a contract. In that context, it can make sense to treat the license as having independent existence.

      Regarding irrevocable and perpetual, I belatedly recall that I discuss perpetually in MSCD. I think that as a practical matter, they can end up meaning the same thing.

      As a practical matter, what a judge says has little or no bearing on semantics—I don’t need a judge to tell me what stuff means. Instead, caselaw acts as the snakes and ladders one can face in attempting to articulate meaning in a way that works in the real world.

      • AWrightBurkeMPhil

        Can’t a license be given for a term, at the end of which it expires, but during which it cannot be revoked? Irrevocable but not perpetual!

        Where I’m not going is how to pronounce “revocable” and “irrevocable.” Is that a British v. American thing or does the source of the different pronunciations lie elsewhere?

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  • Chris Lemens

    Ken:

    One usage to be aware of is that software companies often “sell licenses.” From a documentation perspective, large purchasers get an agreement that sets out the terms of the purchasing arrangement, but not the terms of the licenses. The license terms are in a separate document (often click-through agreements). The typical arrangement is that ending the purchasing arrangement does not end the licenses purchased under it. Just food for thought.

    Chris