Sidley Newsletter on “Revocable” and “Irrevocable” in License Agreements

I recently noticed a Sidley Austin “practice note” (here) on use of revocable and irrevocable in license agreements. That’s something I hadn’t thought much about previously, so I found it of interest. The main takeaway:

Always include either “revocable” or “irrevocable” within the license grant.

If any of you licensing types have any observations, I’d be happy to hear them.

And incidentally, why use revocable and irrevocable instead of referring to termination? Perhaps because terminable is OK but nonterminable is kind of clunky.

About the author

Ken Adams is the leading authority on how to say clearly whatever you want to say in a contract. He’s author of A Manual of Style for Contract Drafting, and he offers online and in-person training around the world. He’s also chief content officer of LegalSifter, Inc., a company that combines artificial intelligence and expertise to assist with review of contracts.

2 thoughts on “Sidley Newsletter on “Revocable” and “Irrevocable” in License Agreements”

  1. Since ‘termination’ is presumably being used to describe the status of the contract that underlies the grant of the license, it makes sense to me that we’d choose a different word to describe the status of the license grant. The life cycle of the license grant is not necessarily identical to the life cycle of the contract (and is in reality often quite different).

    Another reason is that a license is not something that arises out of an agreement–It is a unilateral grant from the one who could otherwise stop the grantee from doing something. Revoking seems like a good counter to the notion of granting. (One’s willingness to give that grant might be a function of the other agreements between the parties, such as an agreement to pay somebody money. But the actual grant of the license is a separate act just like the passage of tangible property is separate from the agreement to purchase/sell property. It just gets confused because they are frequently done within the same document.)

  2. The duration and durability of a license grant can be further confused when clients/counsel fail to understand the meaning of perpetual. It is often confused with irrevocable. I have had counsel suggest to me, in the course of negotiation, that adding irrevocable to a perpetual license is redundant.


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