Conditional Rights Provision

A Conditional Rights Provision is a contract provision that grants contractual rights to a party under specified triggering conditions.

• Context:
  • It can (typically) specify the Permissioned Party, Permitted Action, Permissive Conditions, Manner of Exercising Permission, and Objective of the Permission.
  • It can be part of broader contract sections like Permitted Use Clause or Consent to Assignment Section within a License Agreement.
  • It can provide a framework for granting conditional permissions in various contractual scenarios, from lease agreements to intellectual property licenses.
  • ...
• Example(s):
  • a Sublease Consent Provision permitting the tenant to sublease the property if certain conditions are met, such as:
    • “The Tenant may sublease the Premises with the prior written consent of the Landlord, which shall not be unreasonably withheld, conditioned, or delayed."
  • an Assignment Consent Provision allowing a party to assign its rights under the contract if the other party provides written consent, such as:
    • “Neither party may assign this Agreement without the prior written consent of the other party, except that the Company may assign this Agreement in connection with a merger, acquisition, or sale of all or substantially all of its assets."
  • a Permitted Use Provision in a software license agreement specifying how the licensee may use the licensed software, such as:
    • “The Licensee may use the Software solely for internal business purposes and may not sublicense, distribute, or modify the Software without the express written permission of the Licensor."
  • a Permitted Disclosure Provision in a non-disclosure agreement allowing the recipient to disclose confidential information under specific circumstances, such as:
    • “The Recipient may disclose Confidential Information to the extent required by law, regulation, or court order, provided that the Recipient promptly notifies the Discloser of such requirement and cooperates with the Discloser to limit the scope of disclosure."
  • ...
• Counter-Example(s):
  • Unconditional Permission Provisions, which grant permissions without any conditions or limitations.
  • Triggered Obligation Provision, which contain contractual obligations.
  • ...
• See: Contract Provision, License Agreement, Permitted Use Clause, Consent to Assignment Section, Non-Disclosure Agreement.

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References

2024

• Claude 3
  • Conditional Permissions Provisions grant specific rights or permissions to a party under certain conditions or circumstances, providing a framework for allowing actions or uses that would otherwise be prohibited by the contract.
  • Conditional Permissions Provisions can take various forms, such as:
    • Clauses that permit a party to take a specific action, like subleasing a property or assigning rights, only with the prior written consent of the other party.
    • Provisions that allow a licensee to use intellectual property in a limited manner, such as for internal business purposes only, and prohibit any other use without express permission.
    • Clauses that specify circumstances under which a party may disclose confidential information, such as when required by law or court order, and outline the procedures for such disclosure.
    • Provisions that grant permission for a party to exercise a right, like terminating the contract, only if certain conditions are met, such as providing prior written notice or opportunity to cure a breach.
  • When drafting Conditional Permissions Provisions, it is important to clearly define the conditions and scope of the granted permissions, ensuring that they align with the overall objectives of the contract while protecting the interests of the parties involved. These provisions should be specific enough to avoid ambiguity but also flexible enough to accommodate potential changes in circumstances.

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