Clauses For Leave And License Agreement

Posted: December 5, 2020 in Uncategorized

As a general rule, there is a clause in the agreement that the rent is revised upwards each year. A 5%-10% increase is normal, but it depends on the prevailing market price in your city. The duration is the duration of the license. It is usually 11 months, but can also be increased to five years: there is no time limit. We can also talk about a period of prohibition. For example, the tenant may be punished – and some or all, withholding their deposit – too early to terminate the agreement (usually six months). The time limits are not applicable in court, but if you sign a contract with a prohibition period, you are obliged to comply. If the lease and license agreement contains a force majeure clause and the unpredictable event is included in the categories defined in the pre-defined clause. Subject to the reading of such a clause in the agreement, the licensee may disclose to the licensee events that constitute a case of force majeure and, therefore, suspend its obligation to pay royalties until the force majeure is pursued. Licensees may also face challenges in retracting section 56 of the Indian Contract Act, the doctrine of frustration, since the current impossibility of blocking or pandemic is not permanent and does not defeat the entire contract or release the obligations of the parties, but merely provides additional time for the implementation of the agreement.

However, the parties may attempt to demonstrate the frustration of the section 56 contract by arguing that the blockage prevents them from using the premises licensed for commercial activity, resulting in the acquisition of the licence. Since the premises cannot be used for the purposes for which the contract was entered into, it can be argued that the contract is frustrated. Therefore, a licensee may, for example, request the termination of the contract based on frustration, “unless the purchaser continues to store his goods in the premises or resides in the premises and, during that period, the licensee is not free to use or use the premises in accordance with his or her wishes. The pandemic has placed a heavy financial burden on the country and its citizens. The inability to pay the licence fee/rental by a taker/tenant is a very possible reality, making them unable to meet the terms of the contract/agreement to which they are legally bound. This, in turn, will result in a large number of litigations before the courts. It should be noted that even if the force majeure clause then contains the Acts of the Apostles or natural misfortunes, it should be considered whether the courts would regard the pandemic as an act of God`s natural misfortune and allow tenants/licensed to suspend their obligations.

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