9.11.4: License versus Lease

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Abstract

A license agreement is like a lease in that it usually involves an agreement by which the licensor assigns some but not all of his rights in an item to a licensee and receives in exchange consideration, which is usually paid periodically over a period of time, not in one lump sum. Like a lease, one principal object of the license format is to protect against the licensee's misuse of the licensed property by retaining certain incidents of ownership in the licensor and by binding the licensee to promises to observe and respect the licensor's prior right.[1] There is no overriding legal reason why a license could not be styled as a lease (and vice versa)-both entail retention of ownership in the provider and thus are distinguished from sales-but leases are customarily thought of as applying only to tangible property.[2] (Custom also suggests that a contract which contemplates fixed...