• (475) 422-6297

  • kentpress@aol.com

Q. Under what circumstances should a licensor be able to terminate a licensee?

A. A well-drafted termination provision should give the licensor the right to terminate the agreement upon the occurrence of certain events, including:

  • Licensee’s failure to obtain the licensor’s product approvals prior to the distribution of the licensed goods.
  • Licensee’s failure to introduce product prior to the product introduction date;
  • Licensee’s failure to meet the initial shipment date;
  • Licensee’s failure to maintain product liability insurance;
  • Licensee’s failure to make the minimum royalty payments;
  • Licensee’s failure to continuously sell or market products;
  • Recall of the product by the Consumer Product Safety Commission;
  • Licensee’s protracted inability to conduct business; or
  • Licensee’s repeated failure to pay royalties when they come due.
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