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LSDefine
Simple English definitions for legal terms
audit rights
Read a random definition: resolutory condition
A quick definition of audit rights:
Audit Rights: When someone gives permission to use their idea or creation, they have the right to check the other person's records to make sure they are being honest. This is called audit rights. It's like a teacher checking your homework to make sure you did it right.
A more thorough explanation:
Definition: Audit rights refer to the right of the licensor to inspect the licensee's books and records in an intellectual-property license agreement.
Example: In a software licensing agreement, the licensor may have audit rights to ensure that the licensee is not using more licenses than they have purchased. The licensor can request to inspect the licensee's records to verify compliance with the agreement.
Explanation: The example illustrates how audit rights work in a specific type of intellectual-property license agreement. The licensor has the right to verify that the licensee is following the terms of the agreement by inspecting their records. This helps to ensure that both parties are fulfilling their obligations and prevents any potential disputes.