Legal Definitions - consent clause

A consent clause is a specific provision within a contract or legal agreement that requires one party to obtain the explicit permission or approval from another party before taking certain actions or making particular decisions. This clause ensures that significant steps are not taken unilaterally, providing a safeguard for the party whose consent is required and allowing them to maintain control or oversight over specific aspects of the agreement.

• Example 1: Commercial Lease Agreement

  Imagine a small business that leases an office space. Their lease agreement contains a clause stating, "Tenant shall not make any structural alterations or improvements to the leased premises without the prior written consent of the Landlord." If the business decides it needs to knock down a non-load-bearing wall to create a more open-plan office, they cannot proceed without first getting written permission from their landlord.

  This illustrates a consent clause because the tenant is legally bound to seek and receive the landlord's approval before undertaking a specific action (structural alteration) that affects the leased property.

• Example 2: Business Loan Agreement

  A manufacturing company secures a large loan from a bank to expand its operations. The loan agreement includes a consent clause that reads, "Borrower shall not sell, transfer, or otherwise dispose of any material assets, including machinery or real estate, without the express written consent of the Lender." If the company later decides to sell an older factory building that was listed as an asset in their financial statements when the loan was granted, they must first obtain the bank's permission.

  This demonstrates a consent clause because the company is obligated to get the bank's approval before selling a significant asset, protecting the bank's financial interest in the company's stability and assets.

• Example 3: Software Licensing Agreement

  A software developer licenses their proprietary code to another tech company for integration into a new product. The licensing agreement includes a consent clause stating, "Licensee shall not sublicense, distribute, or otherwise transfer the licensed code to any third party without the express written consent of the Licensor." If the tech company later wants to allow a partner company to also use a portion of that code, they must first get permission from the original developer.

  This shows a consent clause in action as the tech company must secure the developer's approval before sharing or transferring the licensed code, ensuring the developer retains control over the distribution of their intellectual property.