Legal Definitions - to-have-and-to-hold clause

A to-have-and-to-hold clause is a traditional phrase found in legal documents, most commonly in deeds transferring real estate, but also in other contracts involving the transfer of rights or property. Its primary purpose is to define the nature and extent of the ownership, rights, or interests being conveyed from one party to another. Essentially, it clarifies what the recipient is receiving and how they are entitled to possess, use, or control it. This clause is a key part of what lawyers refer to as a habendum clause.

Here are some examples illustrating its application:

• Real Estate Deed: When a family purchases a new home, the property deed will contain a section that states the property is granted "to have and to hold" by the buyers, their heirs, and assigns forever, in fee simple. This means the buyers are receiving full, perpetual ownership of the property, with the right to pass it down to their descendants or sell it to others.

  Explanation: The "to have and to hold" language here clearly establishes that the buyers are receiving complete and enduring ownership of the land and any structures on it, without any limitations on their ability to possess or transfer it in the future.

• Intellectual Property License: A software development company might license its proprietary code to another business. The license agreement could state that the licensee is granted the right "to have and to hold" a non-exclusive, non-transferable license to use the software for internal business operations for a period of five years. This specifies the limited scope and duration of the rights being granted.

  Explanation: In this context, the clause defines the precise nature of the rights transferred: the licensee can *use* the software, but they don't *own* it outright, cannot transfer it to others, and their rights expire after a set period. It clarifies the boundaries of their possession and use.

• Sale of Business Assets: When a small manufacturing business sells its machinery and customer list to a larger competitor, the asset purchase agreement might include a clause stating that the buyer is "to have and to hold" all specified assets, free and clear of all liens and encumbrances, for their exclusive use and benefit. This ensures the buyer receives unencumbered ownership of those specific assets.

  Explanation: This "to have and to hold" clause confirms that the buyer is receiving full, clear ownership of the listed business assets, free from any outstanding debts or claims by other parties, allowing them exclusive control and use of what they purchased.