Admittedly, reading a contract can be almost as daunting as trying to read a foreign language novel backwards. But hang in there… and focus on what you are agreeing to license (or grant someone else permission to use) and how long you are agreeing to let them use it. Keep an eye out for these words in a licensing agreement: EXCLUSIVE, NON-EXCLUSIVE & TERM/DURATION.
The TERM is the period of time that you are giving someone else permission to use your stuff. In a Licensing Agreement this contractual element is often written out as the ‘Term’ or duration of the ‘Usage Rights’. Obviously, it is important to focus on the amount of time that you are giving someone else to use your stuff because this often influences the price. For example, the amount of time that a song is licensed to be used as elevator music or the amount of time that a photograph is licensed to be used in an advertisement is controlled by the TERM designated in the Licensing Agreement.
EXCLUSIVE vs NON-EXCLUSIVE are other words to be on the lookout for in a Licensing Agreement. An EXCLUSIVE Licensing Agreement not only gives someone else permission to use your stuff, but it guarantees them that they will be the ONLY ones entitled to use it for the designated period of time. By contrast, a NON-EXCLUSIVE agreement allows you to license the SAME stuff to other folks too.
Every word in a contract is important!