Legal Definitions - audit rights

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.