13:53
Yes 100%
Warning
Info
LSDefine
Simple English definitions for legal terms
audit privilege
Read a random definition: reclamation
A quick definition of audit privilege:
Audit Privilege: When someone lets you use their idea or creation, they have the right to check your records to make sure you are following the rules. This is called audit privilege or audit rights.
A more thorough explanation:
Audit privilege refers to the right of the owner of intellectual property to examine the financial records of the licensee. This is usually included in a license agreement to ensure that the licensee is complying with the terms of the agreement.
For example, if a company licenses a software program from another company, the license agreement may include an audit privilege clause. This would allow the owner of the software to audit the financial records of the licensee to ensure that they are paying the agreed-upon royalties and using the software within the terms of the agreement.
Another example would be a music artist licensing their music to a movie studio. The license agreement may include an audit privilege clause that allows the artist to audit the financial records of the studio to ensure that they are paying the agreed-upon royalties for the use of the music in the movie.
These examples illustrate how audit privilege is used to protect the owner of intellectual property and ensure that they are receiving the compensation they are entitled to under the license agreement.