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Let's say there's some material licensed under X. X has section A, which states that it survives termination. But X was applied to material, parts of which can't be licensed under X in the first place. What happens with A?

Does it survive? Is it like it was never applied? Is it applied only to licensable parts? Does it depend on local laws?

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It depends what you mean by "can't be licensed under X," on what the clause is, and potentially on many other facts. A contract can be in force between two people even if one is in material breach because, for example, they lack the rights to license the material to the other. In fact, contracts exist primarily so that they can be enforced when there is a material breach.

So suppose Section A said both parties would submit any disputes to arbitration in King County, Washington under the rules of the American Arbitration Association, and that that provision survived the contract. A dispute that arose because the licensor lacked the legal ability to license in the first place would likely be subject to that arbitration clause.

There might (rarely) be ways around that in a particular case, and what the clause is matters, because certain types of contract clauses cannot be enforced or cannot easily be enforced. For example, a non-compete clause that is overbroad under the laws of the state of the contract's governing law will usually not be enforceable regardless of whether it survives contract termination.

If section A states Person 1 is given a license by Person 2, but Person 2 never had the rights to give the license, then obviously Person 1 doesn't have the license because Person 1 never had the license. This is basically the "nemo dat" principle--no one can give more than they have. However, Person 2 may be liable in a lawsuit for money damages because they couldn't deliver.

Realistically, to determine what would happen under a given contract, an attorney would need to review the contract and the facts.

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  • My question is caused by this question from OSSE. I didn't want to narrow it to GPL case or US laws specifically if possible, so I formulated it in a more general sense. But, if you want a particular example, let's say person X distributes their software under GPL, which grants unrevocable right to redistribute, but their software contains proprietary parts, which X doesn't have a right to distribute. If person Y obtains this software, do they have a right to redistribute further and do they have any rights at all? Aug 14, 2016 at 1:30
  • In that case, person Y does not have any rights (include the right to use) to the proprietary part. (Exactly as explained in the fourth para of the answer). Person Y probably can't sue person X - but the owner of the proprietary part certainly can! Dec 12, 2016 at 18:02
  • @MartinBonner: Depends on the contract. If Person Y paid $1,000 to X to get code licensed under GPL, and it turns out it isn't licensed under the GPL, then surely Y can sue X. And the owner of the software could sue X, and could either sue Y or offer the code they own for another $1,000.
    – gnasher729
    Dec 14, 2016 at 11:25

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