54.6 Net sales price (or net invoice price)

54.6 Net sales price (or net invoice price)

Definitions of ‘net sales price’ (or similar expressions, for example, ‘net sales value’) are often included in intellectual property licence agreements and other agreements where payments are calculated by reference to the amount of a party’s sales of goods. The concept of a net sales price implies that certain items are deducted from the amount actually charged to the customer by a licensee, when calculating the net amount. The aim is to make sure that, for example:

  1. (a)

        the licensor receives payments for its grant of licence;

  2. (b)

        that the licensee does