Authorized users

Real example - Preliminary contract included language that authorized users (customer's potential customers) of a subscription service by inclusion of a list of "potential affiliates" that would be reviewed annually. Each affiliate would have their own license fee, but the total in this deal was based on a total number of affiliates multiplied by the license fee. Issue - by including a list of users, revenue would only be able to be recognized when all those users were 'live' on the system. Resolution - language was re-written to define contract based on the main client, thus recognizing revenue when that particular client was 'live' but also included that subsequent affiliates would be added by addendum or statement of work, and bound by the terms of this deal. In other words, each affiliate that was added would have the same terms (the contract would not have to be re-written each time, and revenue could be recognized for each affiliate as each went live.