A covenant not to sue is a promise not to bring a lawsuit over specified claims, events, or conduct.
Why a covenant not to sue matters
A covenant not to sue matters because it can resolve risk without always extinguishing the underlying claim in the same way as a release. The distinction can matter for contribution, insurance, multiple defendants, and later enforcement of settlement terms.
The practical effect depends on the agreement’s wording and governing law.
Where a covenant not to sue appears
Covenants not to sue appear in settlement agreements, patent licenses, trademark agreements, insurance settlements, commercial disputes, and multi-party litigation resolutions.
Practical example
A patent owner grants a company a covenant not to sue for using a specific technology in a defined product line. The promise may reduce infringement risk within that scope.
How a covenant not to sue differs from nearby terms
A covenant not to sue differs from a release because a release may give up or extinguish a claim, while a covenant not to sue is a promise about enforcement. It differs from a license because a license grants permission to use rights.
Related terms
Quick knowledge check
Why might parties use a covenant not to sue instead of only a broad release?