Permitted uses may be excluded or restricted by reasonable contract term
186.—(1)  Subject to this section and section 187, a rights owner may, by contract with a person, exclude or restrict the application of a permitted use to that person.
(2)  A contract term between the rights owner and another person (called in this section the counterparty) is valid for the purposes of subsection (1) only if —
(a)the contract is individually negotiated; and
(b)the term is fair and reasonable, having regard to the circumstances that are, or ought reasonably to be, known to or in the contemplation of the parties when the contract is made.
(3)  For the purposes of subsection (2)(b), relevant matters in deciding whether a term of a contract is fair and reasonable include —
(a)the strength of the bargaining positions of the parties relative to each other, taking into account (among other things) alternative means by which the counterparty’s requirements could have been met;
(b)whether the counterparty received an inducement to agree to the term, or in accepting it had an opportunity of entering into a similar contract with other persons, but without having to accept a similar term;
(c)whether the counterparty knows or ought reasonably to know of the existence and extent of the term (having regard, among other things, to any custom of the trade and any previous course of dealing between the parties); and
(d)whether at the time of the contract it is reasonable to expect that the contract is workable without the term.
(4)  Subject to any contrary intention in the contract, where a contract term between a rights owner and a person excludes or restricts the application of a permitted use to that person, the benefit of that term passes to the rights owner’s successors in title.
(5)  This section applies to any contract made before, on or after 21 November 2021.