In the law, a grandfather clause exists when an action which, under new law, would not be permitted, is allowed to remain under prior law.
This is common in land use zoning, where an existing business is allowed to remain in operation notwithstanding the land is not zoned for its current use (e.g. an auto repair shop on land zoned for residential use). However, once the business ceases operation, the zoning rules then come into effect.
A notable grandfather clause involves the National Football League, which limits team ownership to no more than 32 entities with one that must hold a 30% share; however, the community-owned Green Bay Packers were allowed an exemption from the rules due to their community ownership which has existed since the early days of the franchise.