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Contract glossary
Plain-language definitions of the legal terms you'll find in contracts. Search by keyword or browse A-Z.
Showing 145-168 of 263 terms
Promissory Note
A written, signed promise to pay a specific amount of money to a specific person or entity, either on demand or by a set date. It's the simplest form of a debt instrument, one party promises to pay, and the other holds the note.
Provision
A provision is any specific rule, requirement, or condition in a contract. 'Clause,' 'provision,' and 'section' are basically interchangeable, lawyers use them all to mean the same thing: a piece of the contract that does something.
Quantum Meruit
A Latin term meaning 'as much as is deserved.' It's a legal claim that lets you recover the reasonable value of services you provided, even without a formal contract. Courts use it to prevent someone from receiving your work for free.
Quid Pro Quo
Latin for 'something for something.' In contracts, it refers to the exchange of value between parties, each side gives something to get something. It's the basic concept behind consideration, which makes a contract legally binding.
Recitals
Recitals are the 'WHEREAS' paragraphs at the top of a contract that explain why the parties are entering into the agreement. They set the stage, background, context, purpose, but they're not usually enforceable terms themselves.
Remedies
Remedies are what you can get when someone breaches a contract. Money (damages), a court order forcing them to do what they promised (specific performance), cancellation of the deal (rescission), or a court order stopping them from doing something harmful (injunction).
Renewal
A renewal clause extends your contract beyond its original end date. Auto-renewal means it renews automatically unless someone says 'stop' within the notice window. Miss that window and you're locked in for another term.
Representations and Warranties
Representations are statements of fact: 'We own this software.' Warranties are promises those facts are true: 'We guarantee we own this software and it doesn't infringe anyone's IP.' If either turns out to be false, the other party has grounds to sue.
Rescission
The cancellation of a contract that restores both parties to their positions before the contract existed, as if the deal never happened. It can happen by mutual agreement, by one party exercising a contractual right, or by court order.
Retainer
A retainer is an upfront payment to lock in someone's services. You pay in advance, and they apply the retainer against future work. It guarantees availability for you and steady cash flow for them.
Rider
A rider is an extra document attached to a contract that adds specific terms or modifications. It's similar to an addendum but most common in insurance and entertainment. Think of it as a custom add-on to a standard agreement.
Right of First Refusal
A contractual right that gives one party the first opportunity to buy or lease something before the owner can sell or lease it to someone else. The right-holder gets to match (or refuse) the best offer the owner receives.
Scope Creep
The gradual expansion of a project's requirements beyond what was originally agreed, usually without adjusting the timeline, budget, or contract terms. Scope creep happens through small, incremental changes that individually seem reasonable but collectively transform the project into something much larger than what was priced.
Scope of Work (SOW)
A scope of work spells out exactly what you're doing, what you're delivering, when it's due, and what 'done' looks like. It's your best defense against scope creep, that slow drift where a '10-page website' turns into '10 pages plus a blog, e-commerce store, and mobile app.'
Security Deposit
Money paid upfront by a tenant to a landlord as protection against property damage, unpaid rent, or lease violations. The landlord holds the deposit during the lease and must return it, minus legitimate deductions, after the tenant moves out. Every state has specific rules about maximum amounts, holding requirements, and return deadlines.
Service Level Agreement (SLA)
A service level agreement defines the measurable performance standards a service provider commits to meeting. It spells out uptime guarantees, response times, resolution deadlines, and what happens (usually service credits or penalty payments) when those standards are not met. SLAs turn vague promises into enforceable commitments.
Set-Off
The right to deduct a debt you're owed from a debt you owe to the same party. If your client owes you $10,000 for past work and you owe them $3,000 for supplies, you can set off the amounts and claim the net balance of $7,000.
Severability
A severability clause is your contract's safety net. If a court strikes down one clause as unenforceable, the rest of the contract survives. Without it, one bad provision could take down the entire agreement.
Specific Performance
A court order requiring a party to fulfill their exact contractual obligations, not just pay damages. Courts reserve it for situations where money can't adequately substitute for what was promised, like a one-of-a-kind property or irreplaceable goods.
Statute of Limitations
The statute of limitations is your deadline to sue. Miss it, and your claim is dead, no matter how strong it is. For contract disputes, the window is typically 3-6 years depending on the state, but your contract might shorten it.
Subcontractor
A subcontractor is someone your contractor hires to do part of the work. You hired Agency X to build your app. Agency X hired Developer Y to write the backend code. Developer Y is the subcontractor. You probably never met them, but their work quality affects your project.
Subletting Rights
A tenant's ability to rent out all or part of their leased space to a third party (subtenant) while remaining responsible for the original lease. Unlike a lease assignment, the original tenant stays on the lease and acts as a middleman between the landlord and subtenant. The subtenant pays the tenant, who pays the landlord.
Successors and Assigns
A clause ensuring that the contract's rights and obligations transfer to anyone who takes over a party's business, whether through acquisition, merger, inheritance, or assignment. It makes the contract stick even when the original parties change.
Sunset Clause
A provision that automatically terminates a contract, specific obligation, or law after a set date unless actively renewed. Unlike a standard termination clause that requires someone to act, a sunset clause means inaction equals expiration. The obligation dies on the specified date unless both parties affirmatively extend it.
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