Contract Terms Glossary

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Ab initio means from the start.

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If you break the loan rules, the lender can ask for all the money back at once.

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An AUP tells you what you can and can't do with a software service.

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These terms define when a construction project is mostly done and ready for use, even if some small tasks remain.

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It's a checklist to make sure the work meets the client's standards before it's accepted.

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It's about checking if what you ordered matches what you got, and deciding if you'll keep it.

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Acceptance testing checks if a product works as it should before it's fully accepted, either at the factory or on-site.

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This clause lets the landlord enter the property for things like repairs or inspections, usually with advance notice.

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Accrued liabilities are bills the company owes but hasn't paid yet.

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It's a statement in a contract that says one party owns the IP, and the other party is just using it.

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ACV is what your item is worth today, while Replacement Cost is what it costs to buy a new one.

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An addendum is an extra document that changes or adds to a contract.

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An additional insured is someone added to another's insurance policy, while a named insured is the main person or entity the policy covers.

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Additional rent is extra costs tenants pay besides the main rent, like maintenance and taxes.

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It's a fee franchisees pay to support marketing efforts for the whole brand.

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An amendment changes the contract terms after signing, with everyone's agreement.

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These clauses prevent companies from joining or supporting boycotts that their government does not approve.

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Anti-dilution provisions prevent your share of a company from shrinking if new shares are sold cheaply.

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This clause decides which country's laws will apply if there's a disagreement over the contract.

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Arbitration is a way to settle disputes without going to court, using agreed-upon arbitrators to make a final decision.

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This agreement lets someone open and manage multiple franchise locations in a certain area.

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Assignment is when you hand over your contract duties or benefits to someone else.

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Assignment means giving away ownership of IP, while a license lets someone use it without giving up ownership.

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You or your employer can end your job at any time, for almost any reason.

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Audit rights let a party check if royalty payments are correct.

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This clause automatically renews your subscription unless you cancel it in time.

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Gross receipts are all the money you make, while adjusted gross is what's left after certain expenses.

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This term covers how personal data is legally transferred across countries, focusing on EU rules.

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It's a fee you pay to help cover the costs of advertising for the whole franchise.

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Mediation or ADR is a way to settle disagreements without going to court, using a neutral person to help find a solution.

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These are the people or companies involved in a contract and those who sign it.

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It's the franchisor's okay for where you can set up your franchise.

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SPAs are used to buy shares of a company, while APAs are used to buy the assets of a company.

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This clause decides if you can rent out your rented space to someone else.

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The company being bought in a merger or acquisition deal.

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It sets rules for selling or transferring a franchise and gives the franchisor first dibs on buying it.

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It's about who can use the software and how many can use it at the same time.

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It's a deal where someone gets a cut of the profits after costs are covered.

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These clauses make sure that subcontractors have the same duties and responsibilities as the main contractor.

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Base rent is the main rent payment you make each month, not including extra costs.

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These bonds are like insurance to make sure contractors do what they promise in government contracts.

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A bill of lading is like a receipt for shipping goods, and Incoterms outline who handles what in shipping.

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A BOM is like a recipe for making a product, listing all the parts and materials needed.

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It's a short-term insurance agreement that covers you until the official policy is ready.

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Boilerplate is the standard legal language used in many contracts to handle common issues.

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Bona fide means acting honestly and in good faith; mala fide means acting dishonestly or with bad intentions.

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It's a rulebook that franchisees must follow to ensure all locations look and operate the same.

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Breaking the contract rules; a big break lets the other side end the deal.

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A BAA is a contract that ensures companies handling health data protect it according to HIPAA rules.

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The government prefers buying products made in the U.S. for its projects.

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It's a way for one business partner to force the other to buy or sell shares at a set price to break stalemates.

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A buyout is a single payment for a service, with no future payments.

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Compensation is what you get paid for your work, including your salary and any extra perks.

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It's the part of the contract that details how and where credits appear in a movie or show.

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These are rules for what happens if partners can't agree, often leading to one buying out the other.

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These terms decide if someone leaving a company gets to keep their shares based on how and why they leave.

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A board or committee that makes important decisions and oversees how a partnership or joint venture is run.

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This term defines who owns what intellectual property before and after a partnership or joint venture.

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Life rights let someone tell your life story in movies, books, or shows.

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This clause means you must try your best to do the job well, like others in your field would.

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A bid protest is when someone challenges how a government contract was given out.

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The SOW/BOQ is a detailed list of what needs to be done and what materials are needed for a construction project.

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This clause decides which country's laws will apply if there's a disagreement over the contract.

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It's when an insurance policy is ended early or not renewed when it expires.

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It's the money or assets partners put into a business at the start.

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Buyers need to check what they are buying because sellers might not tell them everything.

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Chain of title ensures you own what you claim, and clearances mean you have permission to use others' work.

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This clause lets parties adjust the contract if new laws make it hard to follow the original terms.

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It's a formal way to change the original construction contract.

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It's a formal way to agree on changes to a contract after it's been signed.

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This clause lets the contract be changed if something unexpected happens, allowing for price or schedule adjustments.

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Some clauses are automatically included in government contracts by law, even if not written in the contract.

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It's when a contractor asks for more time to finish a project because something unexpected happened.

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It's a formal way to tell your insurer about an event that might lead to a claim.

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This clause requires tenants to clean and fix up the property before leaving.

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Closing conditions are the checklist items that must be completed before a deal is finalized.

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These are the 'must-haves' that need to be sorted out before a deal can officially close.

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You pay part of your medical bills; either a percentage (co-insurance) or a fixed fee (co-payment).

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A CBA is a contract between a company and a union about work rules and pay.

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The start and end dates of a lease or rental agreement.

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Compensation is what you get paid for your work, including your salary and any extra perks.

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It's a document confirming the job is done and a period to fix any issues that pop up after.

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You must follow all laws and rules, especially those about exporting goods and services.

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Confidential information is secret stuff a company doesn't want everyone to know.

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It's secret info shared in an IP deal that shouldn't be leaked.

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It's about keeping company secrets safe and not sharing them with others.

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It's the secret sauce of how a franchise runs its business, which must be kept under wraps.

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A confidentiality clause stops you from sharing secret information with others.

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This clause keeps the details of a settlement private between the involved parties.

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Consideration is what each party gives to the other in a contract, like money or services.

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Consideration is what the buyer gives to the seller in a deal, like money, shares, or future payments based on performance.

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It's a legal claim on a property to ensure contractors get paid, with some money held back until the job is done right.

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It's when an employee quits because their work situation has become unbearable due to the employer's actions.

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It's a promise from the supplier to keep sending goods without stopping.

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Controllers decide how and why personal data is used, while Processors handle the data according to the Controller's instructions.

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TINA requires contractors to be honest about costs when negotiating government contracts.

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Counterparts are copies of a contract signed separately but together make one complete agreement.

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A non-compete stops someone from working for competitors or starting a competing business for a certain time.

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Covenants are promises in a loan deal about what you must do and what you can't do.

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This clause lets landlords increase rent based on inflation rates, keeping up with the cost of living.

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It's the part of the contract that details how and where credits appear in a movie or show.

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It's the project's timeline showing what needs to be done and when to finish on time.

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A cure period gives someone time to fix a mistake in a contract before facing penalties.

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It tells you what currency to use for payments.

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Data ownership defines who controls and can use the data you provide to a SaaS service.

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This clause explains how disagreements between a contractor and the government are handled.

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An earn-out is extra money the seller gets if the business does well after it's sold.

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This clause decides which state's or country's laws will be used if there's a dispute about the contract.

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It's like renting space and power on someone else's computer over the internet.

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Occurrence covers events during the policy; claims-made covers claims filed during the policy.

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These are the people or companies involved in a contract and those who sign it.

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A peril is something that can cause damage or loss, and a covered peril is one that your insurance will pay for.

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Political risk is the chance that a change in government could affect a contract.

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It's the amount you pay to buy something in a contract.

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Put/call options let a partner buy or sell their stake in a business under certain conditions.

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If goods aren't right, the seller can fix or swap them out.

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It's a regular payment you make to keep using the franchise brand and support.

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Collateral is something valuable you promise to give the lender if you can't pay back a loan.

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These are rules that parties must follow between signing a deal and finalizing it to keep everything stable.

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It's the deadline for finishing a construction project.

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These terms ensure that union dues are automatically taken from employees' paychecks.

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It's about who can use the software and how many can use it at the same time.

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This clause lets you change the construction plan and adjust the budget or timeline accordingly.

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The government prefers buying products made in the U.S. for its projects.

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It's when a contractor asks for more time to finish a project because something unexpected happened.

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It's a document confirming the job is done and a period to fix any issues that pop up after.

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Damages are money paid for breaking a contract. Consequential damages cover indirect losses, and liquidated damages are pre-agreed amounts.

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If there's a data leak, you must tell people and authorities quickly.

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Only collect and use the data you really need for the task at hand, and don't use it for anything else without permission.

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Data ownership defines who controls and can use the data you provide to a SaaS service.

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A DPA is a legal agreement that makes sure a company handles personal data correctly under GDPR rules.

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People can see, remove, or move their personal data held by companies.

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These are rules for what happens if partners can't agree, often leading to one buying out the other.

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Being banned from government contracts because of breaking rules.

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It's the summary page of your insurance policy showing who and what is covered, and for how much.

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It's the amount you pay before your insurance covers the rest.

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A deed is a formal document that proves ownership or an agreement.

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Default is when someone doesn't do what they promised in a contract.

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Default events are situations that allow a lender to take action, like demanding full repayment, if certain things go wrong.

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Goods that don't meet the contract's standards or are faulty.

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It's the time after construction when the builder must fix any problems that show up.

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This section defines what work will be done and what will be delivered in a project.

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It decides who owns the goods and who is responsible if something goes wrong during delivery.

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It's the timeline for when products or services should be delivered.

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These are different ways to organize construction projects, determining who does what and when.

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This agreement lets someone have the exclusive chance to create a project from a book, script, or idea.

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This clause explains how disagreements between a contractor and the government are handled.

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It's the process of ending a partnership or joint venture and settling its affairs.

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This is about how partners split the money they make together.

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A dividend policy is a plan for how a company shares its profits with its shareholders.

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It's a promise about how often the service will be up and running.

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Majority owners can make minority owners sell their shares, or minority owners can join a sale to ensure fair treatment.

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Drag-along rights let majority shareholders make minority shareholders sell their shares if the company is being sold.

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Due diligence is a deep dive into a company before buying it, and disclosure schedules list any exceptions to what the seller promises about the company.

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This clause tells you how long you have to keep secrets, even after the contract ends.

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Unions must treat all workers they represent fairly and equally.

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It's the cost of borrowing money, and if you miss payments, the cost goes up.

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An LC ensures the seller gets paid, while documentary collection involves banks handling payment documents.

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Liquidated damages are set fees you pay if you don't meet contract deadlines.

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Net profits are what's left after all the bills are paid.

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Extra benefits like a dressing room and travel are included in the contract for the talent's comfort.

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Privacy should be built into systems and processes from the start, not added later.

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This clause requires you to either return or destroy documents when a contract ends.

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How long the contract lasts.

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When a contract ends, this clause tells you what to do with any data you have, like giving it back or deleting it.

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These terms ensure that union dues are automatically taken from employees' paychecks.

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This clause automatically renews your subscription unless you cancel it in time.

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This clause lets the contract be changed if something unexpected happens, allowing for price or schedule adjustments.

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It's when a contractor asks for more time to finish a project because something unexpected happened.

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The start and end dates of a lease or rental agreement.

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You must follow all laws and rules, especially those about exporting goods and services.

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This clause lets landlords increase rent based on inflation rates, keeping up with the cost of living.

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It's the amount you pay before your insurance covers the rest.

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These are different ways to organize construction projects, determining who does what and when.

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Ending a lease early can cost you extra fees or penalties.

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An earn-out is extra money paid to the seller if the business does well after it's sold.

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An earn-out is extra money the seller gets if the business does well after it's sold.

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An employment contract is the agreement that sets out the rules for your job.

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This clause says that what’s in the contract is all there is—nothing else counts.

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Escrow is like a safety deposit box for money during a deal, ensuring everyone does what they promised before money changes hands.

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It's money set aside to ensure the seller meets their promises, protecting the buyer from future issues.

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Estoppel stops someone from going back on their word if it would harm another person who relied on that word.

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If certain bad things happen, the lender can demand their money back right away.

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Exclusions are things your insurance or contract won't cover.

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Exclusivity means one party promises to work only with the other and not with anyone else in the same field.

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Exclusivity means only one party can use the IP; sole means the licensor can use it too; non-exclusive means multiple parties can use it.

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These clauses prevent you from working with competitors and require you to maintain a good public image.

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This clause stops partners from competing against the joint venture, ensuring everyone focuses on making it successful.

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These rules let big shareholders force smaller ones to sell their shares when the company goes public.

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These clauses make sure everyone follows the rules for exporting goods, especially sensitive ones like military equipment.

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This clause stops you from trying to take clients or employees from your old job.

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Option periods are times when a contract can be extended if both parties agree.

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Premium is what you pay for insurance; earned premium is what the insurer keeps as time passes.

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Paying off your loan early, which might save interest but could include extra fees.

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These clauses ensure that no other franchisee can operate too close to you, protecting your business area.

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It's the time frame during which a product is good to use or sell.

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This policy gives you extra insurance coverage on top of your existing policies.

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A vesting schedule is a plan that outlines when founders or employees gain full ownership of their shares.

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Acceptance testing checks if a product works as it should before it's fully accepted, either at the factory or on-site.

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These clauses make sure that subcontractors have the same duties and responsibilities as the main contractor.

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A buyout is a single payment for a service, with no future payments.

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This clause sets rules on how much you can use a service to keep things fair for everyone.

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Fiduciary duties mean partners must put the partnership's interests first and act honestly and carefully.

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Field of use limits where and how you can use the licensed IP.

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Flow-down clauses make sure subcontractors follow the same rules as the main contractor.

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Force majeure is a clause that lets parties off the hook if something big and unexpected happens, like a natural disaster.

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It's a contract term that lets you off the hook if something big and unexpected happens, like a natural disaster, that makes it impossible to keep your end of the deal.

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Force majeure means unexpected events like natural disasters or war that stop a contract from being fulfilled.

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This clause lets a company off the hook if something unexpected and uncontrollable messes up their supply chain.

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Item 19 in the FDD shows how much money you might make with the franchise.

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It's the upfront cost to start a franchise, letting you use the brand and business model.

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A franchisee runs a business using the brand and system of a franchisor, who owns the brand.

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Frustration is when something unexpected makes it impossible to fulfill a contract.

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It's a deal where both sides agree to end the dispute completely, usually with a payment, and promise not to bring it up again.

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This term defines who owns what intellectual property before and after a partnership or joint venture.

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This clause decides where and under which laws any contract disputes will be resolved.

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It's a contract where the contractor gets paid a set amount, no matter what it costs to finish the job.

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This clause explains what the software does and what features you get.

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These are contract terms that let deadlines be extended if bad weather or other unexpected events happen.

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A DPA is a legal agreement that makes sure a company handles personal data correctly under GDPR rules.

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A golden parachute is a big payout for executives if they lose their job due to a company takeover.

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These terms decide if someone leaving a company gets to keep their shares based on how and why they leave.

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A board or committee that makes important decisions and oversees how a partnership or joint venture is run.

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This clause decides which state's or country's laws will be used if there's a dispute about the contract.

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This clause outlines what you can do with the licensed IP, where you can do it, and for how long.

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It's a step-by-step process for employees to raise and resolve work-related complaints.

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Gross receipts are all the money you make, while adjusted gross is what's left after certain expenses.

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Gross sales is the total money made from sales, used to figure out how much royalty to pay.

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A guarantor promises to pay if the borrower can't. A guarantee is that promise.

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Guild agreements are contracts that outline how actors, writers, and directors work with studios and producers.

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Late fees are penalties for paying rent late, but you might get a few extra days to pay without penalty.

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It's a promise to pay a set amount, no matter how much you sell.

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A mutual release is when both parties agree not to sue each other over past issues.

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Notice period is the time you or your employer must give before leaving a job. Garden leave is when you're paid to stay away from work before leaving.

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This clause limits how many people can live in or visit the rental property.

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This clause tells you where you can use the IP.

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A BAA is a contract that ensures companies handling health data protect it according to HIPAA rules.

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Escrow is like a safety deposit box for money during a deal, ensuring everyone does what they promised before money changes hands.

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It's money set aside to ensure the seller meets their promises, protecting the buyer from future issues.

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It's a promise not to blame the other party if something goes wrong.

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When you stay in a rental after your lease ends without permission, you're in a holdover situation.

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It's like renting space and power on someone else's computer over the internet.

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A part of the payment is kept back until the job is done right.

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It's when the building is ready to use, even if some minor work is still left to do.

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This clause outlines how long and under what conditions you work.

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It's about checking if what you ordered matches what you got, and deciding if you'll keep it.

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It's the money or assets partners put into a business at the start.

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This clause says that what’s in the contract is all there is—nothing else counts.

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It's money set aside to ensure the seller meets their promises, protecting the buyer from future issues.

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These rules let big shareholders force smaller ones to sell their shares when the company goes public.