Common contract clauses, explained in plain English
Use these guides to understand what a clause means, where the risk usually sits, and what you may want to negotiate before signing.
68 clauses found
Termination for Convenience
A termination for convenience clause allows one or both parties to end a contract without needing to prove a breach or fault.
Indemnity
An indemnity clause requires one party (the indemnifier) to compensate the other (the indemnified party) for specified losses, costs, or claims — including third-party claims brought against them.
Limitation of Liability
A limitation of liability clause caps the maximum financial exposure of one or both parties under a contract.
Non-Compete
A non-compete clause restricts one or both parties from engaging in activities that compete with the other, either during the contract or for a defined period after it ends.
Liquidated Damages
A liquidated damages clause pre-agrees the amount one party must pay the other if a specific breach or failure occurs — most commonly a delay in delivery or failure to meet a performance milestone.
Confidentiality
A confidentiality clause (often called an NDA provision) governs how sensitive information is defined, used, disclosed, stored, and protected during and after a business relationship.
Auto-Renewal
An auto-renewal clause automatically extends a contract for additional terms unless one party actively gives notice to terminate within a specified window.
Payment Terms
Payment terms set when payment is due, how invoicing works, what happens if payment is late, and what rights each party has to dispute or withhold payment.
IP Ownership
IP ownership states who owns work product, pre-existing materials, tools, templates, know-how, and related intellectual property rights created before, during, or after the contract term.
Governing Law
Specifies which jurisdiction’s laws will govern how the contract is interpreted.
Force Majeure
Excuses contractual performance when extraordinary events outside a party’s control occur.
Assignment Clause
Controls whether a party can transfer the contract or its rights to another entity.
Exclusivity Clause
Restricts a party from working with competitors or other partners during the contract.
Dispute Resolution
Defines how disputes between the parties will be resolved.
Arbitration Clause
Requires disputes to be resolved through arbitration instead of court.
Warranty Clause
Promises that certain statements about a product or service are true.
Termination for Breach
Allows a contract to be terminated if one party materially breaches the agreement.
Most Favored Nation Clause
Requires one party to give terms that are at least as favorable as those offered to others.
Governing Language Clause
Specifies which language controls if contract versions in different languages conflict.
Time Is of the Essence Clause
Makes deadlines and timing obligations legally material under the contract.
Entire Agreement Clause
States that the written contract is the full and final agreement between the parties.
Notice Clause
Sets rules for how formal notices must be delivered under the contract.
Severability Clause
Says that if one part of the contract is unenforceable, the rest can still remain in effect.
Waiver Clause
Says that failing to enforce a right once does not mean it is permanently given up.
Counterparts Clause
Allows a contract to be signed in multiple copies that together form one agreement.
Amendment Clause
Defines how a contract can be changed after it is signed.
Survival Clause
Specifies which contract obligations continue after termination.
Good Faith Clause
Requires parties to act honestly and fairly when performing contractual obligations.
Subcontracting Clause
Controls whether a party can delegate work to subcontractors.
Data Protection Clause
Sets obligations for handling personal data under privacy laws.
Service Credits Clause
Provides compensation when service levels are not met.
Liquidated Damages Clause
Sets a predetermined amount payable if certain obligations are breached.
Acceptance Testing Clause
Defines testing procedures for verifying deliverables before acceptance.
Indemnification Clause
Requires one party to compensate the other for certain losses or claims.
Non-Reliance Clause
Says a party is not relying on statements outside the written contract.
Representation Clause
Contains statements of fact that one party says are true when entering the contract.
Remedies Clause
Specifies what legal or practical remedies are available if the contract is broken.
Injunctive Relief Clause
Allows a party to seek a court order to stop certain conduct, often without waiting for damages.
Limitation Period Clause
Sets a deadline for bringing legal claims under the contract.
Set-Off Clause
Allows one party to deduct amounts it says are owed from payments otherwise due.
Expense Reimbursement Clause
Explains when one party can charge the other for expenses incurred while performing the contract.
Milestone Payments Clause
Ties payment to completion of defined project stages or deliverables.
Change Request Clause
Sets the process for changing scope, deliverables, timing, or price after the contract starts.
Benchmarking Clause
Allows one party to compare the contract’s price or performance against market standards.
Right to Cure Clause
Gives a party time to fix a breach before stronger remedies apply.
Insurance Clause
Requires one or both parties to carry specified insurance coverage.
Step-In Rights Clause
Allows one party to take over certain performance temporarily if the other fails to perform.
Source Code Escrow Clause
Provides for software source code to be held by a third party and released if defined events occur.
Exclusive Remedy Clause
Makes a specified remedy the only remedy available for certain issues or breaches.
Agency Clause
Clarifies whether either party has authority to act for or bind the other.
Partnership Clause
Addresses whether the relationship should be treated as a partnership or similar joint business arrangement.
Commercially Reasonable Efforts Clause
Requires a party to take reasonable business-minded steps to achieve a goal.
Statement of Work Clause
Sets out the scope, deliverables, milestones, and commercial terms for specific work under the main contract.
Records Retention Clause
Requires certain records to be kept for a defined period and sometimes made available for review.
Escalation Clause
Sets a process for raising unresolved issues to more senior decision-makers before stronger remedies are used.
Key Personnel Clause
Requires certain named individuals to stay involved in the work or sets rules if they are replaced.
Transition Assistance Clause
Requires a party to help transfer services, data, or operations when the contract ends.
Anti-Bribery Clause
Requires parties to comply with anti-bribery and anti-corruption laws and avoid improper payments.
Sanctions Clause
Requires parties not to violate economic sanctions laws or deal with restricted persons or territories in prohibited ways.
Export Control Clause
Requires compliance with export control laws governing transfers of products, technology, software, or technical data.
No Partnership Clause
States that the contract does not create a partnership, joint venture, or similar relationship.
No Third-Party Beneficiaries Clause
Says that only the contracting parties, not outsiders, may enforce the agreement unless expressly stated otherwise.
Publicity Clause
Sets rules for using names, logos, case studies, and public statements about the relationship.
Taxes Clause
Explains which party is responsible for taxes connected with the contract and how invoices should handle them.
Business Continuity Clause
Requires a party to maintain plans and processes to keep critical services running during disruptions.
Disaster Recovery Clause
Sets requirements for restoring systems or services after a serious failure or disaster event.
Data Retention Clause
Defines how long data can or must be kept, and what happens to it when the relationship ends.
Open Source Software Clause
Addresses the use of open source components and related licensing obligations in software or technology deals.