Clause guide
Expense Reimbursement Clause clause: meaning, risks, and what to negotiate
Explains when one party can charge the other for expenses incurred while performing the contract.
What it means
This clause controls whether travel, software, materials, or other out-of-pocket costs are reimbursed.
Common risks
- • Reimbursable expenses may be too broad.
- • There may be no approval requirement.
- • Unexpected costs can increase the overall deal value.
What to check before signing
- • Which expenses are reimbursable?
- • Is prior written approval required?
- • Are there caps or documentation requirements?
Negotiation ideas
- • Require pre-approval for non-routine expenses.
- • Set cost caps.
- • Require receipts and supporting detail.
Example clause
“Client shall reimburse Contractor for pre-approved reasonable out-of-pocket expenses supported by receipts.”
Frequently asked questions
Why does an expense reimbursement clause matter?
It controls whether additional costs can be passed on beyond the contract price.
Related clauses
Want help reviewing the full contract?
A single clause rarely tells the whole story. Scan the full agreement to spot risks, missing protections, and negotiation points across the whole document.