Contract Glossary

Plain-English definitions of the most important contract and legal terms. No law degree needed.

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Assignment Clause — An assignment clause governs whether and how a party can transfer its rights and obligations under a contract to a third party.
Breach of Contract — A breach of contract occurs when one party fails to fulfill its obligations under a contract without a lawful excuse.
Confidentiality Clause — A confidentiality clause obligates one or both parties to protect sensitive information shared during the business relationship.
Force Majeure — Force majeure is a contract clause that frees both parties from obligation when an extraordinary event beyond their control prevents performance.
Governing Law — A governing law clause specifies which jurisdiction's laws will be used to interpret and enforce the contract.
Indemnification — Indemnification is a contractual obligation where one party agrees to compensate another for losses, damages, or liabilities arising from specific events or actions.
Intellectual Property Assignment — An IP assignment clause transfers ownership of inventions, creative works, or other IP from one party to another.
Limitation of Liability — A limitation of liability clause caps the maximum amount one party can be required to pay the other for damages arising from the contract.
Liquidated Damages — Liquidated damages are a predetermined amount of money that a breaching party must pay if they fail to perform their contractual obligations.
Non-Compete Clause — A non-compete clause restricts a party from engaging in competing business activities for a specified period and within a defined geographic area.
Termination Clause — A termination clause specifies the conditions under which a contract can be ended before its natural expiration date.
Warranty Clause — A warranty clause is a promise by one party about the quality, condition, or performance of goods, services, or other contract subject matter.