8 common contract clauses what they mean

How many times have you had a contract drafted or put in front of you to sign and thought ‘what does any of this actually mean’?

Legal jargon is, quite frankly, no fun whatsoever. If you aren’t a legal professional, it can be tricky figuring out exactly what these mean.

Here at Jamieson Law we’re all about teaching you legal in PLAIN English, so worry no more – here are some common contract clauses you’ve probably come across before, explained:

1) Jurisdiction and governing law – this covers which court hears the dispute if there is one under your contract, and which legal system applies (so it’s super clear which law is applicable)

2) Parties’ obligations – the obligations of the parties involved. Who does what and when, what happens if a party doesn’t uphold their side of the obligation etc.

3) Payment clauses – what fees are due and when they have to be paid by. Not only this, but also the repercussions if they aren’t paid in time, i.e. charging interest – important for both parties

4) Liability – who is liable for what and to what amount. This comes down to if you’re ever (god forbid) sued, you need to put a cap on how much you can be sued if something goes wrong down the line

5) Term – how long the contract lasts. You don’t want to end up stuck in a contract longer than necessary

6) Termination – things can go wrong in business, right? Termination clauses are in place to end the contract if necessary, irrespective how long is left in the agreement. The circumstances should be clearly laid out which cover both parties right to terminate

7) Force Majeure – this should always be included in commercial contracts. It protects parties from circumstances out of their control, which could cause disruption to the contract terms, i.e. natural disasters, or a global pandemic…important in Covid times

8) GDPR clauses – This makes it obvious you comply with GDPR/the necessary data protection regulation. Should mention things like accepting for any legislation changes – think Brexit, you want to make it clear whatever legislation supersedes will be enforced in the contract

If you’re ever in doubt about a certain clause either in your own contract or a contract you have to sign, get a lawyer to review it for you! We can help de-code your contracts.

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