Contract Terms Glossary: Everything You Need to Know
A contract terms glossary is a short dictionary of contract terms.3 min read
A contract terms glossary is a short dictionary of contract terms.
Abeyance — Momentary suspension of activity.
Abscond — To run away to avoid prosecution.
Accord and satisfaction — An agreement that puts an end to obligations and settles a legal dispute between two or more entities.
Acquiescence — An intentional or unintentional action or inaction that legally binds a person to an obligation.
Bad faith — Plan to take advantage of by deceit.
Bid — The offer a supplier makes, for consideration, to provide services or goods.
Bill of material — A list of a product's component parts and materials.
Boilerplate — Standard clauses used generally as a type of template for contracts. Examples are:
- Entire agreement clauses.
- Arbitration clauses.
- Majeure clauses.
Breach of contract — The failure of a party to satisfy the terms or conditions of a contract.
Call-off agreements — Canceled contracts.
Collateral — Property put forth to guarantee a loan.
Copyright — The legal and assignable right an originator has, for a fixed number of years, to claim exclusive ownership of and take credit for an intellectual property.
Debt — An amount of money, goods, or services owed.
Debtor — A person who borrowed money, goods, or services from another person known as the creditor.
Debriefing — Explaining to an unsuccessful bidder why they were not awarded a contract.
Employment contract — A legally binding agreement between an employer and an employee.
End-user — Consumer.
Enquiry — An invitation to suppliers to bid according to specification.
Force Majeure — A clause that excuses a party when they fail to do their contractual duties owing to circumstances beyond their control.
Guarantee — An agreement that allows one party to provide assurance of a second party's loan duty to a third-party.
Invitation to treat — A call for quotation issued by a buyer.
Intellectual property rights — The exclusive, legal rights of the originators of intellectual properties.
Joint venture — An agreement that allows two or more independent businesses to run a common business, share its costs, profits, and losses.
Liability — The subjection of a liable entity to legal obligations.
Liquidation — The official disbanding of a company or business partnership.
Misrepresentation — The deception of one party by another through false statements.
Obligation — A requirement established legally in a contract or as a result of damage done to some entity or property.
Offer — A clearly stated request for the possible supply of goods or services for a defined monetary reward, which becomes a legally binding contract when granted.
Parent company — A company that owns more than 50 percent of the right to vote or controls the board of directors of another company.
Partnership — The joining of two or more organizations to run a business together.
Patent — A license or authority exclusively conferred on an inventor for their invention, allowing them the monopoly of producing, marketing, profiting from, and taking credit for it for a defined period.
Quorum — The least number of people required at a meeting in order to make binding decisions.
Quote — A supplier's offer in response to a buyer's request.
Recitals — The introductory paragraphs of a written contract, which serve as an overview of the contract.
Rescind — To cancel a contract.
Restrictive covenant — An agreement between parties not to work with competitors within a defined period in the agreement.
Settlement discount — A discounted price offered by a supplier to a buyer for immediate clearance of invoices.
Shareholders' agreement — An agreement between shareholders on the running of their company.
Stock turn — The amount of use the total stockholding of an item gets annually, calculated by dividing the sum of yearly usage by the average stockholding.
Trademark — A name or logo registered and protected by law.
Underwriter — Someone who signs as a party to a contract.
Variation of price — Terms of payment that provide for an alteration in price caused by defined events such as an upsurge in the volume of sales above a defined limit.
Waiver — A known right or privilege that's intentionally let go of.
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