100 Contract Terminologies with definition

Arbitration

- Arbitration is a form of Alternative Dispute Resolution (ADR) in

which the parties work out a disputed issue without going to
court. An impartial third party, known as an Arbitrator, is chosen
by the parties to listen to their case and make a decision. The
process is similar to a trial, but the decision is usually final and
binding.

Addemdum

- are attachments to original contracts change the contract's initial

terms and conditions. Addendums can be used to update
ordinary contracts, make revisions if circumstances have
changed since the original contract was signed, or if the original
signers agree on a different arrangement.
- used to clarify and add things that were not initially part of the
original contract or agreement.

Additional Contract Time

- refers to an extension granted to a party under a contract to

complete their contractual obligations beyond the originally
agreed-upon deadline. This extension of time may be granted
due to various reasons, such as unforeseen delays, changes in
project scope, force majeure events, or other circumstances
beyond the control of the party seeking the extension.
- may be awarded to a contractor if they face unanticipated delays
in the construction process, such as adverse weather, material
shortages, or delays caused by other subcontractors. Any
requirements for notice, proof of delays, and approval processes,
 as well as the circumstances under which extra contract time
may be given, are usually outlined in the contract.

Advance Payment

- An advance payment occurs when you pay for a good or service

ahead of its normal schedule, even before you receive it. Sellers
often require advance payments as a form of protection against
nonpayment or to cover their out-of-pocket costs for providing
the service or product.

Alternative

- refers to a choice or possibility that differs from the usual or

conventional option.

Amendment

- is an addition to or modification to a contract's terms. An addition

or alteration that essentially preserves the original text is called
an amendment.
- is a paper or documents that serve as a contract's immediate
extension. A contract may be extremely brief at times, for
example, if it is modeled after a framework agreement or is a
duplicate of an earlier agreement.

Annex

- To add to; to unite; to attach one thing permanently to another.

The word expresses the idea of joining a smaller or subordinate
thing with another, larger, or of higher importance.

Bankruptcy

- refers to the state of being bankrupt. It occurs when an individual

or business is unable to repay outstanding debts or obligations.
Bona Fide

- derived from Latin, literally means “with good faith.”

- When applied to business deals and the like, it stresses the
absence of fraud or deception. A bona fide sale of securities is
an entirely aboveboard transaction. Outside of business and law,
bona fide implies mere sincerity and earnestness.

Breach of Contract

- occurs when one party fails to uphold the agreed-upon terms

and conditions of a legally binding contract. This violation can
take various forms, ranging from minor infractions like late
payments to more serious breaches, such as failing to deliver a
promised asset.

Bid

- is an offer to perform a contract for work, labor, or supplying

materials at a specified price. A bid does not create rights in
either the offeror or the offeree until the offeree voluntarily
accepts the bid.
- refers to an offer made in response to a request or invitation to
bid issued by a contracting authority, such as a government
agency or a private company, by a potential contractor, supplier,
or service provider. Competitive offers for the delivery of
commodities, services, or building projects are frequently sought
through bids in procurement procedures.

Bid Security

- refers to a type of assurance offered by a bidder in response to a

request for proposals or bids made by a contracting authority,
which could be a commercial or public organization.
 - a financial guarantee of the bidder's honesty and determination
to comply with the solicitation process' conditions, bid security is
provided.

Certificate of Payment

- a formal document signed by the Authority that, for each Trade

Contractor Application for Payment, specifies the Trade
Contractor's entitlement to payment in full.

Change Notice

- a formal written letter outlining updates or changes to a system,

procedure, or product.
- Ensuring that all relevant parties are informed of the adjustments
and the implications is crucial, and it is a necessary instrument
for managing and tracking changes.

Clause

- is a specific point or provision in a law or legal document.

- It might be an autonomous paragraph, section, or article that
covers any subject related to the document it is part of.

Commencement Date

- is the date on which a legal agreement or contract enters into

force. Stated otherwise, a commencement date designates the
point at which a contract formally starts and binds the parties.

Confidential

- describes something that is not meant for public knowledge and

should be treated with discretion.
- It often applies to sensitive or restricted information in formal,
business, or military contexts.
Condition

- It often applies to sensitive or restricted information in formal,

business, or military contexts.

Contract

- is a binding agreement between two or more parties, especially

one that is legally enforceable.

Duration

- refers to the length of time during which something continues or

exists.

Deed

- It serves as official proof of various agreements or ownership

rights.

Default

- occurs when someone does not meet their legal responsibilities

or fails to perform an action required by law or a contract.

Extra Judicial

- refers to actions or statements that occur outside the regular

legal proceedings.

Excuse

- refers to an explanation stated in court as the grounds for

exempting oneself from liability.

Fortuitous
 - A fortuitous event is an event that cannot be foreseen or,
although foreseeable, cannot be avoided. It’s not sufficient to
label an event as fortuitous unless it is genuinely impossible to
predict or prevent it.

General Specification

- It involves describing or identifying something precisely or stating

a precise requirement.

Guarantor

- is an individual or entity that assumes responsibility for the

repayment of a debt or the fulfillment of an obligation if the
primary debtor fails to do so.

Indemnity

- an agreement by one party (the indemnifying party) to bear the

cost of certain losses or liabilities incurred by another party (the
indemnified party) in certain circumstances. An indemnity will
typically give rise to a right to an on-demand payment without the
need to prove a breach of contract.

Injunction

- is a court order that compels an individual to perform a specific

act or restrains them from performing a particular action.

Insurance

- is an arrangement or contract in which one party agrees to

indemnify another against a predefined category of risks in
exchange for a premium.

Liability
 - The right of an injured party to hold someone responsible for
their injuries or damages due to wrongful actions.

Liquidated Damages

- are monetary awards specified in a contract to compensate one

party if the other party breaches the contract.

Litigation

- refers to the act or process of bringing or contesting a legal

action in court. Whether someone initiates a lawsuit (the
“plaintiff”) or responds to one, they are engaging in litigation.

Mala fide

- a Latin phrase meaning “in bad faith”, is commonly used in legal

contexts.
- It describes someone who has deliberately acted in a dishonest
or malicious way. When an action is labeled as mala fide, it
implies that the person or entity involved was not acting honestly,
fairly, or in accordance with the law.

Mediation

- is a method of alternative dispute resolution (ADR). It provides

an alternative to resolving a claim through litigation, which
involves using the court system and allowing a judge or jury to
resolve a dispute.

Obligation

- is one branch of private law under the civil law legal system and
so-called "mixed" legal systems. It is the body of rules that
organizes and regulates the rights and duties arising between
individuals.
Period

- It consists in a space or length of time upon the arrival of which,

the demand ability or extinguishment of an obligation is
determined.

Pro Tempore

- a Latin phrase that means “for the time being.”

- The term is usually used with an office to note that the individual
serving in that role is there temporarily.

Performance Security

- is a type of guarantee that is typically provided by a financial

institution on behalf of a contractor. The purpose of the security
is to protect the owner/oblige against financial loss if the
contractor fails to perform its obligations under the contract.

Quotation

- refers to a verbatim transcription of part of a literary composition

into another book or writing. The quotation of an authority is
produced to a court to convince the judge the exact language of
the authority in support of an argument advanced.

Quasi Delict

- is used in civil law to refer to a negligent act or omission which

results in harm or damage to an individual or to the property of
another. The person causing the harm or damage may do so
without any malice, but may nonetheless be found at fault as a
result of being negligent and/or imprudent.

Receivership
 - the judicial appointment of a person, a receiver, to collect and
conserve certain assets and to make distributions in accordance
with judicial authorization.

Representation

- A statement of fact, oral or in writing, made by one party to

another, before or at the time of entering into a contract, of some
matter or circumstance relating to it.

Retention

- A species of lien; the right to retain possession of a chattel until

the lienor is satisfied of his claim upon the article itself or its
owner.

Severability

- refers to a provision in a contract or piece of legislation which

states that if some of the terms are held to be illegal or otherwise
unenforceable, the remainder should still apply.

Substantial performance

- is a contract law doctrine that allows parties to be paid under a

contract and to retain the benefit of a contract even if they
technically failed to comply with the precise terms of the
agreement.

Slippage

- The difference in a price when the broker is told to execute an

order and the order actually takes place.

Term
 - Terms of a Contract, the conditions and warranties agreed upon
between parties to the contract. Contract terms may be verbal or
expressed in writing. Conditions are those terms which are so
important that one or more of the parties would not enter into the
contract without them.

Third-party

- is a person or group involved in a transaction or dispute who is

independent of the two primary individuals involved.

Term of reference

- A Terms of Reference (TOR) document establishes a particular

board or committee and details the specific authority that board
or committee has to oversee a delegated area of responsibility.

Void

- Having no legal effect from the start. Thus, a void contract is

invalid from the start of its purported closing (having no legal
effect, it does not change the legal relationship between the
parties involved).

Variation

- A change to the nature, quantity or quality of work to be

undertaken, made after execution of the contract and after the
price is agreed.

Waver

- the intentional and voluntary giving up of something, such as a

right, either by an express statement or by conduct (such as not
enforcing a right). The problem which may arise is that a waiver
may be interpreted as giving up the right to enforce the same
right in the future.
Warranties

- is a promise, assurance, or statement made by the warrantor

regarding the existence or accuracy of specific facts or the
condition, quality, quantity, or nature of a good or property.

Contract bond

- refers to a type of surety bond that is obtained by contractors to

provide financial assurance to project owners that the contractor
will fulfill their contractual obligations.
- are commonly used in the construction industry to protect project
owners against financial losses resulting from a contractor's
failure to complete a project or failure to meet contractual
requirements.

Contract Price

- refers to the agreed-upon amount of compensation that one

party (the buyer or client) agrees to pay to another party (the
seller or contractor) in exchange for goods, services, or
performance as outlined in the contract.
- is a fundamental element of the contract and serves as the basis
for determining the financial obligations of the parties.

Contracting Parties

- refers to the individuals or entities that are entering into the

contract and are bound by its terms and conditions.

Counterpart

- an object or person having a position or carrying out a task that is

equivalent to that of an object or person somewhere else.
Damages

- refers to the monetary compensation awarded to a party who

has suffered a loss or injury as a result of the breach of a
contract or the wrongful act of another party.
- are a common remedy available to parties in contract law to
compensate them for the harm caused by the breach of contract
and to place them in the position they would have been in had
the contract been properly performed.

Deed

- is a legal document that gives the owner of real estate or another

type of property asset ownership.
- An asset's title is handed over to a new owner by a deed, which
is often documented in the county clerk's office in the area.

Default

refers to circumstances in which one party does not carry out its
responsibilities or duties in accordance with the terms of the
contract.

Delay Penalty

the penalty imposed as a result of unreasonable delays in right-

of- way excavation, obstruction, patching, or restoration as
established by permit.

Deliverables

- are final goods or services that a supplier of goods or services

has a duty to deliver to a client and for which the client will pay.
- The amount to be paid for each deliverable under the contract
must be specified in the contract (or proposal, depending on the
phase you are at) for each deliverable.
Discharge by Performance

- is a concept in contract law that refers to the fulfillment of the

obligations and terms of a contract by the parties involved.
- In other words, when both parties have completed their duties as
required by the contract, the contract is considered discharged or
fulfilled through performance.

Discharge of Contract

- refers to the termination or conclusion of the contractual

obligations and duties between the parties involved in the
contract.
- When a contract is discharged, the parties are released from
their respective obligations under the contract, and the contract
is no longer enforceable.

Dispute Resolution

- refers to the process by which parties resolve conflicts,

disagreements, or disputes that arise in the course of their
contractual relationship.
- are often included in contracts to provide a structured and
orderly process for addressing disputes and avoiding costly and
time-consuming litigation.

Duration

- refers to the period of time during which the contract remains in

effect or is valid.
- specifies the start date and end date of the contractual
relationship between the parties, as well as any conditions or
events that may affect the duration of the contract.
Encumbrance

- refers to any legal claim, lien, charge, or liability that affects or

restricts the title or use of a property or asset.
- arises from various sources and may have implications for the
ownership, transfer, or use of the property or asset.

Evidence of Working Capital

- refers to documentation or proof provided by a party in a legal

contract to demonstrate that they have sufficient liquid assets or
resources to finance their ongoing operations and meet their
short-term financial obligations.
- represents the difference between a company's current assets
(such as cash, accounts receivable, and inventory) and its
current liabilities.

Excuse

- accounts payable and short-term debt) and is a measure of a

company's liquidity and financial health.
- Something that forgives performance and bars enforcement of a
Contract

Extrajudicial

- refers to actions or processes that occur outside of the formal

judicial system, typically involving resolution or settlement of
disputes without the need for court intervention or litigation.
- may involve negotiation, mediation, arbitration, or other
alternative dispute resolution methods to resolve conflicts or
disagreements between parties.

Fixed Price Contract

- is a type of legal contract in which the parties agree to a set price

for the goods or services to be provided, and this price remains
 unchanged regardless of changes in the cost of materials, labor,
or other expenses incurred by the seller or contractor.
- the price is predetermined and does not fluctuate based on
actual costs or performance.

Force Majure

- is derived from French, meaning "superior force."

- is a legal concept often included in contracts that allows parties
to temporarily suspend or excuse their performance of
contractual obligations when unforeseen circumstances beyond
their control prevent them from fulfilling their obligations.

Fortuitous

- happening or produced by chance; accidental

- are unforeseen and unexpected, and they are typically beyond
the control of the parties to the contract.

General Specification

- is used to describe a portion or document in a contract that lists

the general standards, requirements, and details that apply to a
project or scope of work.

Gravel

- refers to small, loose stones or rock fragments typically used in

construction, landscaping, road building, and other applications.
- is often categorized by its size and shape, with common types
including crushed stone, pea gravel, and gravel aggregates.

Guarantor

A party who agrees to be responsible for the debt or obligations

of another party if that party fails to fulfill its obligations.
Imposed

Placed upon or required by authority or law.

Impossibility of Performance

A situation in which a party is unable to fulfill its contractual

obligations due to circumstances beyond its control, such as
natural disasters or government actions.

Indemnity

refers to a contractual obligation by which one party agrees to

compensate or reimburse another party for certain losses,
damages, liabilities, or expenses incurred as a result of specified
risks, claims, or events.

Retention

- refers to the act of withholding a portion of payment owed to a

contractor or service provider until certain conditions are met,
such as completion of the work or resolution of any defects or
issues

Right of Limit

A contractual provision that limits the liability of one or both

parties under certain circumstances.

Rights

- Legal entitlements or privileges granted to individuals or entities

under a contract or by law.

Severabilty

- also known by the Latin term "salvatorius,"

 - is a provision in a piece of legislation or a contract that allows the
remainder of the legislation's or contract's terms to remain
effective, even if one or more of its other terms or provisions are
found to be unenforceable or illegal.

Slippage

typically refers to a situation where there is a delay or deviation

from the originally agreed-upon schedule or timeline for the
performance of the contract

Substantial Performance

- is a legal concept that refers to the degree of completion or

fulfillment of contractual obligations that is sufficient to warrant
the payment of contract price or consideration, even if the
performance is not perfect or complete.

Variation

- refers to a change or modification made to the terms, scope, or

requirements of the contract after it has been agreed upon and
executed by the parties.
- may involve alterations to the scope of work, specifications,
deliverables, timelines, or other contractual provisions, and they
may arise due to changing circumstances, evolving project
requirements, or the need to address unforeseen issues.

Voids

- refer to provisions, clauses, or entire contracts that are

considered legally invalid or unenforceable.
- A contract may be void if it violates certain legal requirements,
such as lacking consideration, being against public policy, or
involving illegal activities.
 - When a contract is void, it is treated as if it never existed, and
the parties are not bound by its terms.

Warranties

- are assurances or guarantees made by one party to another

regarding the quality, condition, or performance of goods or
services provided under the contract.
- may be express (explicitly stated in the contract) or implied
(implied by law based on the nature of the transaction or the
parties' conduct).