Contract Terminology Glossary

Aa

Ambiguous Contract

Contract ambiguity arises when vague, undefined, or contradictory terms open the door to multiple interpretations. When the language of an agreement—the very tool designed to present misunderstandings—is unclear, it can leave everyone involved with...

Approval

The contract approval process is where a drafted agreement gets the green light from all the necessary parties. This includes various departments within your organization or any other key stakeholders involved.

Bb

Breach of Contract

A breach of contract occurs when one party fails to fulfill their obligations as outlined in a legally binding agreement. This failure can take several forms, ranging from not performing certain duties at all to incomplete or improper fulfillment of th...

Cc

Compliance

Contract compliance refers to the rigorous process of all parties in a contractual agreement adhering to its terms from start to finish. This involves an understanding and alignment of expectations, deliverables, timelines, and legal requirements.

Contract Review

Contract review is the process in which you read, understand, and revise your contracts to meet the requirements of a business negotiation.

Dd

Digital Contracting

Digital contracting refers to the creation, negotiation, signing, and management of contracts through electronic means. It leverages digital tools and technologies to streamline the entire contract lifecycle, from drafting, reviewing and negotiation to...

Disputes

Contract disputes arise when two or more parties disagree on the terms, obligations, or performance outlined in a contract. Disputes occur at any stage—from the initial signing to the contract’s execution and even after the contract has expired.

Ee

Efficient Contracting

Contracts are often complex and time-consuming, but advances in AI technology in recent years offer alternatives to streamline the contract review process.

Gg

GMP

A Guaranteed Maximum Price (GMP) contract is a contract that sets a defined cost limit for a construction project. Basically, a GMP contract assures the project owner that the final cost won’t exceed an agreed-upon ceiling price.

Ll

Lump Sum

a lump sum contract is a type of agreement where the contractor promises to complete the project for a set price. This can be great for both sides, as the client knows exactly what they’ll pay, and the contractor knows exactly what they’ll earn.

Nn

Negotiation

In a world where negotiations can make or break a deal, mastering your contract negotiation skills is the move you’ve been searching for, to tip the balance in your favor. Negotiation is a key to foster a healthy business relationship, get the best o...

Oo

Obligation

Contractual obligations define the responsibilities and duties within business agreements that each party is, well, contractually obligated to fulfill. understanding these obligations is crucial for drafting contracts, reviewing agreements, and managin...

Pp

Playbook

A contract playbook is a central resource designed to streamline and standardize how your company negotiates, reviews and approves contracts. Think of it as a rulebook for your contracting process. It compiles a wealth of information on various stages,...

Rr

Redlining

Redlines are the terms that the reviewing party would like to amend, either by removing the term, editing the term, or inserting an entirely new term altogether.

Risks

Contract risk refers to the potential for loss or negative outcomes resulting from the terms and conditions within a contract, or from the failure of parties to comply with these terms. This risk can arise from a variety of sources—financial obligati...

Tt

T&M contract

T&M contract is a flexible agreement between a client and a contractor. Unlike a fixed-price contract, it doesn’t set a single upfront cost for the entire project. Instead, it outlines the project’s general scope and establishes two key components ...

Termination

Contracts typically include specific clauses outlining how and when the agreement can be terminated. These clauses act as pre-determined exit signs on the business roadmap, guiding both parties through the termination process.

Terms

Contract terms are the essential elements that define the rights, responsibilities, and expectations between parties. Each contractual term functions as a guiding point, specifying the actions each party must take and the standards they must meet.