7. Terms of a Contract

Condition precedent

An event or circumstance that, until it occurs, suspends the parties' obligations to perform their contractual duties.

Condition subsequent

An event or circumstance that, when it occurs, brings an existing contract to an end.

Contractual quantum meruit

An award granting one party a reasonable sum for the goods or services provided under a contract.

Entire contract clause

A provision in which the parties agree that their written agreement represents the complete and final understanding between them.

Exemption clause

A contractual term that identifies specific events causing loss for which there is no legal liability.

Express term

A contractual provision that explicitly states an agreed-upon promise.

Implied term

A provision not expressly stated in a contract, but deemed necessary by law or circumstance to give effect to the parties' intention.

Limitation of liability clause

A provision that caps or restricts liability for breach to something less than would otherwise be legally recoverable.

Liquidated damages clause

A contractual provision specifying a pre-determined sum that one party must pay to the other in the event of a breach.

Parol evidence rule

A legal rule that limits the outside evidence a party can introduce concerning the contents or meaning of a written contract.

Penalty clause

An unenforceable contractual provision setting an exorbitant, punitive sum that one party must pay to the other upon a breach.

Rules of construction

Guiding legal principles used by courts for interpreting and determining the meaning of contractual terms.