CONTRACT TERMS 2

Litigation – the conduct of court proceedings to resolve a dispute.

Mala Fide – Latin, meaning in bad faith, opposite of Bona Fide.

Mediation – a form of Alternative Dispute Resolution where an independent person meets with the Parties to a contract to help them formulate their own resolution to a conflict.

Misrepresentation – When facts presented during contract negotiations are found to be false. If this was done intentionally, it is seen as fraud or negligent representation.

Modify – To make partial or minor changes to (something), typically so as to improve it or to make it less extreme.

Notice – A communication in agreed forms by one Party to a Contract to the other Parties, advising or warning about something the other Parties need to be aware of; or may be the notice required to do a certain thing under the contract.

Novation – When the party transfers their rights to someone who was not originally involved in the contract.

Obligation – something which must or must not be done by one or more Parties to a contract.

Offer – is a show of willingness to enter into a contract, in exchange for consideration, made so that the person to whom it is made understands that their acceptance is requested and will close the deal. There is no time limit for acceptance unless the offer has a deadline or is withdrawn.

Party – Any individual, group or organization participating in a contract. 'Parties' has a corresponding meaning.

Penalty – a clause within a contract that seeks to make the counterparty responsible for paying a large sum of money if they breach the contract.

Performance Bond – is a financial guarantee that the terms of a contract will be honored. If one party to a contract cannot complete their obligations, the bond is paid out to the other party to compensate for their damages or costs.

Period­ – The length of time a contract is expected to be in force (see also 'Term').

Pro Tempore (Pro Tem) – Latin, meaning for the time being.

Quotation – is a document that a seller provides to a buyer to offer goods or services at a stated price, under specified conditions.

Receivership – the appointment of a licensed insolvency practitioner to take over the running of a business that cannot meet its financial commitments.

Representations – statements or promises made as a fact by one Party to a contract to another Party to the contract.

Rights – the things a Party to a contract is entitled to do or not do as the case may be.

Security Interest – Refers to a lender's interest in property that the borrower has put up as collateral to secure the loan. The lender holds a security interest in the collateral.

Severability – the allowance a contract for removal or correction of portions of the contract that are incorrectly or illegally drawn up, allowing the remainder of the contract to be valid and enforceable.

Surety – is the company that provides a line of credit to guarantee payment of any claim. They provide a financial guarantee to the obligee that the principal will fulfill their obligations.

Term – either (a) the length of time for which a contract operates (see Period) or (b) any contract clause (see Condition).

Third Party – an individual, group, organization or other legal entity (eg. a company) that is not a Party.

Variation – the method agreed by the Parties to a contract for making changes to the contract after it has been signed. It usually requires that any change to the contract be in writing signed by all Parties.

Void – making a contract unenforceable in law.

Waiver – an intentional surrendering of rights by a Party to a contract. A 'no waiver' clause can be agreed stating that no provision in the contract may be waived, except by means of a writing signed by the Party to the contract against whom a waiver is sought.

Warranties – promises made in a contract. Failure of a warranty results in liability to pay Damages.