A lump sum damages clause sets the fixed amount (or the calculation of that amount) agreed by the parties that must be paid in the event of a breach by one of the parties. If the number is considered punitive by the courts, the clause is unenforceable, so it must always be ensured that the clause contains a reasonable number that reflects the contractual context and cannot be considered a sanction. A lightening clause limits a party`s liability for damages suffered during the performance of the contractual conditions. For example, a dry cleaning company may contain an unloading clause that would exempt it if a garment is damaged during the dry cleaning process. They are normally inserted at the end of a commercial contract. But they can appear anywhere in a contract. Small changes in the wording of a default boilerplate sentence can make a dramatic difference to the legal effect of the contract, as you can see in the list of following examples. The way these clauses are read is therefore not static: they then appear in different treaties with different terms, and they may again have a different meaning. How they are read depends on the terms of the contract and the substantive facts of the case.
Slight differences in wording can make the difference between the legal meaning and legal effect of a contract. Many agreements require prohibitions on competition and/or bans on debauchery. The non-compete clause prevents a party from competing with the other party by using information from its previous relationship for a specified period of time. The non-debauchery clause generally prevents one party from taking over the other party`s employees, customers or other business relationships for a specified period of time. Navigating through a commercial contract and assessing the legal and practical implications can be a daunting task. This article provides a snapshot of the most important clauses typically found in a standard business contract and examines the impact of these clauses on contracting parties. A compensation provision usually comes into effect when a party to the agreement violates the rights of another natural or legal person, usually a non-party to the agreement. For example, if Party A and Part B sign a contract and Party A violates The rights of Party C, Party A will generally agree, through the indemnification provision, to reimburse all costs incurred by Party B as a result of Party A`s missteps. .