Contract Clauses Explained in Plain English

Browse 200+ sample articles free, written in plain English for businesses and individuals. The full library is for members.

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Restrictive covenants

Non-Dealing Clause

📖 3 min read

This clause simply says you cannot do business with certain parties—usually competitors or specific companies—for a set time after the contract ends. It is considered "low risk" because it is narrow and straightforward; it does not restrict where you

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Restrictive covenants

Non-Solicitation of Customers

📖 3 min read

This clause prevents you from doing business with or contacting your employer's or partner's customers after the relationship ends, usually for a defined period and geographic area. This is considered a "high risk" clause because courts scrutinize it

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Restrictive covenants

Non-Solicitation of Employees

📖 3 min read

This clause stops you from hiring or recruiting employees from your current employer (or business partner) for a set period after you leave or the contract ends. It exists because employers invest time and money training staff, and they want to prote

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Data protection

Purpose Limitation

📖 3 min read

This clause restricts how the data can be used—it must only be used for the specific reason it was collected. If someone gives you their email to receive a monthly report, you cannot later use that email to sell them insurance or pass it to a marketi

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Data protection

Data Minimization

📖 3 min read

This clause requires that only the minimum amount of personal data necessary to achieve a specific purpose is collected and kept. For example, if you're running a newsletter, you only need email addresses—not home addresses, phone numbers, or employm

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Data protection

Data Classification

📖 3 min read

This clause sorts your data into categories based on how sensitive it is (for example: "public," "internal," "confidential," "highly confidential"), and sets different protection rules for each level. It matters because not all data needs the same le

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Data protection

Incident Response Timeline

📖 3 min read

This clause sets deadlines for what happens if your data is stolen, leaked, or corrupted—who gets told, how fast, and what the other company must do to fix it. It matters because delays in reporting breaches can make the damage worse (criminals have

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Data protection

Access Control Policy

📖 3 min read

This clause describes who in the other company can see your data and how they get permission to access it. It matters because the more people with access, the higher the risk of theft, accidental leaks, or misuse—and you're legally responsible if you

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Data protection

Encryption Standard

📖 3 min read

This clause sets the technical method used to scramble your data so only authorized people can read it. It matters because weak encryption is nearly useless—like a lock made of paper—while strong encryption protects data even if someone steals it. Th

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Data protection

Penetration Testing Clause

📖 3 min read

This clause lets the other party (or a hired expert) deliberately try to break into your computer systems to find security weaknesses. It matters because without clear rules, someone could damage your systems while "testing" them, and you'd have no l

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