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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Insurance

Public Liability Level

📖 3 min read

This clause sets how much the vendor will pay if their software causes physical injury or property damage—for example, if a bug in their system causes your office equipment to malfunction and injures someone. Public liability is different from profes

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Insurance

Professional Indemnity Level

📖 3 min read

This clause sets how much money the vendor will pay if their software causes you professional or financial harm—for example, if a bug causes you to give wrong advice to your clients and they sue you. "Indemnity" means the vendor agrees to cover your

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Vendor

Defect Rate Target

📖 3 min read

This clause sets a maximum percentage of defective items the vendor can deliver—for example, "no more than 2% of parts can be faulty." If defects exceed this target, there are usually financial penalties or the buyer can reject the shipment. This is

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Vendor

Quality Audit Right

📖 3 min read

This clause gives one party (usually the buyer) the right to inspect or test the other party's work, products, or services to check they meet agreed standards. Quality audits are low-risk because they're just about checking things—they don't penalize

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Employment

Garden Leave

📖 3 min read

Garden leave is a period after you resign or are fired when you're still employed and paid, but you don't have to work and can't work for competitors. It typically lasts weeks or months and is used by employers to stop you immediately helping a rival

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Confidentiality

Transaction Confidentiality

📖 3 min read

This clause says you cannot tell anyone outside the deal about the terms, price, or other details of what you're buying or selling. It matters because the price you pay (or receive) is commercially sensitive—if competitors know it, they can undercut

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Confidentiality

Press Release Approval

📖 3 min read

This clause requires you to get written permission from the other party before you can tell the public (through a press release or media) anything about the deal. It matters because the other party controls the narrative and timing of the announcemen

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Confidentiality

Advisor Confidentiality

📖 3 min read

This clause stops you from telling other people what your advisors (lawyers, accountants, consultants) told you during the deal. It matters because the other party wants to keep their business secrets hidden—if you mention their advisor's advice to c

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Confidentiality

Affiliate Confidentiality

📖 3 min read

This clause extends confidentiality obligations to the other party's related companies (subsidiaries, parent companies, sister companies). Without this clause, a company could technically share your secrets with its affiliate and claim the affiliate

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Confidentiality

Confidentiality Marking Requirement

📖 3 min read

This clause requires you to mark documents "Confidential" or use similar labels so the other party knows information is protected. Without this requirement, disputes arise about whether something was actually meant to be confidential. The clause crea

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