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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Commercial

Auto-Renewal Clause

📖 3 min read

This clause automatically extends your contract for another term (often a year) unless you actively notify the other party before a deadline—sometimes 30 or 60 days before expiry. Many people forget to cancel and suddenly find themselves locked in fo

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Restrictive covenants

Non-Compete Overreach

📖 3 min read

This clause prevents you from working for competitors or starting a competing business for a set time period (often 1-5 years) after the contract ends. Courts will only enforce non-competes if they're "reasonable" in scope, geography, and duration—bu

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Commercial

Unilateral Amendment

📖 3 min read

This clause lets one party (usually the bigger, stronger party) change the contract terms whenever they want, without your agreement. This is high-risk because it removes your legal certainty: the deal you signed today might be completely different t

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Commercial

Payment Net 60+

📖 3 min read

This clause says you won't get paid until 60+ days after you've delivered the work (or sometimes after the invoice date). This creates cash flow problems: you've spent money doing the work, but won't see payment for 2+ months. In the UK and US, there

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Data protection

Data Privacy Gap

📖 3 min read

This clause fails to clearly state who owns customer data, how it will be protected, or what happens to it when the contract ends. This is high-risk because UK GDPR and US state privacy laws (like CCPA in California) impose strict legal duties on any

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Commercial

Vague Scope of Work

📖 3 min read

This clause describes what work you're actually supposed to do, but uses unclear language like "as needed" or "reasonable efforts" without defining what those mean. This matters because if a dispute arises, a court will have to guess what you promise

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Liability

Broad Indemnity

📖 3 min read

This clause requires you to pay for and defend the other party against legal claims, even if those claims aren't your fault. For example, an indemnity clause might say you must cover their legal costs if a customer sues them—even if the problem was c

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Intellectual property

IP Assignment

📖 3 min read

This clause transfers ownership of intellectual property (ideas, designs, code, trademarks, patents) you create to the other party—you lose all rights to your own work. For example, if you're a freelance designer and sign an IP assignment clause, the

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Termination

One-Sided Termination

📖 3 min read

This clause allows one party (usually the stronger one) to end the contract whenever they want, but the other party can only exit under strict conditions or with long notice periods. For example, a supplier might be able to cancel with 30 days' notic

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Liability

Uncapped Liability

📖 3 min read

This clause says one party can claim unlimited damages from the other if something goes wrong—with no maximum amount. Normally, courts try to make compensation fair and proportionate to the actual harm, but an uncapped clause removes that protection.

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