Contract terms in plain language.
73 terms from the agreements people actually sign — what each one means, why it matters before you sign, and what it looks like in a real contract sentence.
Contract basics
Consideration
The value each side gives — what makes a promise a contract.
Read the definitionBreach of Contract
Failing to do what the contract requires, without a legal excuse.
Read the definitionWarranty
A promise that something is true or will perform as stated.
Read the definitionAmendment
A written, signed change to an existing contract.
Read the definitionWaiver
Voluntarily giving up a right the contract or law gives you.
Read the definitionNotice
The formal way official communications must be sent under a contract.
Read the definitionEntire Agreement Clause
The written contract is the whole deal — outside promises don't count.
Read the definitionCounterparts
Signing separate copies that together form one contract.
Read the definitionSeverability
If one clause fails, the rest of the contract survives.
Read the definitionAssignment
Transferring your contract rights or duties to someone else.
Read the definitionAuto-Renewal (Evergreen Clause)
The contract renews itself unless you cancel within a set window.
Read the definitionAddendum
A document added to the contract package, usually at or before signing.
Read the definitionExhibit
An attachment the contract incorporates by reference — part of the deal.
Read the definitionRepresentations & Warranties
Statements of fact each party stands behind when signing.
Read the definitionNon-Disclosure Agreement (NDA)
A standalone contract dedicated to keeping shared information secret.
Read the definitionMaster Service Agreement (MSA)
The umbrella contract that governs a series of future projects.
Read the definitionStatement of Work (SOW)
The project-level document defining scope, price, and schedule under an MSA.
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Signing & execution
Electronic Signature
A legally recognized way to sign documents electronically.
Read the definitionNotarization
A notary verifies the signer's identity and completes an official certificate.
Read the definitionWitness Signature
A third party signs to confirm they watched you sign.
Read the definitionAudit Trail
The tamper-evident record of who signed what, when, and how.
Read the definitionEffective Date
The date the contract's rights and obligations actually start.
Read the definitionExecution Copy
The final, ready-to-sign version of the contract.
Read the definitionRedline
A marked-up draft showing every change from the previous version.
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Money & payment
Payment Terms (Net 30)
When payment is due — net 30 means 30 days from the invoice.
Read the definitionLate Fees
The extra charge for paying after the due date.
Read the definitionLiquidated Damages
A pre-agreed dollar amount owed for a specific breach.
Read the definitionPrice Escalation Clause
The contract price adjusts when material or input costs change.
Read the definitionTime and Materials (T&M)
Billing for actual hours and materials instead of a fixed price.
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Risk & responsibility
Indemnification
A promise to cover another party's losses or legal claims.
Read the definitionLimitation of Liability
A cap on how much a party can owe if things go wrong.
Read the definitionForce Majeure
Extraordinary events beyond anyone's control excuse performance.
Read the definitionConfidentiality (NDA)
A duty to keep shared information secret and use it only as agreed.
Read the definitionNon-Compete
A restriction on working for or starting a competing business.
Read the definitionNon-Solicitation
A promise not to poach the other party's clients or employees.
Read the definitionTermination for Convenience
Ending the contract without cause, usually on written notice.
Read the definitionTime Is of the Essence
Deadlines are strict terms — missing one can be a serious breach.
Read the definitionHold Harmless
A promise not to hold the other party responsible for certain losses.
Read the definitionAdditional Insured
Someone added to another party's insurance policy for covered claims.
Read the definitionConsequential Damages
Indirect losses that flow from a breach — like lost profits.
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Disputes & governing law
Dispute Resolution
The agreed path for handling disagreements under the contract.
Read the definitionArbitration
A private decision-maker resolves the dispute instead of a court.
Read the definitionMediation
A neutral facilitator helps the parties settle — nobody is forced.
Read the definitionGoverning Law
Which state's law is used to interpret the contract.
Read the definitionJurisdiction & Venue
Which courts, in which place, hear any dispute.
Read the definitionRight to Cure
A chance to fix a default before the other side can act on it.
Read the definitionPrevailing-Party Attorneys' Fees
The loser of a dispute pays the winner's legal fees.
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Construction
Retainage
A slice of each payment held back until the work is accepted.
Read the definitionChange Order
A signed, written change to a project's scope, price, or schedule.
Read the definitionScope of Work
The detailed description of what work is included — and what isn't.
Read the definitionNotice to Owner
A preliminary notice that preserves a sub's or supplier's lien rights.
Read the definitionLien Waiver
A signed release of lien rights, usually exchanged for payment.
Read the definitionMechanics Lien
A legal claim against property for unpaid construction work or materials.
Read the definitionPay Application
A formal, itemized request for a construction progress payment.
Read the definitionPunch List
The final list of small items to finish or fix before closeout.
Read the definitionSubstantial Completion
The point when the project is usable for its intended purpose.
Read the definitionSchedule of Values
The contract price broken into line items used for progress billing.
Read the definitionSubcontractor
A trade contractor hired by the GC, not by the owner.
Read the definitionGeneral Contractor
The contractor who holds the prime contract and runs the project.
Read the definitionProgress Payment
Periodic payments made as the work advances, not all at the end.
Read the definitionPaid-If-Paid
The sub gets paid only if the owner actually pays the GC.
Read the definitionPaid-When-Paid
The sub's payment is delayed — not eliminated — until the GC is paid.
Read the definitionConditional Lien Waiver
A lien waiver that only takes effect once the payment actually clears.
Read the definitionUnconditional Lien Waiver
A waiver effective immediately on signing — even if payment never clears.
Read the definitionPreliminary Notice
The early notice subs and suppliers send to protect lien rights.
Read the definitionPayment Bond
A surety guarantees subs and suppliers get paid on the project.
Read the definitionPerformance Bond
A surety guarantees the contractor will finish the job as contracted.
Read the definitionSurety
The company that guarantees a contractor's obligations under a bond.
Read the definitionJoint Check Agreement
One check made out to two payees — usually a sub and its supplier.
Read the definitionBack-Charge
Costs deducted from what you're owed for problems attributed to you.
Read the definitionFlow-Down Clause
The prime contract's terms bind the sub, passed down the chain.
Read the definitionNotice of Commencement
The owner's recorded notice that a construction project is starting.
Read the definitionStop Notice
A claim that traps unpaid contract funds before they're disbursed.
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These definitions are general, educational explanations — not legal advice. XOsign provides AI-assisted document tools and does not provide legal advice; consider consulting a qualified attorney for guidance on your specific situation. Requirements vary by state.
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