LEGAL TERMINOLOGY EXPLAINED

Ab initio
A Latin term which means “from the beginning”. You might see a contract referred to
as “void ab initio”. This means it was invalid from the start, for example if the person
who signed it didn’t have the legal right to do so. A contract that’s declared void ab
initio can’t be amended to correct whatever’s wrong with it – it’s treated as if it never
existed at all.
Ex. The marriage of a married man with a separated woman is void ab initio.
Addenda/addendum
An addendum adds new terms to an existing contract, while still keeping all the original
terms in place.
Ex. The contract was amended and there were addenda that were added to the original
terms.
Agreement
Any type of understanding or arrangement reached between two or more parties,
whether in writing or not. An agreement isn’t legally binding though – a contract is a
type of agreement that is legally binding and is enforceable in court. Find out more
about agreement vs contract.
Ex. The deposit agreement entered by the depositor and the bank is a simple loan
agreement.
Alternative dispute resolution (ADR)
A way to resolve a dispute without going to court e.g. by mediation or arbitration. Some
contracts contain a clause saying that if there’s a problem, then the parties should
follow specific ADR processes to fix it.
Ex. ADR is an mode of settling of dispute through out-of-court actions.
Amendments
Changes to a contract that are made after it’s signed. These are almost always done in
writing, and must be agreed and signed by all parties.
Ex. There are changes made in the contract and these are referred to as amendments.
Appendix/appendices

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Appendices usually appear at the end of a contract. They don’t change or affect the
contract’s terms in any way – they just add extra information about it that you need to
know (e.g. share options or employee benefits).
Ex. The documentary evidence of the complaint should be attached as part of the
appendix.

Approval workflow
An approval workflow is a process that allows legal teams to let business users work on
their own contracts, usually from a template, but with safeguards in place so that
before the contract goes to the counterparty, it must be reviewed by legal.
Arbitration
A form of alternative dispute resolution (ADR) to resolve contract disputes without
going to court, using an independent tribunal. Some contracts include arbitration
clauses which say who an arbitrator will be in advance.
Ex. A third party who will decide the case is an arbitrator through the process of
arbitration.
Assignment
Also called “novation”, this is when a party to a contract transfers their rights,
obligations, or liabilities to someone else who wasn’t involved in the original contract.
Ex. When the original owner sold his ownership of the land that is shared with other co-
owners, the buyer has a right thru what is called as assignment.
Authorized signatory
The authorized signatory is the individual or individuals empowered to sign legally
binding contracts on the company's behalf. In early-stage businesses this is usually the
CEO, but as time goes on it will likely be a broader group including key decision-makers
in finance, operations and so on.
Ex. Through an approved resolution, the CEO is the authorized signatory of the loan.
Automated template
An automated template is a master version of the contract, created by the legal team,
from which colleagues can ‘self-serve’ contracts on a case-by-case basis, just changing
a few key fields each time.

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For example, in an NDA template, the majority of the legal obligations for both sides
will usually stay the same. But key details like the name of the counterparty, the length
of the NDA, its effective date, and so on, will need to vary each time.
The legal team owns and controls the template, so they can make sure its terms always
reflect their latest thinking and the commercial position the business wants to take. But
day-to-day, business colleagues can get the contract drafts they need, without needing
their in-house counsel to work on each individual contract.
Bona fide
A Latin term meaning “in good faith”. The law requires that all parties to a contract act
in a bona fide way, i.e. without deception.
Breach of contract
When one party fails to comply with the terms or conditions of a contract they’ve
signed they’ve breached it. This makes a contract void – and they might have to pay
damages to the other people who signed it.
Ex. There is breach of contract when one of the parties of the loan did not abide with
the terms and conditions as agreed upon.
Capitalized words
Sometimes you’ll see words or groups of words with capital letters in a contract like
“Service Provider” or “Effective Date”. This is because those words have a specific
meaning within that contract. You might see the definition after the word or words first
appear in the contract – e.g. “This contract is entered into on 12 April 2021 (the
‘Effective Date’)”. Or they might be in a separate definitions clause.
Caveat emptor
A latin term which means “let the buyer beware”. It means that it’s the buyer’s
responsibility to make sure that the contract they’re signing is what they need.
Consumer protection laws means this doesn’t really apply nowadays.
Ex. There are times when the customer is not always right that he has to be aware of
the products he is buying or the legal term caveat emptor.
Conditional logic
A contract often has 'fallback positions'. These are terms in the contract that the owner
is willing to accept, if the other party pushes back hard in negotiations. In a contract
automation platform like Juro, users can 'bake' these fallback positions into the
template itself, to be included based on a particular trigger being hit.

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For example, if the dollar value of the contract is above a certain amount, the user
might want to bring in a different version of the indemnities clause. Automating this
process using conditional logic means more users in the business are empowered to
carry out contract negotiations.
Conditions
The major terms that form the basis of all contracts. If you don’t comply with these
then you’ve breached your contract.
Consideration
A legal term used to describe payments made for goods or services provided by a
supplier. A consideration doesn’t actually have to be money though – it can be anything
of value that you receive as part of a contract, e.g. equipment or work. Consideration is
one of the fundamental elements of a contract without which the document isn't legally
binding.
Contract automation
Contract automation is the use of software to enable both legal and non-legal teams to
self-serve on routine legal documents, at scale, from within the browser, without
needing to involve lawyers every time.
Contract lifecycle
The contract lifecycle is the entire period for which a contract is relevant. For example,
if a subscription agreement runs for two years, then when this date arrives and the
contract is no longer in force, it has reached the end of its lifecycle. Some contract
management systems use alerts and updates to help users manage obligations and
contract renewals.
Contract management
Contract management software is used to manage the creation, negotiation, signature,
renewal and data analysis of legal contracts. It enables business teams to self-serve,
agree and manage routine contracts at scale from one unified workspace. Contract
management typically refers more to the parts of the process that happen post-
signature.
Contract repository
A contract repository or contract database is the term for the post-signature storage
area that houses all contracts across the business. It should be structured and
searchable, as this will help legal teams to organise contracts as efficiently as possible.
Contract specialist

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A contract specialist, also sometimes referred to as a contract manager, is responsible
for drafting, reviewing, negotiating and managing contracts to drive business growth
and mitigate risk.
Contract workflow
A contract workflow usually refers to the process in place to get a contract from
inception to agreement. Legal teams in high-growth businesses will face an increasing
volume of contracts month on month, so typically look to automate this workflow to
make sure it scales.
Counterpart
A copy of a contract, usually created so everyone involved can have their own.
Counterparty
The other party to a contract. If you're buying, and signing a sales contract, the
counterparty is the seller.
Cure period
If someone breaches their contract, they might have some time to put things right. This
is called a “cure period”.
Damages
Money paid to someone who’s a victim of a breach of contract to compensate them for
their losses.
Deed
A special type of contract that doesn’t include a consideration (i.e. payment) going from
one party to another.
Default
If you’re in default then you’ve failed to do what you said you would in a contract.
Deliverables
The name given to the things one party to a contract has agreed to supply to another.
Digital contracting
Digital contracting is a process that turns the entire contracting lifecycle - not just
signature, or storage, but every stage of the journey - into a data-first, collaborative,
browser-based workflow. This enables everyone in the business to work with contracts
seamlessly - whatever their role.

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eSignature
Electronic signature is the use of a digital impression, markup or element to signify that
the signor agrees to the terms in the contract they’re signing. It can be contrasted with
what was historically called ‘wet signature’, where parties to a contract had to physically
make a mark on a paper contract with a pen.
Some level of electronic signature has been adopted in most of the world. eSignature
can be used to sign documents in various formats: most commonly PDFs, but also Word
documents, spreadsheets, and of course various native browser-based contract
platforms, like Juro.
It can even be used to electronically sign contracts in Salesforce and other CRMs.

Entire agreement
A clause in a contract that says that any other agreements or arrangements made
before no longer apply. It’s also called a “whole agreement”.
Excuse
Sometimes a contract’s condition can be excused, which means that if someone doesn’t
fulfil their contractual obligation, they aren’t in breach of contract.
Exclusion clause
These are clauses in a contract that remove a party’s liability if a particular thing does
or doesn’t happen. Exclusion clauses can be hard to enforce in court unless they’re very
clearly worded. They’re a type of exemption clause.
Exemption clause
Clauses that try to restrict the liability of the party writing the contract for something.
These are split into exclusion clauses and limitation clauses.
Express terms
The terms written in a contract or agreed verbally before or at the time you’re making
your contract (see also implied terms).
Force majeure
A situation described in a contract that might stop someone from carrying out their
contractual duties. If the situation described happens, then that party is excused.
Frustration

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When a contract becomes void because it’s impossible to carry out the terms, through
no fault of anyone who signed it.
Governing law
The laws of the country (or state) that apply to a contract. This is the law a court will
use if there are any disputes about the contract. This could be important if any of the
people signing a contract are based in different countries.
Implied terms
Terms that are implied in a contract by law, custom and practice without actually being
mentioned in writing or verbally (e.g. that you won’t steal from your employer is an
implied term of an employment contract). They can often be overridden by express
terms, although some implied terms in law can’t be overridden at all.
Indemnity
A promise by one party to a contract to compensate another for a loss under particular
circumstances. For example, if a shipment of goods is lost at sea, a supplier might
agree to pay an indemnity to the buyer for this.
Injunction
A court order that one party to a contract can get to make another party do (or stop
doing) a particular thing that breaks their contract.
Insolvency
When someone can’t pay their debts they’re insolvent.
Integration
Integration is a feature of contract management software whereby other common
software packages work in conjunction with the contract platform. For example, a
Salesforce user can use an integration to create a contract directly in Salesforce,
without having to move to another system. This might be through an out-of-the-box
integration, or by using the API.
Intellectual property rights (IPR)
Legal rights which say who owns intellectual, industrial, or artistic work – so that’s
things like designs, copyright, and patents.
Inter alia
A latin term which translates as “among other things”. It basically means “including, but
not limited to”, and is often used in contracts to show that an example given is just one

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of a few e.g. “The buyer shall abide by relevant laws and regulations including, inter
alia, data protection laws and intellectual property laws”.
Joint and several liability
In a contract where separate parties are working together as partners, they’re
responsible for carrying out their contractual obligations both jointly and individually.
Jurisdiction
If there’s a dispute about a contract, the “jurisdiction” is the place where someone must
bring court proceedings.
Legal design
Legal design is the application of design thinking to legal processes and documents. It
means starting with the end-user - frequently, not a lawyer - and working backwards
from their needs, rather than imposing arbitrary elements onto them.
As the original legal design guru, Margaret Hagan, puts it:
Business users want usable contracts that achieve the maximum operational efficiency,
with reasonable risk allocation, at an acceptable cost. They need to know what the
contract requires them to do, where, and when. Your lawyers’ eyes might see a
contract as legally perfect, built on such nuanced and sophisticated language as to be a
work of art; but if the business users are bamboozled by dense jargon and complexity,
the contract is failing in its primary duty.
Liability
If someone breaches a contract, their liability is their legal obligation to compensate
another party for any harm this causes them.
Limitation clause
A type of exemption clause that sets a maximum amount of damages that someone will
have to pay if they breach a part of their contract.
Limited liability
This is when someone’s financial liability for breaching a contract is limited to a fixed
sum.
Liquidated damages
An amount of money agreed in a contract for damages that one party can get if the
other breaches it. These often appear in building contracts to compensate someone if
the builder doesn’t finish a job on time.

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Litigation
The process of taking legal action to resolve a dispute.
Mala fide
A Latin term meaning “in bad faith”. It’s the opposite of bona fide.
Mass actions
For the authorized signatory on a high-volume contract, like an NDA or MSA (master
services agreement), manually signing 50 contracts is a waste of their time. Mass
actions allow the signatory to do things like sign or approve multiple contracts with a
single click, saving time and removing bottlenecks.
Material breach
A serious violation of the terms of a contract. It usually only harms one of the parties to
the contract (although it can be both if it makes fulfilling the terms of the contract
almost impossible). A material breach might mean the non-breaching party is excused
from their contractual duties and can try to claim damages.
Mediation
A form of alternative dispute resolution (ADR) to resolve contract disputes without
going to court. An independent person meets with the parties to a contract to help
them come up with a solution to a conflict.

Misrepresentation
If the statements of fact (called representations) you make during contractual
negotiations are shown to be false after you sign a contract, you could be accused of
misrepresentation. If you knew or should have known that these were fake, it’s called
fraudulent or negligent representation; if you didn’t, then it’s innocent
misrepresentation.
Mutatis mutandis
A Latin term meaning “by changing those things which need to be changed”. It’s used
in contracts to let people know that a new clause has the same meaning as a clause in
a previous contract with some stated changes. For example, if you’re signing a renewal
contract for a service, it might use mutatis mutandis to say that everything in the
original contract still applies, but with some changes e.g. the date of the new contract.
Using mutatis mutandis saves you having to include all the terms of a previous contract
in a new one.

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Negotiation
Negotiation is the process of the parties to the contract discussing - perhaps arguing
about - the final terms of the contract to which they're prepared to be bound. Contract
negotiation used to be done via a mixture of phone calls, tracked changes and emails -
nowadays modern tools allow you to negotiate contracts in-browser.
Novation
This is when a party to a contract transfers their rights, obligations, or liabilities to
someone else who wasn’t involved in the original contract. It’s also called “assignment”.
Obligation
Something which the parties to a contract must or (mustn’t) do.
Party (or parties)
Any person, group, or organization that’s signed, or is going to sign, a contract.
Period
The length of time a contract will be in force (also called the “term”).
Preamble
A section at the start of a contract before the main text saying who the people signing
it are, and their reasons for doing that. Also sometimes called “recitals” or
“background”.
Principle
Another name for the main parties to a contract.
Pro rata
A Latin term meaning “in proportion”, this refers to giving an amount to a fraction
according to its share of the whole. So a pro rata salary is the amount you’d pay a part-
time employee if they worked full-time.
Pro tempore
A Latin term which translates as “for the time being”.
Quid pro quo
A Latin term which means “something for something”. It’s the basis for consideration in
a contract, i.e. that each party should offer something to the other.
Recitals

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A section at the start of a contract before the main text saying who the people signing
it are, and their reasons for doing that. It’s also sometimes called “preamble” or
“background”.
Redlining
In the context of contracts, redlining means the process where parties to the contract
make their suggested changes and revisions to the document, as part of the negotiation
process before signature. It’s called redlining because changes used to be suggested
using red ink, which would help people working on the contract to keep track of the
new ‘redlines’ between each iteration of the document.
Once both parties are happy and all the ‘redlines’ are accepted or rejected, the contract
can move forward to signature.
It’s important to note that in certain countries, ‘redlining’ has an entirely different
meaning and historical context. Read more about redlining in the context of
discriminatory practices here. But for our purposes, we’re talking about contracts.
Remedies
The things a court can use to help someone if a contract they’ve signed is breached by
one of the other parties e.g. damages.
Renewal reminders
Renewal reminders exist because signature doesn't represent the end of the contracting
process, but rather the beginning. A multitude of obligations and milestones will follow
for the people involved. This means a system needs to be in place to monitor contracts
as they progress through their lifecycle, with alerts being delivered to key stakeholders
to keep them updated. Users can create custom automated reminders to let them know
ahead of key dates in the contract.
Representations
A statement of fact or promise made by one party to a contract to another during
negotiations. It’s usually not a contractual term, but it might convince someone to enter
into a contract e.g. “all our products are hand-made”. If someone relied on a
representation when they signed a contract and it’s later proved false
(“misrepresentation”), they might be entitled to cancel the contract and claim for
damages.
Rights
The things a party to a contract is entitled to do, or not do.
Risk of loss

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This says who has to pay (i.e. who bears the risk) if goods are lost or destroyed after
they’re sold but before they’ve been delivered. If the buyer bears the risk of loss, they’ll
generally have to pay for the goods even if they never arrive. And if the seller bears it,
they’ll have to resupply the goods that were lost or destroyed at their own cost.
Severability
A provision in a contract which says that if some of the terms are held to be illegal or
unenforceable, the rest of the contract still applies.
Signatory
A signatory is anyone that has signed or will sign a contract. Once they have signed a
contract, the signatory is therefore bound by the obligations outlined in the legal
agreement. There can be multiple signatories in any one contract.
Term
This has two meanings:
1. the length of time a contract is valid for, and
2. a clause in a contract.
Termination for cause
This is when a party to a contract can terminate it if the other party doesn’t do what
the contract says they will e.g. if they break a confidentiality agreement. It’s mainly
used in employment contracts. The non-breaching party can either terminate the
contract immediately or with some notice, or give the other party time to put things
right.
Termination for convenience
This is when a contract lets one or more parties terminate it without giving a reason.
This might only be allowed at specific times e.g. a month before renewal, and might
also include a notice period, or a fee of some kind.
Territory
Any geographic area in which a contract’s valid.
Third party
Any person, group, organization, or other legal entity (e.g. a company) that’s
mentioned in, but isn’t a party to, a contract.
Variation
An alternative term for an amendment.

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Void
When a contract’s made unenforceable in law it’s void. A void contract is treated as if it
was never created, and isn’t enforceable in court.
Waiver
This is when someone intentionally gives up some or all of their rights in a contract.
Warranties
These are promises made in a contract. They’re legally enforceable, so if someone
breaks them they might have to pay damages.
Whole agreement
A clause in a contract that says any other previous agreements or arrangements no
longer apply. It’s also called an “entire agreement”.

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