Types of Contract Clauses

To fulfill all the needed conditions and agreements, clauses are divided into more categories, such as the ones listed below:

This is the most common cause that can be encountered in any contract. It is straightforward and indicates the end of all legal effects that can be found in a contract. Asasnest clause can also be interpreted as a termination clause where each party has the possibility to renegotiate the clause and the termination date.

This type of clause can be applied when there has been a breach in the contract. The penalty clause discusses the compensation the other parties involved need to receive from the one who has breached the contract. Normally, there is a monetary repayment, but it can also be of another nature. This clause is used as a safety net in the case of breaching the mutual agreement. However, you should be aware that the penalty clause and the liquidated damages clause are not the same.

This clause is used to highlight and describe the limitations of liability that might occur for one or both parties that are involved in the contract. One of the most common clauses of this type is the limitation clause. 

The exclusion clause is a type of exemption clause that limits liability. This clause has the purpose of excluding or limiting one of the party’s liability. In a contract, the existence of this clause is to exclude or limit the liability a member can have over a mentioned condition or situation.

This clause protects information that can’t be disclosed to unauthorized persons. This clause is usually found in sensitive contracts such as business and employment contracts.

This clause mentions the conditions in which a contract can be ended by any party involved.

The attribution clause includes a third party that has the purpose of mediating and resolving any dispute that might occur between the members of the agreement. It represents a less formal way of handling any problems that might arise between the parties involved.

This clause can also be encountered as an escalator clause and has the role of provisioning the contracting parties and also offers the possibility of adjusting terms when specified conditions are met. 

This kind of clause is usually mentioned in employment contracts, as it offers the employer a safe environment that protects them from competition.