Contracts: A Glossary of Jargon

An arrangement or an understanding between two or more parties made verbally, in writing, by conduct or a combination of these. The term agreement encompasses both Deeds and Contracts.

Alternative Dispute Resolution

Alternative Dispute Resolution (ADR) is an umbrella term that covers methods of attempting to resolve a dispute without going to court. Mediation and Arbitration are types of ADR. Agreements often have clauses in them requiring the parties to participate in ADR and prescribing what processes they will follow if they disagree about anything in the agreement. Insisting on a clause like this, means that sometimes neither party can start court proceedings without first following the process set out in the agreement.

This is a term that lawyers use to describe the more generic provisions that appear in most agreements. Boilerplate clauses are often inserted at the end of an agreement under a heading like “General” and include things like Entire Agreement, Jurisdiction, Waiver, Severability, Variation, Governing Law and Counterparts provisions (refer to the glossary for further explanations of these terms).

The failure to comply with one or more terms or conditions of an agreement.

Judge made law; law developed through court decisions rather than by parliament in legislation.

Secret; unable to be disclosed. The terms of Agreements are sometimes required to be kept confidential. There is also often a clause in an Agreement listing the information that may arise or be shared under the Contract that must be kept confidential.

The thing that each party gives to the other for entering the Contract; the benefits exchanged between the parties. Often the consideration will be the price one party pays to acquire goods or a service from the other party and the transfer of the goods or performance of the work by the other party to the payer. The benefit exchanged (Consideration) does not have to be monetary.

An agreement between two or more parties, that requires Consideration (see definition above) to be legally binding. Although the term Contract is often used to refer to the document that outlines the rights and obligations of the parties, a contract is not always in writing and can also be made verbally, by conduct or a combination of writing, conversations and conduct.

A copy of the agreement. Sometimes there is a provision in an Agreement called a Counterparts clause which allows the different parties to each sign their own copy of the Agreement as opposed to all Parties having to sign the one copy. Where the different Parties’ signatures appear on separate copies, the Agreement is said to have been signed in “Counterparts.” This can be helpful where it is difficult for all the Parties to sign the one document due to timing and/or geographic reasons.

An amount of money sought or awarded to a party to a Contract for compensation for the loss they have suffered because another party Breached the Contract. Usually the Damages awarded will be enough to put the injured party in the position they would have been in had there been no Breach.

A special type of Agreement. Unlike a Contract, it does not require Consideration to pass from one Party to another. It has some special formal requirements that must be met. A Deed will need to be: (i) signed and witnessed; (ii) inscribed with the words “signed, sealed and delivered”; and (iii) copies exchanged between the parties.

 Many Agreements include a provision that has the effect of making the written document the complete understanding between the Parties. It means that any statements or promises that are not in the written document (but may have been made by a Party to entice the other to do the deal) are not part of the legally binding Agreement. If you enter an Agreement which has an Entire Agreement clause, be careful that all the terms and conditions that are important to you are included in the written document. An Entire Agreement provision provides certainty for the Parties that they have a complete document evidencing the deal they did.
The following is an example of an entire agreement clause:

“This agreement is the entire agreement between the parties about its subject matter. Any previous understanding, agreement, representation or warranty relating to this subject matter is replaced by this agreement and has no further effect.”

A statement renouncing responsibility. A Disclaimer or Exclusion clause attempts to limit or exclude liability of a party. Be careful if you want to rely on a disclaimer or exclusion clause – in some cases courts have decided that they were ineffective - this is a tricky area and you should get some legal advice.

The following is an example of a Governing Law clause:
“This agreement is governed by the law in force in New South Wales.”

A promise to reimburse another Party if they suffer loss or damage in the circumstances that are the subject of the Indemnity. An Indemnity clause is often coupled with a Warranty, where a party promises that something is true and if it is not, and the other party is sued by a third person then the Party giving the Indemnity has to pay the amount of loss that the other party incurs from being sued. The following is an example of an indemnity:

“The Composer must unconditionally indemnify the Producer against, and must pay the Producer on demand the amount of, all losses, liabilities and expenses that the Producer incurs because any of the Composer’s representations or warranties under clause 16 are incorrect.”

The following is an example of a Jurisdiction clause:

“The parties submit to the exclusive jurisdiction of the courts of New South Wales and their appellate courts.”

The legal responsibility arising from an action or lack of action. Liability can arise under an Agreement, from the Common Law, or from Legislation.

Acts, regulations or other legal instruments containing the laws made by parliament or authorities that have been delegated law making powers by parliament. In Australia we have some Commonwealth (national) legislation and State-based legislation.

The period of time which an aggrieved party has to commence a legal proceeding against another party. The Limitation Period varies depending on the jurisdiction and the issue in dispute.

The conduct of court proceedings.

A form of Alternative Dispute Resolution where an independent person meets with the parties in conflict to help them formulate their own solution. It is often a more informal and less expensive way to resolve a dispute than going to court and can be particularly useful where the parties have to continue to deal with each other after the dispute.

A notice attached to a particular thing to indicate that the thing (be it an artwork, object, music, film etc) embodies traditional ritual knowledge of a particular Indigenous community, that permission of the custodians of that knowledge has been sought and given for specific uses and alerting others that the custodians should be contacted for any other uses of the thing. It is important when an agreement deals with anything that might contain Indigenous objects, knowledge, culture, language or works.

The following is an example of a notice of custodial interest.
“The music/songs in this film embody traditional ritual knowledge of the [name] community. It was created with the consent of the custodians of the community. Dealing with any part of the music/songs for any purpose that has not been authorised by the custodians is a serious breach of the customary laws of the [name] community, and may also breach the Copyright Act 1968 (Cth). For enquiries about permitted reproduction of this music/these songs, contact [community].”
 

The Participants in an Agreement or Litigation. 

The length of time for which a contract operates (see also "Term").

A template used as a guide to preparing a similar type of Agreement. It can also refer to a prior court decision that is authority for a particular legal position or argument.

Protocols refer to appropriate conduct. In recent times, there have been a number of Protocols developed for use when interacting with Indigenous people and their communities. Protocols are made in good faith and encourage mutual respect. They are not legally binding, unless terms of an Agreement oblige Parties to follow them.

The section in an Agreement where the Parties outline the circumstances that cause them to enter the Agreement. It is also sometimes called “Background”. It is usually not a legally binding part of the Agreement, but is considered by a court when interpreting the Agreement if there is any ambiguity in the clauses and words used in the Agreement. It often includes a statement indicating the intention of the Parties.

The outcomes available to a party to an Agreement should the other Party breach the Agreement. Remedies include Damages and Injunctions.

Statements or promises made to the other person as a fact (see also “Warranties”). Representations are often made by one Party to entice the other Party to enter the Agreement.

Entitlements made available by law or through an Agreement.

A provision which provides that the Agreement will end after a certain date.

The period of time that the Agreement will operate for. It can also be used to describe any clause or provision of an Agreement eg. “a term of the agreement”.

The geographical area that the Agreement will relate to.

A person or other legal entity (eg. a company) that is not a Party to the Agreement.

This expression means that the times specified in the Contract are critical to the Agreement. It means that time is so essential to the deal that if one Party does not comply with the timing requirements then the other Party can terminate the Agreement (and also sue for Damages). If you enter an Agreement where “time is of the essence” it is imperative that you comply with the timing and dates stipulated, for example for the delivery of an artwork.

The following is an example of a variation clause:
“This agreement may only be changed in writing signed by all parties.”

The following is an example of a Waiver provision:

“A failure by either party to take action to enforce its rights does not constitute a waiver of any right or remedy under this agreement unless it is in writing signed by the party granting the waiver.”

The following is an example of a some warranties
“The Artist warrants that the Artist is the sole author of the image and owns or has been granted all rights and interests in the Image necessary to grant the licence under this agreement.”