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Common contract language decoded

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effective introductions target trainingI remember the first time I had to deal with a contract in German. I felt like I didn’t know what I was agreeing to and it made me really nervous. It seemed like the message was hidden behind complicated words which I didn’t truly understand. So when several of my participants who work in the purchasing department asked me to help them understand the language of legal contracts in English, I could really identify with their apprehension. If you are responsible for deciphering the meaning of a work-related contract or in your personal life, it is very challenging- even if you are confident about your language skills.

Understanding contract language doesn’t have to be quite as difficult as you might think, if you know some of the basic vocabulary which is commonly used. Below we are going to look at some commonly used phrases which you might encounter in contracts and what they mean in plain language. We’ve arranged them in categories to help you. (These phrases are intended to help you understand what is meant; they do not replace your legal department.)

At the beginning

  • This contract agreement sets forth the terms and conditions during the term hereof. = In this contract you will find the basic requirements related to the agreed time frame.
  • These are the obligations pursuant to this document. = These are the requirements which are relevant for this document.
  • Article 1, hereinafter referred to as 1.0, stipulates the mandatory conditions. = Article 1, which is shown as 1.0 later in the document, states which conditions are required.

What are the conditions?

  • The user is obligated to adhere to the conditions expressly set forth in this agreement. = The user needs to follow the conditions listed in the agreement.
  • Conditions are subject to change in accordance with the standards set forth in this agreement. = The rules can be changed in the way shown in the agreement.
  • A breach of contract leads to the immediate termination of this agreement.= The contract ends if the contract conditions are broken.

What are my rights?

  • The company retains all intellectual property rights and modifications thereof. = The intellectual property rights and changes belong to the company.
  • The aforementioned conditions do not affect the companies’ rights. = The previous terms do not change the companies’ rights.
  • The stipulations set forth in this agreement are binding.= The agreements in this document are obligatory (not optional).

What is it going to cost?

  • Unless otherwise agreed to in writing, charges will be invoiced upfront. = Costs are collected in advance, unless other arrangements are written into the contract.
  • The user is not entitled to any refunds, credits, or early termination for any reason. = The user has no right to ask for money back, credits or to end the contract earlier than planned.
  • Premature termination of the contract shall not release the user of their obligation to pay any fees that have accrued. = The user still needs to pay fees which they created even if the contract ends early.

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