What Does “Defined Terms” Mean in a Contract?
Words or phrases given specific meanings within a contract, usually capitalized and often collected in a definitions section.
Detailed Explanation
Defined terms are words given special meaning in a contract, different from their ordinary usage. They're typically capitalized throughout the document to signal they have a specific definition. "Services" in regular English could mean anything; "Services" as a defined term means exactly what the contract says it means.
Definitions may be gathered in one section or defined where they first appear. Either way, the definition controls - even if it differs from common understanding. "Confidential Information" might be defined broadly to include things you wouldn't normally consider confidential.
Example in a Contract
“"Deliverables" means all work product, reports, analyses, software, documentation, and other materials created by Contractor in the course of performing the Services, whether in draft or final form.”
Why It Matters
Defined terms can dramatically change your obligations. A narrowly defined "Confidential Information" might leave important data unprotected; a broadly defined term might restrict you more than you expected. Always read the definitions.
Related Terms
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