What Does “Sole Discretion” Mean in a Contract?
Complete and unreviewable decision-making authority, without needing to explain or justify the decision.
Detailed Explanation
"Sole discretion" means one party can make a decision without review, approval, or justification. They can decide for any reason or no reason at all. Courts rarely second-guess decisions made "at sole discretion."
Sole discretion is powerful and one-sided. If the other party can terminate "at their sole discretion," they can end the contract without explanation, for reasons you might consider unfair.
Example in a Contract
“Company may, in its sole and absolute discretion, determine whether Contractor's deliverables meet the acceptance criteria. Such determination shall be final and binding.”
Why It Matters
Sole discretion gives the other party complete control over certain decisions. If important decisions (like acceptance or termination) are at their sole discretion, you have limited recourse if they decide against you.
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