Additional provisions: Overview, definition, and example
What are additional provisions?
Additional provisions refer to extra terms or clauses that are added to a contract beyond the basic or standard requirements. These provisions typically address specific needs, conditions, or circumstances that arise during the course of the agreement. Additional provisions are often customized to suit the particular goals of the parties involved, and they can cover a wide range of topics, including specific timelines, payment terms, dispute resolution methods, or confidentiality requirements.
For example, a contract for the sale of goods may include additional provisions related to warranty periods, return policies, or delivery schedules that go beyond the standard terms.
Why are additional provisions important?
Additional provisions are important because they allow the parties involved in a contract to tailor the agreement to their unique situation. By including these provisions, businesses can address potential issues that may not be covered by standard clauses, ensuring clarity and reducing the risk of misunderstandings or disputes.
For businesses, additional provisions offer flexibility to customize contracts to meet specific needs, protect interests, and mitigate potential risks that are not immediately apparent during the initial negotiations.
Understanding additional provisions through an example
Imagine a company entering into a licensing agreement with a third party. In addition to the standard terms, such as the duration of the license and the territories where it applies, the contract may include additional provisions related to the quality control of the licensed products or reporting requirements that must be followed. These additional provisions are tailored to the specific needs of the business and ensure both parties comply with certain expectations.
In another example, a service agreement might include an additional provision for penalties if the service provider does not meet performance targets, which is not part of the core contract but addresses a specific concern of the client.
An example of additional provisions clause
Here’s how an additional provisions clause might look in a contract:
*“In addition to the provisions set forth in Sections [Insert Section Numbers], the Parties agree to the following additional provisions:
The Supplier shall deliver the goods within 30 days of the order date.
The Client shall provide written feedback on the goods within 10 days of receipt.
Any late deliveries will be subject to a penalty fee of [Insert Amount] per day of delay.”*
Conclusion
Additional provisions are key for ensuring that a contract fully addresses the specific needs and expectations of the parties involved. They help create more tailored agreements, providing clarity and flexibility for businesses to manage unique circumstances and potential risks.
Including well-drafted additional provisions in contracts allows businesses to safeguard their interests, reduce ambiguity, and ensure the agreement meets all necessary requirements for successful execution.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.