General terms: Overview, definition, and example
What are general terms?
General terms refer to the standard provisions included in a contract or agreement that outline the basic rules, obligations, and expectations applicable to all parties involved. These terms typically address universal aspects of the agreement, such as payment obligations, termination rights, confidentiality, and dispute resolution, without being specific to any one clause or provision.
For example, a general term in a service agreement might require both parties to act in good faith and comply with all applicable laws.
Why are general terms important?
General terms are important because they provide a consistent and comprehensive foundation for any agreement. They ensure that fundamental aspects of the contract are clearly defined, reducing the likelihood of misunderstandings or disputes.
For businesses, including general terms ensures that contracts are enforceable, legally compliant, and aligned with standard practices. These terms also provide flexibility by addressing common scenarios that might not require detailed negotiation.
Understanding general terms through an example
Imagine a consulting agreement that includes the following general terms:
- Confidentiality: Both parties agree not to disclose any proprietary information shared during the course of the agreement.
- Governing Law: The agreement will be governed by the laws of a specific jurisdiction, such as California.
- Payment Terms: Payment is due within 30 days of receiving an invoice.
These general terms establish the basic expectations for the relationship between the parties and ensure consistency throughout the agreement.
In another example, a lease agreement might include general terms such as:
- Notices: Any required notices must be sent in writing to the addresses specified in the agreement.
- Amendments: The contract can only be amended in writing and with the consent of both parties.
An example of a general terms clause
Here’s how a general terms clause might appear in a contract:
“The Parties agree to act in good faith and to comply with all applicable laws and regulations in the performance of their obligations under this Agreement. Any amendments to this Agreement must be in writing and signed by both Parties.”
Conclusion
General terms form the backbone of contracts and agreements, providing clarity, consistency, and enforceability for standard aspects of the relationship between the parties.
By including clear and well-drafted general terms, businesses can create comprehensive agreements that address common legal and operational issues while maintaining flexibility and reducing the risk of disputes.
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.