Matters: Overview, definition, and example
What are matters?
Matters refer to issues, subjects, or topics that are relevant within the scope of a contract, legal agreement, or business discussion. The term is often used broadly in agreements to encompass various obligations, disputes, or considerations that may arise between parties. Matters can include financial matters, legal matters, regulatory matters, or operational matters, depending on the context.
For example, in a merger agreement, the term "matters" may refer to pending litigation, financial obligations, or compliance issues that need to be disclosed before the deal is finalized.
Why are matters important?
Matters are important in contracts because they help define the scope of responsibilities, disclosures, and obligations between parties. By clearly addressing relevant matters, businesses can avoid misunderstandings, reduce legal risks, and ensure transparency.
For businesses, addressing specific matters in agreements provides legal protection, clarifies expectations, and helps ensure regulatory compliance. Matters clauses are often used in representations and warranties, disclosures, and liability provisions.
Understanding matters through an example
Imagine a corporation is acquiring a smaller company. The purchase agreement requires the seller to disclose all pending legal matters, such as lawsuits or regulatory investigations. If the seller fails to disclose a lawsuit, the buyer may have legal grounds to seek damages or cancel the transaction.
In another scenario, an employment contract may state that an employee must not engage in outside business matters that conflict with their job duties. This ensures the employee does not take on work that competes with their employer’s business.
An example of a matters clause
Here’s how a matters clause might appear in a contract:
“Each Party represents and warrants that it has disclosed all material matters relevant to the execution of this Agreement, including but not limited to financial obligations, legal disputes, and regulatory compliance issues. Failure to disclose such matters may result in termination of this Agreement or legal recourse.”
Conclusion
Matters are broad contractual terms covering important issues, obligations, and disclosures relevant to an agreement. They help businesses clarify responsibilities, protect against undisclosed risks, and ensure compliance with legal and financial obligations.
By defining and addressing key matters in contracts, businesses can reduce risks, maintain transparency, and establish clear expectations in legal and financial transactions.
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.