Operative provisions: Overview, definition, and example
What are operative provisions?
Operative provisions are the core sections of a legal agreement or contract that set out the rights, duties, obligations, and mechanics of the relationship between the parties. They are distinct from the recitals, definitions, or boilerplate sections and form the actionable heart of the contract—covering what each party must do, when, and how. These provisions are typically numbered clauses or sections and vary depending on the nature of the agreement.
Why are operative provisions important?
Operative provisions are important because they legally bind the parties and outline exactly how the agreement will function in practice. They remove ambiguity by detailing key terms such as payment obligations, deliverables, timelines, confidentiality, indemnification, dispute resolution, and more. Without clearly drafted operative provisions, a contract may lack enforceability or lead to confusion and legal disputes.
Understanding operative provisions through an example
In a service agreement, the operative provisions would include terms like the scope of services, payment schedule, performance standards, and duration of the agreement. For example, if the contract says the service provider must deliver monthly reports by the 5th of each month, that’s an operative provision—it defines what must be done and when.
Example of how operative provisions may appear in a contract
Here’s how an operative provision may appear in a contract:
"2.1 Services. The Contractor agrees to provide the Services described in Exhibit A in a timely and professional manner. All Services shall be completed in accordance with the timeline set forth in Exhibit B."
Conclusion
Operative provisions are the functional core of any contract, defining the specific actions, responsibilities, and expectations that the parties agree to uphold. Whether dealing with payment terms, service obligations, or conditions for termination, these provisions are essential for making the agreement workable and enforceable. Well-drafted operative provisions reduce risk, provide clarity, and help ensure the success of the business relationship.
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.