Supplemental terms: Overview, definition, and example
What are supplemental terms?
Supplemental terms refer to additional conditions or clauses that are added to a primary agreement to provide further details, clarification, or modification to the main contract. These terms are used to address specific aspects of the agreement that may not have been covered in the original terms or to provide more flexibility in how certain conditions are implemented. Supplemental terms are often used to handle unique situations or circumstances that arise during the course of a contract and may include additional obligations, rights, or exceptions.
Why are supplemental terms important?
Supplemental terms are important because they allow businesses and individuals to customize an agreement to fit their specific needs and circumstances. These terms can provide clarity, protect both parties, and ensure that all potential scenarios are addressed, which helps to avoid misunderstandings and disputes later on. For example, a supplemental term could clarify delivery dates, payment schedules, or specific performance expectations that were not fully detailed in the main body of the contract.
They can also provide flexibility and allow for changes or adjustments as the situation evolves, without the need to rewrite or renegotiate the entire contract.
Understanding supplemental terms through an example
Imagine two companies enter into a contract for the supply of goods. The main contract outlines the price, quantity, and delivery schedule for the products. However, one company may need to include a supplemental term to specify that the goods must be delivered within a particular temperature range or stored in a certain way to ensure quality.
For example, the contract may initially say, "Company A will deliver the goods by the end of the month." A supplemental term could specify, "Goods must be delivered and stored at a temperature between 35°F and 45°F to ensure product integrity." This supplemental term adds a necessary condition that clarifies the requirements for delivery.
Example of a supplemental terms clause
Here’s how a supplemental terms clause might appear in a contract:
“The Parties agree that the following supplemental terms are added to this Agreement: (1) Delivery must be made within 15 days of the agreed-upon date; (2) The goods must be stored at a temperature between 35°F and 45°F until delivery; (3) Any delays caused by weather or unforeseen circumstances may result in an extended delivery timeline, subject to mutual agreement in writing.”
Conclusion
Supplemental terms play a key role in making contracts more specific and adaptable. They allow businesses to address particular needs or contingencies that may arise during the life of an agreement. By adding these terms, parties can ensure that their contract is as comprehensive and flexible as necessary, reducing the risk of confusion or disputes in the future. Whether it’s clarifying details, adding exceptions, or adjusting conditions, supplemental terms help provide the necessary framework for smooth and effective contract performance.
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.