Terms defined elsewhere in this agreement: Overview, definition, and example
What are terms defined elsewhere in this agreement?
"Terms defined elsewhere in this agreement" refers to terms, phrases, or provisions that are explained or specified in another part of the same contract or agreement. This clause indicates that certain terms used in the agreement may not be explicitly defined in the immediate section where they appear, but instead, the definitions can be found in different sections of the agreement. It helps reduce repetition and keeps the contract concise by referencing definitions that are already provided elsewhere in the document.
This clause is typically included in legal or business agreements to make sure that all terms are clearly understood, even if they are defined in separate parts of the document. It serves as a reminder for the reader to look for these definitions in other parts of the agreement to ensure proper understanding of the language used.
Why are terms defined elsewhere in this agreement important?
The importance of referencing terms defined elsewhere in the agreement lies in the clarity and consistency it brings to the document. Legal and business contracts often contain specialized terminology, and instead of repeating lengthy definitions every time a term is used, these terms are defined in a central location. This approach reduces redundancy, makes the document more readable, and helps prevent confusion over the meaning of terms used in different contexts.
This clause also provides assurance that the agreement’s terms have been clearly explained and that all parties understand what they mean. It prevents ambiguity, ensuring that the parties to the agreement are on the same page regarding the terms used.
Understanding terms defined elsewhere in this agreement through an example
Consider a business agreement for the licensing of intellectual property. In the contract, the term "Confidential Information" is used frequently, but instead of repeating a long definition every time it appears, the agreement states that "Confidential Information" is defined in Section 2.1.
In the contract, you might find a clause like this:
"The Parties agree that the term 'Confidential Information,' as used throughout this Agreement, shall have the meaning ascribed to it in Section 2.1."
Here, the reader is expected to refer to Section 2.1 to find the detailed definition of "Confidential Information." This helps keep the document streamlined without sacrificing clarity.
An example of "terms defined elsewhere in this agreement" clause
Here’s how a clause referencing terms defined elsewhere might appear in an agreement:
"Terms defined elsewhere in this Agreement: All terms used in this Agreement shall have the meaning ascribed to them in the sections where they are specifically defined, and any reference to these terms shall be interpreted in accordance with those definitions. For example, 'Product' is defined in Section 1.2 and 'Services' is defined in Section 3.4."
Conclusion
"Terms defined elsewhere in this agreement" is a useful clause in contracts that helps maintain clarity and conciseness by directing the reader to the sections of the agreement where specific terms are defined. This reduces redundancy while ensuring that the meaning of terms is consistent and clear. By referencing these definitions, the agreement becomes easier to read and understand, avoiding potential confusion or misinterpretation of important terms.
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.