Contracts are the backbone of business, but they’re often riddled with potential misunderstandings. A poorly defined term can lead to costly disputes and obligations no one intended. That’s why carefully defined terms are absolutely crucial for clarity and precision in any contract. They make sure everyone’s on the same page and minimize any ambiguity.
This article will explore why defined terms are so important, their specific purpose, best practices for writing and reviewing them, and some potential traps to avoid when you’re hammering out an agreement.