What is a Clause In A Contract?

Contracts are a crucial part of any business, whether it be a large company or a small freelance job. They’re put in place to protect both parties and ensure that all expectations are met. At the heart of any contract is its clauses, which are declarations and statements that outline the rights and obligations of the parties involved. But what exactly is a clause in a contract? In this post, we will explore this question in depth, looking at the different types of clauses and their essential features. We will also provide helpful examples to illustrate how these clauses work in practice.

What is a clause?

In a contract, a clause is a specific provision or section that sets forth certain rights, duties, or obligations of the parties to the agreement. Common clauses found in contracts include those dealing with confidentiality, non-competition, arbitration, and choice of law.

What is a contract?

A contract is a legally binding agreement between two or more parties. A contract can be written, oral, or implied by the actions of the parties. The purpose of a contract is to establish the terms of an agreement and to protect the rights of the parties involved.

A contract contains four essential elements: offer, acceptance, consideration, and intention to create legal relations. An offer is an offer to enter into a contract. The acceptance is the acceptance of the offer by the other party. Consideration is something of value that is given by one party to another in exchange for their promise to do something. The intention to create legal relations means that the parties intend for their agreement to be legally binding.

If a contract is breached, meaning one party does not fulfill their obligations under the agreement, the other party may be able to sue for damages. Damages are money that is paid by one party to another as compensation for losses suffered as a result of a breach of contract.

What is the difference between a clause and a contract?

When two parties agree to do something together, they typically sign a contract that outlines the terms of their agreement. This contract will likely contain various clauses that detail each party’s obligations. But what exactly is a clause in a contract, and how does it differ from the contract itself?

A clause is simply a section or paragraph of a contract that contains specific information about the rights and responsibilities of the parties involved. Clauses are often used to address specific issues that may arise during the course of the agreement. For example, a clause may be included in a contract to address what will happen if one party defaults on their payments.

While clauses provide important details about the agreement between two parties, they are not themselves legally binding. In other words, if one party breaches a clause in the contract, the other party can’t take them to court for damages. Instead, they would need to rely on the provisions of the contract itself.

So while clauses are an important part of any contract, they should not be confused with the contract itself. The contract is what creates the legal relationship between two parties, and it is this document that will be enforceable in court if necessary.

What are the benefits of having a clause in a contract?

When two parties are entering into a contract, it is important that they are clear about their rights and obligations. A clause is a specific provision in a contract that sets out these rights and obligations. Having a clause in a contract can help to:

-Clarify the terms of the agreement
-Ensure that both parties understand their responsibilities
-Prevent misunderstandings or disputes between the parties
-Make the contract enforceable in court if there is a breach

How can clauses be used in negotiation?

There are a few different ways that clauses can be used in negotiation. First, clauses can be used to explain the terms of an agreement. This can help both parties to understand what they are agreeing to and can prevent misunderstandings later on. Additionally, clauses can be used to protect each party’s interests. For example, a clause could state that neither party will be held liable for any damages that occur during the course of the agreement. Finally, clauses can be used as bargaining chips in negotiation. For instance, one party may agree to certain terms in exchange for the other party agreeing to a different term. Ultimately, the use of clauses in negotiation will depend on the specific situation and what both parties are hoping to achieve.


In conclusion, clauses in a contract are an important part of any legal agreement and should not be overlooked. They help to clarify the terms of the agreement, ensure that both parties understand their responsibilities, and can even provide protection for one or both parties involved. Knowing how to identify and use clauses in contracts is essential when creating agreements as they can make all the difference between a successful transaction and an unsuccessful one.

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