Contract clauses, one at a time

Retention is the money a subcontractor has earned and cannot spend. Getting it back is a paperwork exercise, and the clause decides how long that exercise takes.

A royalty clause turns a licence into income for the owner: a percentage of the licensee's sales, sometimes a fixed fee per unit, paid on a regular cycle with a report. The rate matters, but disputes usually turn on the base the rate is applied to, the minimum, and the owner's right to audit.

Set off looks like an accounting convenience and works as leverage. Whoever holds the right to deduct decides who funds a dispute while it is being resolved.

Termination is a blunt response to a late invoice, because it ends the revenue as well as the exposure. Suspension keeps the contract alive and puts the pressure where it belongs.

Suppliers fear a customer that never says yes, and customers fear being told a half working system was accepted. An acceptance clause gives each side a date, a test and a decision, with deemed acceptance usually doing the tie breaking.

An approval clause controls the gate between a draft and the next step: the client sees the work, approves it or asks for changes within a set time, and silence counts as approval after a deadline. For sponsored content it also keeps the creator's voice intact by limiting changes to facts and required elements.

Projects change weekly, and a change agreed in a stand up meeting has no price or date attached until someone writes it down. The change control clause makes writing it down the only route to more work, more money or more time.

A truck at the wrong gate at the wrong hour is a delivery that did not happen, whatever the docket says. The clause earns its place by deciding in advance what a successful handover looks like and who pays when one fails.

Exclusivity swaps one party's freedom to shop around for something measurable in return. The clauses that cause trouble describe the promise in careful detail and the return in a single vague line.

Liquidated damages only work if the completion date can move when the principal causes delay. The extension of time clause is what keeps that date fair, and its notice rules are where most claims are won or lost.

Clients often buy a consultancy because of the two people who pitched the work, then meet a different team on day one. A key personnel clause makes the pitch team part of the contract and puts a price on changing it.

Suppliers price for volume, so a buyer that wants the low price is often asked to promise the volume as well. The drafting question is what the buyer pays when demand drops, and whether that amount is a fair price or a penalty in disguise.

Most customers learn that a project is in trouble from a report that arrived late or said nothing. A reporting clause fixes the contents and the deadline, so bad news surfaces while there is still time to act on it.

A revisions clause caps the back and forth on creative work. It says how many rounds of changes the fee includes, usually two, what a round is, that feedback comes consolidated from one person, and what further rounds or changes of direction cost. Without it, a fixed fee becomes an open ended commitment.

Service credits are the price adjustment that makes service levels bite without a lawsuit. How they are sized, capped and claimed decides whether they motivate the supplier or simply become a small discount the supplier budgets for.

A promise of reliable support means whatever the unhappy party wants it to mean. A service level clause replaces that with a target, a measuring window and a report, so both sides can see from the same data whether the service is working.

Most service disputes are not about whether work was done but whether it was done well enough. The standard of care clause is the ruler that question is measured against, and the words chosen move the answer considerably.

Customers choose a supplier after checking its insurance, security and references, then discover part of the job was done by a business they have never heard of. The subcontracting clause decides whether that is allowed and makes sure the checks the customer ran still count.

Five words can turn a late delivery from an irritation into an exit. That is why suppliers read them closely, and why a clause applying them to every date in a contract is rarely what either side needs.

Tenants want to fit a space to their business; landlords want the building back in a lettable state. The alterations clause draws the line between what a tenant can do freely, what needs consent, and what is banned altogether.

Bond disputes happen in the last week of a tenancy, but they are decided by what was done in the first week: the amount taken, the lodgement and the condition report. A clause that follows the statutory steps makes the eventual claim routine.

Break clauses in England and Wales are read strictly, so a small arrears figure or a partition left behind can keep a tenant bound for years. The safest break for a tenant has a clear date, a clear notice method and as few conditions as the landlord will accept.

Leaving a fixed term lease early is not illegal, but it costs money, and how much depends on which state the home is in. New South Wales sets a fixed fee; most other states make the tenant cover the landlord's actual loss.

A continuous operation clause makes a tenant keep trading, because an empty shop hurts every other shop in the centre. A go dark clause lets the tenant stop trading while paying rent. Courts in the UK and many US states rarely order a tenant to keep trading, so the real remedy is usually damages or a recapture right.