Contract Law – Clauses

When reviewing a contract, certain language or clauses within the contract are likely to seem peculiar to a non-lawyer. The purpose
of this article is to help explain the purpose and effect language and provisions frequently included in contracts.

Costs and attorneys' fees. In the event of a legal dispute, the party that loses must pay the winning party's legal fees. (For more
information, see Nolo's article Attorneys' Fees Provisions in Contracts.)

Arbitration. Any disputes about the contract must be resolved through arbitration proceedings, not in a lawsuit. (For more
information, see Nolo's article Arbitration Provisions in Contracts.)

Choice of law. In the event of a dispute, a choice of law provision determines which state's legal rules will be applied in the lawsuit.

Jurisdiction. In the event of a dispute, a jurisdiction clause determines where (in which state and county) the lawsuit must be filed.

Waiver. This permits the parties to forego or give up the right to sue for breach of a particular provision of the agreement without
giving up any future claims regarding the same provision.

Severability. This permits a court to sever (take out) an invalid provision and still keep the rest of the agreement intact.

Integration. An integration clause says that the written contract represents the final agreement of the parties. Often, it explicitly states
the any prior agreement or discussions of the agreement are replaced by the written contract and that any further modification to the
contract must be in writing.

Attachments. This guarantees that attachments and exhibits will be included as part of the agreement.

Notice. This describes how each party must provide notices to the other (for example, to terminate the agreement).

Relationships. This prevents either party from claiming a business relationship with the other (for example, by stating that the parties
are partners or that one is the other's employee).

Assignment. This affects the ability of the parties to sell or transfer their rights under the agreement to another party.

Force majeure (pronounced fors- mazhoor'; also referred to as "Acts of God"). This clause establishes that the agreement will be
suspended in the event of unforeseen disasters (such as earthquakes, hurricanes, floods, and so on).

Jury trial waivers. This establishes that when there is a court battle over the contract, the parties agree to have the dispute heard by
the judge and to give up their right to a jury trial.

Limitations on damages. This sets a cap or otherwise limits the types of damages that may be awarded in a contract dispute.

Warranties. These are promises or assurances made by each party regarding various contract obligations.

Indemnity. In an indemnity provision, one party guarantees that it will cover the costs of certain disputes brought by third parties
(that is, people who are not parties to the agreement).

Confidentiality. This guarantees that the parties will not disclose certain information.

Announcements. This establishes the manner in which the parties can make public disclosures about the subject of the contract, such
as statements about a forthcoming merger or joint business venture.

Details, explanation:

Merger and Integration Clause

The purpose of a merger and integration clause is to prevent the parties to a contract from later claiming that the contract does not
reflect their entire understanding, was changed by a subsequent oral agreement, or is not consistent with their prior agreements:
This Agreement and the exhibits attached hereto contain the entire agreement of the parties with respect to the subject matter of this
Agreement, and supersede all prior negotiations, agreements and understandings with respect thereto. This Agreement may only be
amended by a written document duly executed by all parties.
A party entering into a contract that includes this type of language should make sure that all promises and agreements are actually
included in the written contract, as otherwise it will likely be impossible to enforce those unwritten promises. Where amendment of
the contract must be in writing, a party seeking an amendment should make sure that the required amendment or change order is
created, and that it is signed and dated by the parties.

Choice of Law and Forum Clause

Contracts will often contain language expressing that they are to be interpreted under the laws of a particular state or jurisdiction, and
that any litigation will occur within a specified court system:
This agreement shall be interpreted under the laws of the State of California. Any litigation under this agreement shall be resolved in
the trial courts of Los Angeles County, State of California.
Contract provisions for the choice of law and forum language are not always enforceable, particularly in relation to consumer
contracts, but are likely to be upheld for contracts between sophisticated parties and businesses. When entering into a contract you
should assume that the provision will be enforced and consider how the provision might affect the cost and burden of litigation in the
event of a later dispute.

Statute of Limitations Clause

A statute of limitations clause changes the statute of limitations that applies to litigation relating to the subject matter of the contract.
For example, the governing law may define a six year statute of limitations for a lawsuit alleging a breach of contract, but the
contract includes a provision that shortens that period, eliminates the "discovery rule" (a rule that may extend the statute of
limitations during the period a party is unaware of the breach), or both:
The parties agree that any action in relation to an alleged breach of this Agreement shall be commenced within one year of the date of
the breach, without regard to the date the breach is discovered. Any action not brought within that one year time period shall be
barred, without regard to any other limitations period set forth by law or statute.
For public policy reasons, particularly in relation to consumer transactions, states will not always enforce a reduction in the statute of
limitations. You should assume when entering into a contract that a clause reducing the statute of limitations is valid and, whenever
possible, should commence any litigation within the contractual period. As there is a possibility that a court might find the clause to
be invalid or contrary to public policy, you should consult with an attorney in your jurisdiction before assuming that you don't have a
valid cause of action on the basis of this type of contract language.

Indemnification Clause
An indemnification or indemnity clause requires that one party indemnify the other in the event that specified expenses are incurred.
For example:
The subcontractor agrees to indemnify and hold harmless the contractor against loss or threatened loss or expense by reason of the
liability or potential liability of the contractor for or arising out of any claims for damages.
Be careful when entering into a contract that includes this type of clause, as the provision can significantly increase your financial
exposure in the extent of an unexpected event or breach of the contract.

Time of Performance Clause

Some contracts will provide that "time is of the essence", which may support an action for breach of contract where the contract is
not completed within a reasonable (or specified) time. This type of clause is often seen in construction contracts, as it is important
that construction work be resolved in a reasonably timely manner such that a homeowner or business can return to normal life or
operations:
Time is of the essence for the completion of the work described in this contract. It is anticipated by the parties that all work described
herein will be completed within two (2) weeks of the date of execution, and that any delay in the completion of the work described
herein shall constitute a material breach of this contract.
If you agree that time is of the essence, you should be certain that you can complete your duties under the contract with in the agreed
time frame or schedule.
Other contracts may specifically provide that time is not of the essence:
The parties agree that time is not of the essence in the completion of the work described in this contract. All parties shall act to
complete the work described within a reasonable time.
Where a contract includes language of the latter variety, you may wish to ask yourself why the other party wants the language. That
is, do they anticipate delays which will leave you dissatisfied with the timeliness of their performance?

Arbitration Clause
Some contracts include language specifying that all disputes under the contract will be resolved by arbitration:
All disputes, controversies, or claims arising out of or relating to this contract shall be submitted binding arbitration in accordance
with the applicable rules of the American Arbitration Association then in effect.
A typical arbitration clause will be considerably more detailed than this example language. For many contracts, state law may require
specific language, forms of disclosure, or regulate the appearance of an arbitration clause, with the failure to meet the state standard
rendering the clause unenforceable.
In many contracts, the parties may see mutual benefit to negotiating an arbitration clause, so as to avoid the possibility that a dispute
will end up in court or to provide for a faster resolution of disputes than would be available through litigation. In other contexts, the
party that seeks to impose an arbitration clause will normally anticipate a significant benefit from the inclusion of the clause in the
event of a dispute, such as its making any action in the event of breach unaffordable for the other party who will typically have to pay
half the cost of a private arbitration. Arbitration can be significantly more expensive than litigation, and may not be reasonably
affordable for smaller claims.

Savings (Severability) Clause

Most contracts include a savings clause, included to ensure that the contract remains enforceable even if part of the contract is later
held invalid:
If any provision of this Contract is held unenforceable, then such provision will be modified to reflect the parties' intention. All
remaining provisions of this Contract shall remain in full force and effect.
If a single clause of a contract is found to be invalid, in the absence of a savings clause it is possible that the entire contract will be
rendered invalid.

Attorney Fees Clause

In the event of litigation, an attorney fees clause requires that the losing party reimburse the prevailing party's attorney fees:
In the event of litigation relating to the subject matter of this Contract, the non-prevailing party shall reimburse the prevailing party
for all reasonable attorney fees and costs resulting therefrom.
If one party to a contract is significantly better positioned than the other to pay legal fees and the cost of litigation, the other party
should be careful to consider whether an attorney fee clause will be helpful in the event of a dispute, or if its primary effect will be to
discourage the other party from attempting to seek redress through the courts in the event of a dispute or breach.

Non-Waiver Clause
The purpose of non-waiver language is to protect a party who excuses the other party's non-compliance with contract terms, and to
prevent the parties' course of conduct under the contract from resulting in the loss of enforceability of the actual terms of the contract:
The failure by one party to require performance of any provision shall not affect that party's right to require performance at any time
thereafter, nor shall a waiver of any breach or default of this Contract constitute a waiver of any subsequent breach or default or a
waiver of the provision itself.
For example, if a contract requires monthly payments but the party owing payments only pays every other month but the contract
does not include a non-waiver clause, after a year of acceptance of the late payments a court would be likely to hold that the
bimonthly payments do not constitute a breach of the contract. With a non-waiver clause, despite the prior course of conduct that was
inconsistent with the contract language, the party to whom the payments are due would normally be able to enforce the monthly
payment provision.

Liquidated Damages Clause

If it may be difficult for the parties to calculate actual damages, it may be appropriate to include within a contract a liquidated
damages clause, a provision stating that in the event of a breach a specific sum of money becomes due as compensation for the
breach. The most common form of liquidated damages is the late fee charged following the late receipt of payment on a lease, loan or
credit card. An example for the rental of an apartment:
For any rent paid after the fifth day of the month, the tenant shall pay a late fee in the amount of $50 (not to exceed 5% of the
monthly rent).
The damages are said to be liquidated based upon the contract's stating a specific sum that will be paid as damages, whatever the
actual amount of damages may be. Parties who agree to include a liquidated damages clause within a contract should consider
whether the amount of money defined in the clause is fair and reasonable, or if the amount is excessive.
Liquidated damages are meant to compensate the wronged party, not to provide a windfall or to punish the party in breach. The
amount of liquidated damages must be a reasonable approximation of the amount of damages that the injured party will suffer as a
result of a breach of the contract. A court will not uphold liquidated damages clauses if it finds that the defined payment is
disproportionate to the injury, or if the amount of liquidated damages appears to be intended as punitive as opposed to fair
compensation for the actual injury.

Cooling-off period (consumer rights), a period of time during which the purchaser may cancel a purchase. Standstill period, the time
to allow unsuccessful bidders to challenge the decision before a contract is signed.

Cooling-off. Employee further covenants and agrees that if Employees employment is terminated prior to the expiration of the
Employment Period or upon delivery by the Company of a Non-Extension Notice pursuant to which the Employee is entitled to
receive severance under Section 2(b) of the Standard Terms and Conditions, for a period of one (1) year after the date of termination
(the Cooling-Off Period), Employee will not directly or indirectly engage in the Business (as defined at the end of this Section
4(b)(2)) in the United States and Puerto Rico and any other country in which Company or any of its affiliates engages in such
Business (whether alone, as a partner, joint venturer, officer, director, employee, consultant or investor of any other entity), including
but not

A conflict of interest (COI) is a situation in which a person or organization is involved in multiple interests, financial or otherwise,
one of which could possibly corrupt the motivation or decision-making of that individual or organization.
The presence of a conflict of interest is independent of the occurrence of impropriety. Therefore, a conflict of interest can be
discovered and voluntarily defused before any corruption occurs. A conflict of interest exists if the circumstances are reasonably
believed (on the basis of past experience and objective evidence) to create a risk that a decision may be unduly influenced by other,
secondary interests, and not on whether a particular individual is actually influenced by a secondary interest.

Conflict of Interest. If any individual to whom authority has been delegated or redelegated hereunder shall also be a Participant in
this Plan, such Participant shall have no authority with respect to any matter specially affecting such Participants individual interest
hereunder or the interest of a person superior to him or her in the organization (as distinguished from the interests of all Participants
and Beneficiaries or a broad class of Participants and Beneficiaries), all such authority being reserved exclusively to other
individuals as the case may be, to the exclusion of such Participant, and such Participant shall act only in such Participants
individual capacity in connection with any such matter.
Task I.

This Agreement is entered into as of the XX day of October, 200X, between ___________(“the Committee”) and ____________
(“the Contractor”).

1. __Contractor clause _____ Subject to the terms and conditions of this Agreement, the Committee hereby engages the Contractor
as an independent contractor to perform the services set forth herein, and the Contractor hereby accepts such engagement.

2. ______________________ The Contractor’s duties, term of engagement, compensation and provisions for payment thereof shall
be as set forth in the budget which is attached as Schedule A, which may be amended in writing from time to time, or supplemented
with subsequent estimates for services to be rendered by the Contractor and agreed to by the Committee, and which collectively are
hereby incorporated by reference.

3. ______________________ During the term of this Agreement, the Contractor shall bill and the Committee shall reimburse her for
all reasonable and approved out-of-pocket expenses as set forth in Schedule A which are incurred in connection with the performance
of the duties hereunder.

4. ______________________. The Committee may request that project plans, progress reports and a final results report be provided
by Consultant.. A final results report shall be due at the conclusion of the project and shall be submitted to the Committee in a
confidential written report at such time. The results report shall be in such form and setting forth such information and data as is
reasonably requested by the Committee.

5. ______________________ Upon the expiration or earlier termination of this Agreement, or whenever requested by the
Committee, the Contractor shall immediately deliver to the Committee all such files, records, documents, specifications, information,
and other items in her possession or under her control. The Contractor further agrees that she will not disclose her retention as an
independent contractor or the terms of this Agreement to any person without the prior written consent of the Committee and shall at
all times preserve the confidential nature of her relationship to the Committee and of the services hereunder.

6. ______________________ The Contractor represents that she is free to enter into this Agreement and that this engagement does
not violate the terms of any agreement between the Contractor and any third party. During the term of this agreement, the Contractor
shall devote as much of her productive time, energy and abilities to the performance of her duties hereunder as is necessary to
perform the required duties in a timely and productive manner. The Contractor is expressly free to perform services for other parties
while performing services for the Committee.

7. ______________________ : The Committee may terminate this Agreement at any time by 10 working days’ written notice to
the Contractor. In addition, if the Contractor is convicted of any crime or offense, fails or refuses to comply with the written policies
or reasonable directive of the Committee, is guilty of serious misconduct in connection with performance hereunder, or materially
breaches provisions of this Agreement, the Committee at any time may terminate the engagement of the Contractor immediately and
without prior written notice to the Contractor.

8. ______________________ This Agreement shall not render the Contractor an employee, partner, agent of, or joint venturer with
the Committee for any purpose. The Contractor is and will remain an independent contractor in her relationship to the Committee.
The Committee shall not be responsible for withholding taxes with respect to the Contractor’s compensation hereunder. The
Contractor shall have no claim against the Committee hereunder or otherwise for vacation pay, sick leave, retirement benefits, social
security, worker’s compensation, health or disability benefits, unemployment insurance benefits, or employee benefits of any kind.

9. ______________________ The Contractor will carry liability insurance (including malpractice insurance, if warranted) relative
to any service that she performs for the Committee.

10. ______________________ The Contractor shall not assign any of her rights under this Agreement, or delegate the performance
of any of her duties hereunder, without the prior written consent of the Committee.

11. ______________________ No amendment, change or modification of this Agreement shall be valid unless in writing signed by
the parties hereto.

12. ______________________ This document and any exhibit attached constitute the entire understanding and agreement of the
parties, and any and all prior agreements, understandings, and representations are hereby terminated and canceled in their entirety
and are of no further force and effect.

13. ______________________ If any provision of this Agreement, or any portion thereof, is held to be invalid and unenforceable,
then the remainder of this Agreement shall nevertheless remain in full force and effect.

IN WITNESS WHEREOF the undersigned have executed this Agreement as of the day and year first written above. The parties
hereto agree that facsimile signatures shall be as effective as if originals.
Task II.

The Executives or the Companys failure to insist upon strict compliance with any provision of this Agreement or the failure to assert
any right the Executive or the Company may have hereunder, including, without limitation, the right of the Executive to terminate
employment for Good Reason pursuant to Section 3(c) hereof, shall not be deemed to be a surrender of such provision or right or any
other provision or right of this Agreement.

In the event of any controversy or claim arising out of or relating to this agreement, or a breach thereof, the parties hereto shall first
attempt to settle the dispute by mediation, administered by the AAA . If settlement is not reached within sixty days after service of a
written demand for mediation, any unresolved controversy or claim shall be settled by AAA / American Health Lawyers Association
Alternative Dispute Resolution Service.

The powers conferred upon Agent and Lender by this Agreement are solely to protect its rights hereunder and under the other Loan
Documents and its interest in the Collateral and shall not impose any duty upon Agent or Lender to exercise any such powers. No
omission or delay by Agent or Lender at any time to enforce any right or remedy reserved to it, or to require performance of any of
the terms, covenants or provisions hereof by Borrower at any time designated, shall be deemed a forgoing of any such right or
remedy to which Agent or Lender is entitled, nor shall it in any way affect the right of Agent or Lender to enforce such provisions
thereafter.

A Claimant wishing to seek judicial review of an adverse benefit determination under the Plan, whether in whole or in part, must file
any suit or legal action, including, a civil action under Section 502(a) of ERISA, within three years of the date the final decision on
the adverse benefit determination on review is issued or should have been issued under Section 9.6 or lose any rights to bring such an
action. If any such judicial proceeding is undertaken, the evidence shall be timely presented to the Committee. Notwithstanding
anything in the Plan to the contrary, a Claimant must exhaust all administrative remedies available to such Claimant under the Plan
before such Claimant may seek judicial review.

In the event of any litigation or dispute arising from this Warrant, the parties agree that the party who is awarded the most money
shall be deemed the prevailing party for all purposes and shall therefore be entitled to an additional award of the full amount of the
legal representation fees and expenses paid by said prevailing party in connection with the litigation and/or dispute without reduction
or apportionment based upon the individual claims or defenses giving rise to the fees and expenses. Nothing herein shall restrict or
impair a court's power to award fees and expenses for frivolous or bad faith pleading.

Vendor represents to Ingram, its customers, and affiliates that (i) it has good transferable title to the Products and all necessary
licenses to prove the Product for resale, (ii) the Product will perform in conformity with specifications and documentation supplied
by Vendor, (iii) the Product is new and does not contain used or reconditioned parts, (iv) to Vendors knowledge the Product or its use
does not infringe any patents, copyrights, trademarks, trade secrets, or any other intellectual property rights, and (v) that there are no
suits or proceedings pending or threatened which allege any infringement of such proprietary rights.

Unless otherwise provided in this Agreemen, all communications given or made pursuant to this Agreement shall be in writing and
shall be deemed effectively given: (a) upon personal delivery to the party to be notified, (b) when sent by confirmed electronic mail
or facsimile if sent during normal business hours of the recipient, and if not so confirmed, then on the next business day, (c) five (5)
days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one (1) day after deposit
with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt.

The rights and obligations of the parties under the Agreement shall be construed in accordance with the laws of the CV , without
giving effect to its principles relating to the conflict. Any legal action, suit or proceeding brought by a party that in any way arises
out of this Agreement ("Proceeding") must be litigated exclusively in the USDC (Richmond Division) or the Circuit Court.