In law, a clause refers to a specific section within a contract, agreement, or legal document. The purpose of a clause is to define specific rights, obligations, or conditions that the parties involved in the agreement must abide by. For this reason, legal clauses are written in a precise language that helps avoid ambiguity and define the roles and expectations of all the parties.
The legal clauses in different documents can look quite different. They can be simple statements of fact, or even complex sets of rules about legal obligations – such as payment terms, confidentiality, or dispute resolution mechanisms.
A common example of a legal clause is the “Limitation of Liability Clause”. This type of clause limits the liability of one of the parties, defining what they can be held responsible for if things go wrong in the agreement.
For example, you can find a Limitation of Liability clause in a Terms and Conditions document and it can look something like this:
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