1. Contract Terms
and Clauses with
Special
Meanings

2. Best Efforts
Exuding effects beyond
that of a normal person.
Doing everything in your
power and perhaps
employing super human
powers in completing a
task.

3. A Promise to personally perform
under the contract. A Personal
guaranty may require you to use
your own money to satisfy debts
of the corporation or to complete
tasks after the company is
dissolved.
Personal
Guaranty

4. Evergreen Clause
A contract clause that allows the contract to go
on for infinity. A contract with no termination
or expiration date.

5. Third Party
Beneficiary
A third party beneficiary is
someone that does not sign
the contract, but is meant to
benefit from the contract.
The third party beneficiary
can enforce the contract.
And, if something goes
wrong the third party
beneficiary can even sue
under the contract.

6. Limitation of
Liability
Limits your ability to
get compensated for
the other person’s
wrong doing. This
means you may only
be able to recover a
set nominal amount
of money, if the
other person does
something wrong.

7. Indemnification
A promise to pay
someone else’s legal
fees and any other
monies that may be
owed if something is
done improperly.

8. Waiver of Liability
A promise not to sue, demand money, or other
damages if the other person did something
wrong.

9. Cross Default
The right to terminate
all agreements, if a
person fails to
perform or breaks a
promise.

10. Force Majeure
The right to terminate a contract
because of an act of God (such as a
tornado or flood) and possibly any
other act that is beyond the control of
the people making the contract.

11. Business Judgment
A presumption that any
decision is right, so long
as it was made in good
faith and all the
information was reviewed
and considered.

12. A decision made with business interests and
ambitions in mind. There is considerable latitude
here. Do not assume that business interests and
ambitions are yours in particular.
Commercially Reasonable

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