AB Initio
A Latin term which means “from the beginning”.
You might see a contract referred to as “void ab initio”.
This means it was invalid from the start, for example if the person who signed it didn’t have the legal right to do so.
A contract that’s declared void ab initiocan’t be amended to correct whatever’s wrong with it – it’s treated as if it never e.
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Addenda/Addendum
A contract addendumadds new terms to an existing contract, while still keeping all the original terms in place.
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Agreement
Any type of understanding or arrangement reached between two or more parties, whether in writing or not.
An agreement isn’t legally binding though – a contract is a type of agreement that is legally binding and is enforceable in court.
Find out more about agreement vs contract.
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Alternative Dispute Resolution
A way to resolve a contractual disputewithout going to court e.g. by mediation or arbitration.
Some contracts contain a clause saying that if there’s a problem, then the parties should follow specific ADR processes to fix it.
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Amendments
Changes to a contractthat are made after it’s signed.
These are almost always done in writing, and must be agreed and signed by all parties.
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Appendix/Appendices
Appendices usually appear at the end of a contract.
They don’t change or affect the contract’s terms in any way – they just add extra information about it that you need to know (e.g. share options or employee benefits).
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Approval Workflow
An approval workflow is a process that allows legal teams to let business users work on their own contracts, usually from a template, but with safeguards in place so that before the contract goes to the counterparty, it must be reviewed by legal.
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Arbitration
A form of alternative dispute resolution (ADR) to resolve contract disputes without going to court, using an independent tribunal.
Some contracts include arbitration clauses which say who an arbitrator will be in advance.
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Assignment
Also called “novation”, this is when a party to a contract transfers their rights, obligations, or liabilities to someone else who wasn’t involved in the original contract.
You can use a novation agreement templateto set this up.
