Contracts can be complicated by legal jargon, but there are a handful of contract terms which even non-legal consumers should know.

These basic terms control how a contract begins, when it ends, and even if it exists at all. With this crash course on contract terminology, you’re much less likely to be bewildered when an agreement goes sour.

Here are five contract terms that you really should know:

You may have heard the phrase “breach of contract,” since it is one of the most common legal missteps to occur in a contract. But what does it mean exactly?

2. Offer.

Almost every contract begins with an offer, which expresses the intent to be bound by the terms of the offer once it is accepted.

3. Acceptance.

Once an offer is made, it must be accepted to form a contract. This is may be accomplished by signing an agreement agreeing to the proposed terms, sending letters, or even sending emails to the offeror stating the acceptance of the terms.

4. Statute of Frauds.

The Statute of Frauds governs which types of contracts need to be in writing. An agreement which is not in writing and falls within the Statute of Frauds can be refused to be legally enforced.

5. Waiver.

A waiver is a clause or separate legal document which effectively gives up a legal right or claim held by the person agreeing to the waiver. Everyday people are most commonly confronted by liability waivers.

A contract attorney could help explain these further, but you are now armed with some basic knowledge of these five foundational contract terms.

Related Resources:

  • Unenforceable Contract? 5 Common Errors (FindLaw’s Law and Daily Life)
  • 5 Things a Contracts Lawyer Can Do (That You Probably Can’t) (FindLaw’s Law and Daily Life)
  • Is the Noncompete Clause in Your Work Contract Legal? (FindLaw’s Law and Daily Life)
  • Legal How-To: Repossessing a Car (FindLaw’s Law and Daily Life)

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