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Defined terms (optional clause)

Defined terms (optional clause)

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This precedent has been authored by Dr. Gordon Hughes, Principal, Davies Collison Cave Law.

Introductory note

Long or complex contractual documents often provide for defined terms in order to avoid ambiguity and promote consistency of usage. Definitions frequently appear early in contractual documents, once the parties have been identified and any necessary background made but may also be included in an appendix or glossary of terms in more complex or voluminous documents. They are generally placed in alphabetical order but may also be listed in order of appearance in the contractual document.

Important words and terms that are invested with particular meaning should be included in a defined terms section even though they may appear only once or only in a single clause. A less effective alternative in such cases is to provide the definition in the clause itself.

Definitions are often identified in a contract by an initial capital letter or by bold type, indicating that the term is consistently imbued with a specific and defined meaning throughout the document. This would allow the word to be interpreted in a generic and non-specific way when it appears in the document without capitalisation or bold type.