Contract Clause Library

Browse 25 illustrative contract clauses with plain-English explanations. Open an example, check its context, and compare proposed wording.

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These examples are starting points for review, not approved language for a particular deal or jurisdiction. Check definitions and related provisions with qualified counsel before use.

25 examples

Reviewing a change? Copy an illustrative example or your authorized clause, then compare two versions. The comparison tool accepts 1,900 characters across both versions; it does not review an entire agreement.

Confidentiality

Confidentiality

Defines confidential information and binds the receiving party not to disclose or use it outside the agreement's purpose.

Illustrative example wording
The Receiving Party shall hold all Confidential Information in strict confidence and shall not disclose, copy, reproduce, summarize, or distribute such Confidential Information except as expressly permitted under this Agreement.

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Mutual Indemnification

Liability and risk

Each party agrees to defend and reimburse the other for losses caused by its own breach, negligence, or violation of law.

Illustrative example wording
Each Party shall indemnify, defend, and hold harmless the other Party from and against all third-party claims, damages, and reasonable attorneys' fees arising out of (a) breach of this Agreement, or (b) gross negligence or willful misconduct of the indemnifying Party.

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Limitation of Liability

Liability and risk

Caps the maximum amount one party can recover from the other, typically excluding indirect and consequential damages.

Illustrative example wording
EXCEPT FOR LIABILITY ARISING UNDER SECTION [INDEMNIFICATION] OR FOR BREACH OF SECTION [CONFIDENTIALITY], NEITHER PARTY'S TOTAL LIABILITY UNDER THIS AGREEMENT SHALL EXCEED THE FEES PAID OR PAYABLE BY [PARTY] DURING THE 12 MONTHS PRECEDING THE EVENT GIVING RISE TO THE CLAIM.

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IP Assignment (Work-for-Hire)

Intellectual property

Transfers ownership of all work product created under the agreement to the paying party.

Illustrative example wording
All Deliverables created under this Agreement are deemed "works made for hire" under the U.S. Copyright Act. To the extent any Deliverable does not qualify as a work made for hire, Contractor hereby irrevocably assigns to Company all right, title, and interest in such Deliverable.

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IP License (Limited Use)

Intellectual property

Grants the receiving party a defined, non-exclusive right to use the IP without transferring ownership.

Illustrative example wording
Licensor grants Licensee a non-exclusive, non-transferable, revocable license to use the Licensed Materials solely for Licensee's internal business purposes during the term of this Agreement.

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Non-Solicitation of Employees

Employment and engagement

Prohibits one party from hiring or actively recruiting the other's employees for a defined period.

Illustrative example wording
During the term of this Agreement and for 12 months thereafter, neither Party shall directly solicit for employment any employee of the other Party who was substantively involved in the performance of this Agreement.

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Force Majeure

Liability and risk

Excuses performance when extraordinary events (war, natural disaster, government action) prevent it.

Illustrative example wording
Neither Party shall be liable for delay or failure to perform any obligation under this Agreement to the extent such delay or failure is caused by acts of God, war, terrorism, pandemic, government action, or other events beyond reasonable control. The affected Party shall notify the other Party promptly and use reasonable efforts to resume performance.

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Termination for Convenience

Termination

Allows either party to end the agreement without cause on notice — usually 30-90 days.

Illustrative example wording
Either Party may terminate this Agreement for convenience upon 60 days' written notice to the other Party. Upon termination, [PARTY] shall pay all fees accrued through the effective termination date.

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Termination for Cause

Termination

Lets a party terminate immediately when the other materially breaches and fails to cure.

Illustrative example wording
Either Party may terminate this Agreement immediately upon written notice if the other Party materially breaches any provision of this Agreement and fails to cure such breach within 30 days after receiving written notice describing the breach.

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Governing Law

General terms

Specifies which state or country's law applies to interpretation and enforcement.

Illustrative example wording
This Agreement shall be governed by and construed in accordance with the laws of the State of [STATE], without regard to conflict-of-laws principles.

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Venue / Forum Selection

General terms

Specifies where lawsuits must be filed if disputes arise.

Illustrative example wording
Any action arising out of this Agreement shall be brought exclusively in the state or federal courts located in [COUNTY], [STATE], and each Party irrevocably submits to the jurisdiction of such courts.

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Mandatory Arbitration

General terms

Requires disputes be resolved through arbitration rather than court litigation. Note: post-EFAA (9 U.S.C. § 402), sexual-assault and sexual-harassment disputes are not subject to pre-dispute arbitration agreements; this clause must include the EFAA carve-out.

Illustrative example wording
Any dispute arising out of or relating to this Agreement shall be resolved by binding arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules. The seat of arbitration shall be [CITY, STATE]. Notwithstanding the foregoing, nothing in this Agreement requires arbitration or waives a judicial forum for a sexual assault dispute or sexual harassment dispute, as those terms are defined under the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act, 9 U.S.C. § 402.

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Severability

General terms

Preserves the remainder of the agreement if a court finds one provision unenforceable.

Illustrative example wording
If any provision of this Agreement is held to be invalid or unenforceable, that provision shall be modified to the minimum extent necessary to make it enforceable, and the remainder of the Agreement shall continue in full force and effect.

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Entire Agreement

General terms

States that the written contract is the complete agreement, superseding prior discussions.

Illustrative example wording
This Agreement constitutes the entire agreement between the Parties with respect to its subject matter and supersedes all prior or contemporaneous communications, representations, or agreements, whether oral or written.

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Amendment

General terms

Specifies how the contract can be modified — usually requiring a signed writing.

Illustrative example wording
No amendment, modification, or waiver of any provision of this Agreement shall be effective unless in writing and signed by authorized representatives of both Parties.

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Assignment

General terms

Controls whether a party can transfer its rights or obligations to a third party.

Illustrative example wording
Neither Party may assign this Agreement without the prior written consent of the other Party, except that either Party may assign without consent in connection with a merger, acquisition, or sale of substantially all assets.

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Notice

General terms

Specifies how official notices under the contract must be delivered (email, mail, etc.).

Illustrative example wording
All notices under this Agreement shall be in writing and delivered (a) by personal delivery, (b) by overnight courier, or (c) by certified mail to the addresses set forth in the signature block, or by email with confirmation of receipt.

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Survival

General terms

Identifies which obligations continue after the contract ends (typically confidentiality, indemnification).

Illustrative example wording
Sections [Confidentiality], [Indemnification], [Limitation of Liability], [Governing Law], and any other provision that by its nature is intended to survive shall survive termination or expiration of this Agreement.

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Independent Contractor

Employment and engagement

Confirms the parties are independent businesses, not employer/employee or partners.

Illustrative example wording
The Parties are independent contractors. Nothing in this Agreement creates a partnership, joint venture, agency, franchise, or employment relationship between the Parties. Neither Party has authority to bind the other.

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No Conflict of Interest

Employment and engagement

Discloses or restricts engagements with competitors or parties with competing interests.

Illustrative example wording
Contractor represents that performance of this Agreement does not and will not breach any other agreement to which Contractor is a party. Contractor shall promptly disclose any actual or potential conflict of interest.

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Payment Terms / Late Fees

Payment

Specifies when invoices are due and what happens for late payment.

Illustrative example wording
Invoices are due within 30 days of receipt. Past-due amounts shall accrue interest at the lesser of 1.5% per month or the maximum rate permitted by law. Client shall reimburse reasonable collection costs and attorneys' fees.

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Acceptance / Approval

Payment

Defines when a deliverable is considered accepted, triggering payment obligations.

Illustrative example wording
Client shall review each Deliverable within 10 business days of receipt and notify Contractor in writing of any non-conformance. If Client does not provide written rejection within 10 business days, the Deliverable is deemed accepted.

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Warranty Disclaimer

Liability and risk

Limits or disclaims warranties about quality, fitness for purpose, or merchantability.

Illustrative example wording
EXCEPT AS EXPRESSLY SET FORTH HEREIN, THE SERVICES ARE PROVIDED "AS IS" WITHOUT WARRANTY OF ANY KIND, AND EACH PARTY DISCLAIMS ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND NON-INFRINGEMENT.

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Audit Right

General terms

Lets one party inspect the other's records to verify compliance with the agreement.

Illustrative example wording
Upon 30 days' written notice and no more than once per calendar year, each Party may audit the other's records relevant to this Agreement to verify compliance. Audits shall be conducted during normal business hours and shall not unreasonably disrupt operations.

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Most-Favored-Nation Pricing

Payment

Guarantees a buyer pricing at least as favorable as that offered to comparable customers.

Illustrative example wording
During the term, Vendor shall not charge Customer prices materially higher than the prices offered to similarly situated customers for substantially similar services. If Vendor offers more favorable pricing to a comparable customer, Customer's pricing shall be reduced accordingly.

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Frequently Asked Questions

What is a contract clause library?
A contract clause library is a collection of common legal clauses used in business agreements. Each clause comes with example language, plain English explanations, and guidance on when to use it. This helps you understand standard contract language and find appropriate clauses for your agreements.
How do I use the clause library to draft better contracts?
Search for the type of clause you need, read the plain English explanation and example text, and use it as a template or reference. Each entry provides one illustrative example. Filter by topic, check the explanation, and compare proposed changes in context. Qualified counsel should verify language before it is used.
What do the topic labels mean?
Topic labels organize the examples by subject, such as payment, confidentiality, or termination. They are not risk ratings or an assessment of your agreement.

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When to use the Contract Clause Library

1. You’re reviewing a vendor MSA and want to spot the usual traps fast

If you’re a startup founder, ops lead, or in-house counsel reviewing a SaaS vendor’s MSA, clause-by-clause comparisons matter more than reading the agreement as one long document. The library helps you quickly check the sections that usually drive risk: limitation of liability, indemnity, confidentiality, data security, and termination.

2. You received a “standard” contract from a Fortune 500 customer

Large customers often send paper that looks non-negotiable, but the real leverage is usually in the clause variations. A freelancer, agency owner, or small software company can use the library to understand which language is market, which is aggressive, and which asks deserve a redline.

3. You’re comparing two versions of the same clause

Maybe the other side changed “sole discretion” to “reasonable discretion,” or expanded an indemnity to cover “all claims arising out of” performance. That kind of wording can materially change your risk, and the library helps you understand the difference before you waste time on a cosmetic edit.

4. You’re drafting a co-founder, consulting, or employment agreement from scratch

The library includes examples for IP assignment, independent contractor status, confidentiality, payment, and termination. Read their explanations to prepare questions about the provisions your agreement needs.

5. You need to explain a clause to a client or business partner in plain English

Clients do not always need legal theory; they need a practical answer: “What happens if this customer misses payment?” or “Why does this confidentiality clause last so long?” The plain-English summaries make it easier to translate legal language into business terms without losing the nuance.

How to get the most out of this tool

  • Use “clause-first” review. Start with the clauses that change money, liability, data, and termination before you worry about formatting or defined terms. That saves time and helps you focus on the business risk that actually matters.
  • Compare the baseline to the ask. If the clause library shows common language, compare that against the other side’s draft and mark what moved: scope, duration, carve-outs, notice periods, or remedies. Small edits often carry the biggest consequences.
  • Track variation by deal type. A clause that is routine in a consulting agreement may be inappropriate in a software license or distribution deal. Use the examples to calibrate what is normal for the specific transaction, not just what is “standard” in the abstract.
  • Write your redline notes in plain English. Before editing the contract, write a one-line business explanation for each requested change. That makes it easier to defend your position internally and helps the other side understand your concern.
  • Build a reusable playbook. Save the clauses you see most often—especially indemnity, liability cap, confidentiality, and governing law—so your future reviews are faster. Over time, the library becomes the backbone of a house-style contract position set.

Common use cases by industry

SaaS and technology. In software deals, the biggest questions are usually data security, uptime commitments, IP ownership, warranties, and limitation of liability. If you’re reviewing a vendor agreement for a product team, the clause library helps you understand whether the paper is truly SaaS-friendly or just dressed up as one.

Professional services and agencies. Marketing agencies, dev shops, and fractional operators often need clarity on scope creep, change orders, payment timing, and ownership of deliverables. The tool is useful when a client asks for unlimited revisions, broad indemnities, or rights to reuse work product beyond the original project.

Freelancers and solo consultants. Independent contractors often sign whatever is sent to them, especially from bigger clients. This is where the library helps you spot clauses that could quietly create open-ended risk, like broad confidentiality obligations, work-for-hire language, non-competes, or payment terms tied to vague acceptance criteria.

Manufacturing and supply chain. If you’re dealing with NDAs, supply agreements, or quality-related contracts, the clause details matter because failure can trigger recalls, chargebacks, or lost production time. The library is especially helpful for confidentiality, inspection rights, delivery terms, and indemnity allocation.

Finance and regulated services. Financial services contracts often add compliance language, audit rights, and restrictions around data use or subcontractors. A legal or compliance team can use the library to sanity-check clause variants before they become a negotiation bottleneck.

Real estate partnerships and joint ventures. Real estate deals often rely on a few clauses that control control rights, exit mechanics, contribution obligations, and deadlock resolution. When the parties are friends or repeat collaborators, the library is a practical reminder to document the ugly scenarios before they happen.

How this fits into your contract workflow

The Contract Clause Library is best used before you draft and while you review, not after the signature. It helps you decide what language belongs in the first draft, what language deserves negotiation, and which risks you can likely accept without a long back-and-forth.

Think of it as the research and issue-spotting layer of your workflow. You can use it to understand the clause, then move into redlining with a clearer sense of what you want to keep, change, or delete.

Once you’re ready to draft in Word, LexDraft’s features page shows how the add-in fits into actual document work, and pricing helps you decide whether it makes sense for your team. If you’re building a repeatable process, the library plus the Word add-in gives you a cleaner path from clause research to final agreement.

For teams that still toggle between browser tabs, email threads, and track changes, that matters. The library helps you make better clause decisions; LexDraft helps you turn those decisions into real contract language inside the document you’re already working on.

Frequently asked questions

Is the Contract Clause Library only for lawyers?

No. It is useful for lawyers, but it is just as helpful for founders, operators, procurement teams, freelancers, and in-house business partners who need to understand what a clause means before they sign. The plain-English explanations are designed to make contract review faster for non-specialists. If you are deciding whether to escalate something to counsel, the library is a good first stop.

Does the library tell me which clause is “best”?

Usually there is no single best clause. What works depends on the deal: a SaaS vendor, a freelance designer, and a real estate joint venture may all need different risk allocation. The tool is most useful when you want to understand the tradeoffs so you can choose language that fits the transaction instead of copying a clause blindly.

Does the library assess my contract?

The library displays fixed examples and explanations. It does not read your contract or assign risk ratings. Use the comparison tool for a separate analysis of two short clauses, and review its output in the context of the full agreement.

Can I rely on the example language as-is?

You can use the examples as a starting point, but you should not treat them as drop-in language for every deal. Clause wording often needs to match the surrounding agreement, defined terms, and business terms like payment, scope, and termination. The examples are best used to understand structure and variation before tailoring the language to your facts.

What if the other side says a clause is “market”?

“Market” usually means common in similar deals, not universally fair. The library can help you check whether a clause looks standard for your industry or whether the other side is asking for a broader position than usual. If you have to push back, it is easier to negotiate when you can point to the function of the clause and the specific risk it creates.

Do I still need a lawyer if I use this tool?

For high-value, high-risk, or heavily regulated deals, yes. The library is a strong self-service tool for understanding clauses and preparing questions, but it does not replace legal advice on a serious negotiation. It is especially useful for getting to a smarter first pass before you involve outside counsel or your internal legal team.

Which clauses usually deserve the most attention?

In most contracts, the clauses that matter most are limitation of liability, indemnity, confidentiality, termination, payment, IP ownership, warranties, and dispute resolution. Those provisions usually control the money, the exit, and the consequences if something goes wrong. If you are short on time, start there before reviewing the rest of the document.

Can this help with redlining?

Yes, indirectly. The library helps you understand what to change and why, which makes your redlines more deliberate and easier to defend. Once you know the clause position you want, you can move into drafting in Word and keep your negotiation comments focused on the actual issue rather than just the wording.

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Related resources

If you are working through clause issues in a specific deal type, these guides and pages can help you go deeper:

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