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Are Definitions really that important in a Commercial Contract?

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Question added by Mohammed Amin Petiwala , CFO , Osool Poultry SAOC
Date Posted: 2016/02/16
Vaseem Ahamad
by Vaseem Ahamad , Associate Director Operations , Perfetti Van Melle

If the subject matter is technical in nature and not self explanatory then it is advisable clarify the terms by defining them in plain English.

This helps to remove the vague element from the contract.

 

 

Gulfam Aslam
by Gulfam Aslam , Manager Contracts and Procurement , Pakistan Refinery Limited

Yes, indeed. Also it is easier to refer the defined term instead of repeating the same phrase everywhere in the Contract. Defined terms carries a detailed description for example "Work" with Capital "W" will have a detailed scope that has to be carried out under that Contract.

Amer Al Qahtani-PhD
by Amer Al Qahtani-PhD , Assistant Professor , Alasala University

Yes, this is because it provides contracting parties with an explanation of the exact meaning of  terms or expressions in the contract.  With this clarification of these terms and expression, it is assumed that contracting parties will possibly be certain in interpreting all legal aspects in the contract. Therefore, there will be no possibility for misunderstanding these terms. 

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