A glossary of the contract and legal terms you need to know.

Acceptance
A final and unqualified expression of assent to the terms of an offer. It is an unconditional agreement to enter into a contract on the exact terms set by the offeror.
Accidental Landlord
An individual who not consciously intend on taking on the status and legal responsibility of a landlord, but has found themselves in such a role due to circumstances out of their control, such as inheriting a rental property.
Actual occupation
A concept in land law where a person is granted certain rights to a property, most notably an overriding interest enforceable against the property's registered owner, because of the fact they were actually living in or using the property at a particular point in time.
Agency
A fiduciary relationship created by contract or law where one party (principal) grants authority for another (agent) to act on behalf of and under the control of the principal to deal with a third party.
Amendment
A formal change to the terms of an existing contract made by adding, removing, or updating parts of the contract. An amendment must normally be agreed up by all parties to a contract.
Anti-money laundering
Laws, regulations and policies which aim to address the illegal practise of disguising the proceeds of criminal activity by making them appear as though they came for a legitimate source.
Appeal
A legal proceeding in which a higher court is asked to review and overturn the decision of a lower court or a public authority.
Applicable Law
Any and all laws issued or implemented by the government or regulators of the country whose laws apply to a contract. Also includes rules, codes, treaties, licenses, permits and principles of common law which have been deemed applicable in that country.
Arbitration
A legal method to resolving a dispute between parties without going to court. A neutral person (the arbitrator) is appointed to listen to the dispute and made a decision (the award) which the parties agree to accept.
Arrears
The part of a debt that is overdue after missing one or more payments required under a contract. The sum of the arrears is equal to the total amount amassed from the due date of the first missed payment.
As is
A common contractual condition which gives notice to consumers that the product is in its present state or condition. An “as is” notice is to inform the consumer that they are taking a risk on the quality of the good.
Assignment
The legal transfer of a right, benefit, or liability from one party (assignor) to another (assignee).
Associated Employer
The relationship between two employers where one is a company of which the other has control, or both are companies of which a third person has control. In both cases, the control can either be direct or indirect.
Assurance
A promise intended to inspire full confidence in another party.
Assured shorthold tenancy
The most common type of tenancy agreed used in residential letting. It is unique in its limited security of tenure i.e. the landlord can evict the tenant without a reason so long as they follow the correct procedure.
Audit
An official and unbiased inspection of an organisation’s financial statements, typically undertaken by an independent body.
Automated Contract Review
The use of technology by legal professionals to assess contracts, extract certain information from them, and amend the documents.
Bailiff
Agents with special legal powers sent to retrieve debts on behalf of either a creditor or the courts. If a debtor cannot make the necessary payments, a bailiff can repossess their belongings and sell them at an auction.
Bankruptcy
A legal status declared by a court when an individual or a business cannot pay off their debts. An Official Receiver is appointed to oversee the bankruptcy. The debtor's assets are liquidated to repay creditors, and then the rest of their debts are cancelled.
Bargaining Power
This is the relative power of parties in a negotiation to exert influence over each other in order to achieve a deal favourable to themselves.
Bedsit
A form of accommodation which consists of a single room per occupant, with all other occupants sharing facilities such as a living room and a kitchen. A bedsit may be a unit in the legal category of housing known as a house in multiple occupation.
Beneficial interest
An interest (right to) the economic benefit of a property whose legal title may belong to someone else.
Beneficiary
Any person or entity who is set to receive assets or profits from an instrument in which there is distribution, such as a trust, insurance policy, or will.
Binding
A legal or contractual obligation which cannot be broken.
Boiler Plate Clause
These are general and miscellaneous clauses found at the end of most contracts, which can be reused in several contexts without significant changes to them.
Breach of contract
The act of breaking or failing to comply with the terms of a legally binding contract.
Break Clause
A contractual term providing for the early termination of a contract before the fixed term expires. These clauses are typically associated with tenancy agreements, and give either the landlord or tenant the right to end the agreement before the agreed end date.
Brexit
The withdrawal of the UK from the European Union and the European Atomic Energy Community in January 2020, following a public vote to do so in June 2016.
Certainty
An assessment of whether the terms of a contract are sufficiently clear and certain to be able to bind the parties. Uncertain, incomplete, or vague contract terms cannot be relied upon or enforced.
Change of Control
A change of control is the sale or acquisition of the whole or part of a company, by which the control of the company vests in someone other than the original contracting party.
Citizens Advice Bureau
A network of independent charities in the UK which provide free and confidential advice and information to people on a range of civil, consumer and legal matters.
Civil Law
A type of legal system originating in Europe which has been adopted by about 60% of the world. It is historically based on ancient Roman law. Its primary source of law are core principles which have been written and codified into a referable system.
Claim
(Previously known as an action) These are proceedings issued in a court or tribunal to demand compensation, property, or the enforcement of a right from another party.
Claimant
The party in a legal case who brought the claim (started the court proceedings) and is demanding something from the other party.
Clause
Clauses are specific sections within a contract which address and explain specific parts of the agreement. They are often numbered by section and subsection, i.e. Clause 10.1 would refer to section 10, subsection 1 of the contract.
Commercial let
Real property (land and buildings) which is rented to parties so that they can be used for business, rather than residential, purposes.
Common Law
A type of legal system originating in England which has been adopted across the commonwealth. It is historically based on the judicial decisions of courts and similar tribunal. It is characterised by relying on prior case law rather than written codes to resolve disputes.
Common areas
The parts of a property which are available for use by all the tenants, such as a hallway, stairway, or playground.
Common mistake
A situation where both parties to a contract share the same mistake as to the ownership of a property (“res sua”), the subject matter of the contract (“res extincta”), or quality of the subject matter. It can render a contract void or voidable.
Commonhold
A system of land ownership where a property, usually a multi-occupancy building, is divided into flats and common areas. Different people (unit holders) own the freehold of their individual flats, and the freehold of the common areas is owned by the unit holders through a company (commonhold association) which is also responsible for managing the common areas.
Company
A legal entity formed by different individuals in order to undertake commercial business. In the UK, a company must be incorporated at Companies House.
Company Number
A unique combination of numbers and even letters, which is automatically assigned by Companies House to a newly incorporated UK company.
The information in this glossary is for general educational use only, and does not constitute any legal advice on which you should rely. While all the definitions have been carefully drafted and we believe them to be accurate, all information in this glossary is provided “as is” and with no guarantee of completeness.
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