RETENTION CLAUSE Meaning and
Definition
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A retention clause is a contractual provision that is commonly included in many legal agreements and contracts. It refers to a specific clause that allows one party to retain a certain portion of the payment owed to the other party until certain conditions are met or obligations fulfilled. The purpose of the retention clause is to provide security and protection to the retaining party against any potential breaches or non-compliance by the other party.
Typically, the retention clause specifies the percentage or amount of money that will be retained from the total payment, and the conditions under which it will be released. These conditions may include the satisfactory completion of certain tasks, delivery of goods or services, or resolution of any outstanding disputes or claims. Once all the specified conditions have been fulfilled, the retaining party is obliged to release the withheld amount to the other party.
Retaining a certain portion of the payment under a retention clause serves as an incentive for the other party to meet their contractual obligations fully and in a timely manner. This clause safeguards the interests and mitigates potential risks for the retaining party, ensuring that their rights and interests are protected in case of any contractual breaches or disputes.
Overall, a retention clause acts as a mechanism to promote compliance with contractual obligations and ensure the fair and equitable execution of agreements between parties involved.
Common Misspellings for RETENTION CLAUSE
- eetention clause
- detention clause
- fetention clause
- tetention clause
- 5etention clause
- 4etention clause
- rwtention clause
- rstention clause
- rdtention clause
- rrtention clause
- r4tention clause
- r3tention clause
- rerention clause
- refention clause
- regention clause
- reyention clause
- re6ention clause
- re5ention clause
- retwntion clause
- retsntion clause
Etymology of RETENTION CLAUSE
The word "retention clause" is a combination of two separate terms: "retention" and "clause".
- "Retention" comes from the Latin word "retentus", which means "to hold back" or "to keep". In the context of legal contracts, "retention" refers to the act of keeping or holding something, usually a sum of money, as a form of security or guarantee. It implies that a certain amount of money, usually a percentage of the contract value, will be retained or withheld until the completion of the agreed-upon obligations or requirements.
- "Clause" comes from the Latin word "clausula", which means "a subordinate section or paragraph within a larger legal document". A clause is a specific provision or condition within a contract that defines the rights, obligations, or restrictions of the involved parties.
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