Within Contracts
The small definitions that change the whole deal
Defined terms can make a routine clause much broader than it first appears, especially for services, affiliates, losses, and confidentiality.
On this page
- Capitalised terms that deserve immediate checking
- Includes, excludes, and repeated uses
- How broad definitions reshape later clauses
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Introduction
One of the fastest ways to spot hidden contract risk is to stop treating the definitions section as administrative boilerplate. In many agreements, the real scope of a party’s obligations is not created by the operative clause itself but by the meaning assigned to a handful of capitalised terms. A confidentiality obligation, indemnity, service commitment, or licence grant can become dramatically broader because a defined term quietly expands what the clause covers. Defined terms often override ordinary language, meaning that the contract’s private dictionary controls the rest of the document. [LegalVision+2Maddin Hauser]legalvision.com.auwhat are defined terms in contractsWhat are Defined Terms in Contracts?15 Aug 2025 — Defined terms in a contract are capitalised words given a specific meaning w…
For readers trying to increase contract-reading speed, this creates an important shortcut: before analysing a clause in detail, check the definitions that power it. A few minutes spent on definitions can explain obligations that would otherwise require rereading multiple sections.
Capitalised terms that deserve immediate checking
Not every defined term deserves equal attention. Certain categories routinely determine how much risk a contract transfers.
Terms such as Services, Deliverables, Confidential Information, Losses, Claims, Affiliate, Intellectual Property, and Control often appear harmless because they resemble ordinary business language. However, once capitalised and defined, they may carry meanings far broader than their everyday use. [LegalVision]legalvision.com.auwhat are defined terms in contractsWhat are Defined Terms in Contracts?15 Aug 2025 — Defined terms in a contract are capitalised words given a specific meaning w…
A useful speed-reading technique is to flag any capitalised term that appears in a key obligation and immediately answer three questions:
- What does the definition include?
- What does it expressly exclude?
- Does the definition refer to other defined terms?
The third question matters because contracts frequently build definitions on top of one another. A broad definition of “Affiliate” can expand a confidentiality obligation, which then expands an indemnity, which then increases liability exposure elsewhere in the agreement. [Centre for Innovative Commerce CC]commercii.co.zaCentre for Innovative Commerce CCDefining "Affiliate" in ContractsCentre for Innovative…January 2, 2026 — 2 Jan 2026 — Standard wording: “Affiliate means any entity that directly or indirectly control…
Includes, excludes, and repeated uses
The most common expansion mechanism is the word includes.
In ordinary conversation, people often assume that a list defines a category. Contract drafting frequently works the opposite way. Terms such as “including”, “including but not limited to”, and “without limitation” are commonly used to signal that examples are illustrative rather than exhaustive. As a result, the listed items do not restrict the broader category that precedes them. [Adams on Contract Drafting+2Practical Law]adamsdrafting.comAdams on Contract Drafting“Including Without Limitation”Here's how Black's Law Dictionary defines include.Read more…
Consider a definition stating:
Confidential Information includes customer data, pricing information, software code, marketing plans, and business forecasts.
A casual reader may focus on the listed items. Legally, the definition may be much broader, because the list serves only as examples of information already captured by the opening language. Sample confidentiality definitions commonly extend protection to virtually any non-public business information and sometimes information belonging to affiliates or customers as well. [Afterpattern]afterpattern.comDefinition of confidential information clause samplesYesterday — “Confidential Information” means any information, technical…
The opposite expansion technique appears when a definition uses both means and includes. In legal drafting, “means” typically establishes a core definition, while “includes” enlarges it further. A reader who notices only the initial wording may miss the additional categories added later in the definition. [LexisNexis]lexisnexis.comMeans and includes Meaning | Legal GlossaryIn legal drafting, “means and includes” signals that a defined term has a fixed core…
Repeated use is equally important. A definition that appears modest in isolation may occur dozens of times throughout an agreement. Contract drafting specialists regularly emphasise that defined terms are intended to operate consistently across the document, which means one broad definition can reshape numerous unrelated clauses simultaneously. [Gowling WLG+2Morgan Lewis]gowlingwlg.comGowling WLGEnsure that defined terms are used consistently; ambiguity…11 Jul 2017 — Defined terms can greatly simplify contract wordin…
How broad definitions reshape later clauses
Confidential information that becomes almost everything
Confidentiality clauses often look balanced when read alone. The hidden issue is usually the definition of confidential information.
Many agreements define confidential information to include technical information, business plans, customer information, financial data, know-how, future projects, and information that a reasonable person would regard as confidential. Some definitions also extend protection to information received from affiliates, suppliers, or customers. [Afterpattern]afterpattern.comDefinition of confidential information clause samplesYesterday — “Confidential Information” means any information, technical…
The practical effect is that a clause appearing to protect trade secrets may instead govern nearly every non-public communication exchanged during the relationship.
Affiliates that multiply the number of protected parties
The definition of Affiliate is another common source of hidden expansion.
A standard affiliate definition often covers entities that directly or indirectly control, are controlled by, or are under common control with a party. In large corporate groups, that wording can extend rights and obligations far beyond the company named on the signature page. [weagree.com]weagree.comSubsidiaries and AffiliatesContract wording - WeagreeAffiliate means, in relation to a person, any company or other entity, whether or not with legal personality, w…
For example, a licence granted to a company and its affiliates may effectively extend to numerous subsidiaries. Likewise, confidentiality obligations owed to one contracting party may become obligations owed to a much larger corporate family. Contract commentators frequently warn that broad affiliate definitions can introduce unexpected liabilities and operational burdens if their scope is not carefully reviewed. [ITLawCo]itlawco.comaffiliates in contracts navigating risks and crafting clarityAffiliates in contracts: Navigating risks and crafting clarity28 Oct 2024 — Affiliates in contracts: avoid pitfalls, manage risks…
Losses and claims that widen indemnity exposure
Indemnity clauses often depend on defined terms such as Losses, Damages, or Claims.
A reader may assume liability covers direct financial harm. The definition may instead include legal fees, investigation costs, penalties, settlements, administrative expenses, and other categories of loss. Once those items are embedded in the definition, the indemnity obligation automatically expands without any obvious change to the indemnity clause itself. [Securities and Exchange Commission]sec.goviti 2020127xexhibit101urities and Exchange Commissioniti-2020127xexhibit101“Confidentiality Agreement” has the meaning set forth in Section 5.14 “Contract”…
This is why experienced contract reviewers often read indemnity definitions before analysing indemnity wording.
The fastest review method for definitions
For speed-focused contract reading, definitions should not be read linearly from beginning to end. A more efficient approach is targeted review.
When encountering a major obligation, pause and inspect the definitions behind the key capitalised terms. Pay particular attention to:
- Terms followed by long lists after the word “including”.
- Definitions containing “means and includes”.
- References to affiliates, successors, subcontractors, or customers.
- Definitions that incorporate other defined terms. [weagree.com]weagree.comDefinitions in contracts – 22 best practice rulesAt the same time, it is a contract drafting discipline.Read more…
- Definitions appearing simple but used repeatedly throughout the agreement.
This approach reduces the need to reread entire sections because it identifies the mechanism that often drives hidden risk: a small definition that silently changes the meaning of everything built upon it. A contract may devote only a few lines to a definition, yet those lines can determine the scope of confidentiality duties, indemnity exposure, service obligations, and rights granted across the entire deal. [LegalVision+2Maddin Hauser]legalvision.com.auwhat are defined terms in contractsWhat are Defined Terms in Contracts?15 Aug 2025 — Defined terms in a contract are capitalised words given a specific meaning w…
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Endnotes
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Source: weagree.com
Title: Definitions in contracts – 22 best [practice]({{ ‘practice/’ | relative_url }}) rules
Link: https://weagree.com/clm/contracts/contract-clauses-explained/definitions-in-contracts-22-best-practice-rules/Source snippet
At the same time, it is a contract drafting discipline.Read more...
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Source: commercii.co.za
Title: Centre for Innovative Commerce CCDefining “Affiliate” in Contracts
Link: https://www.commercii.co.za/defining-affiliate-in-contracts/Source snippet
Centre for Innovative...January 2, 2026 — 2 Jan 2026 — Standard wording: “Affiliate means any entity that directly or indirectly control...
Published: January 2, 2026
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Source: itlawco.com
Title: affiliates in contracts navigating risks and crafting clarity
Link: https://itlawco.com/affiliates-in-contracts-navigating-risks-and-crafting-clarity/Source snippet
Affiliates in contracts: Navigating risks and crafting clarity28 Oct 2024 — Affiliates in contracts: avoid pitfalls, manage risks...
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Source: afterpattern.com
Link: https://afterpattern.com/clauses/definition-of-confidential-informationSource snippet
Definition of confidential information clause samplesYesterday — “Confidential Information” means any information, technical...
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Source: lexisnexis.com
Link: https://www.lexisnexis.com/en-gb/legal/glossary/means-includesSource snippet
Means and includes Meaning | Legal GlossaryIn legal drafting, “means and includes” signals that a defined term has a fixed core...
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Source: gowlingwlg.com
Link: https://gowlingwlg.com/en/insights-resources/articles/2017/ensure-that-defined-terms-are-used-consistently-aSource snippet
Gowling WLGEnsure that defined terms are used consistently; ambiguity...11 Jul 2017 — Defined terms can greatly simplify contract wordin...
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Source: weagree.com
Title: Consistency in contracts
Link: https://weagree.com/clm/contracts/contract-drafting-principles/consistency-in-contracts/Source snippet
Consistent order of words. A drafter should ensure that there is consistent usage of all terms when drafting a contract. For examp...
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Source: weagree.com
Title: Subsidiaries and Affiliates
Link: https://weagree.com/clm/contracts/contract-wording/subsidiaries-and-affiliates/Source snippet
Contract wording - WeagreeAffiliate means, in relation to a person, any company or other entity, whether or not with legal personality, w...
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Source: weagree.com
Link: https://weagree.com/clm/contracts/contract-wording/avoid-including-without-limitation/Source snippet
Including without limitation must be avoided in contractsContract drafters often want to clarify their dry and abstract wording by specif...
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Source: legalvision.com.au
Title: what are defined terms in contracts
Link: https://legalvision.com.au/what-are-defined-terms-in-contracts/Source snippet
What are Defined Terms in Contracts?15 Aug 2025 — Defined terms in a contract are capitalised words given a specific meaning w...
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Source: maddinhauser.com
Title: defined terms in a contract matter the why when how and where of defined terms
Link: https://maddinhauser.com/defined-terms-in-a-contract-matter-the-why-when-how-and-where-of-defined-terms/Source snippet
Defined Terms in a Contract Matter: The Why, When, How...6 Sept 2022 — The primary reason to define terms in a contract is to align expe...
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Source: adamsdrafting.com
Title: Adams on Contract Drafting“Including Without Limitation”
Link: https://www.adamsdrafting.com/including-without-limitation/Source snippet
Here's how Black's Law Dictionary defines include.Read more...
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Source: ca.practicallaw.thomsonreuters.com
Link: https://ca.practicallaw.thomsonreuters.com/a-005-0432?contextData=%28sc.Default%29&transitionType=DefaultSource snippet
is the effect, in a contract, of writing "including" but not...Adding the words "without limitation", or some similar expression, means...
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Source: morganlewis.com
Title: back to basics the use and [purpose]({{ ‘purpose/’ | relative_url }}) of defined terms
Link: https://www.morganlewis.com/blogs/sourcingatmorganlewis/2024/02/back-to-basics-the-use-and-purpose-of-defined-termsSource snippet
Back to Basics: The Use and Purpose of Defined Terms9 Feb 2024 — Defined terms are often included at the beginning of and/or throughout a...
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Source: sec.gov
Title: iti 2020127xexhibit101
Link: https://www.sec.gov/Archives/edgar/data/350868/000035086820000014/iti-2020127xexhibit101.htmSource snippet
urities and Exchange Commissioniti-2020127xexhibit101“Confidentiality Agreement” has the meaning set forth in Section 5.14 “Contract”...
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Source: adamsdrafting.com
Link: https://www.adamsdrafting.com/an-update-on-including-but-not-limited-to/Source snippet
An Update on "Including But Not Limited To"14 Sept 2015 — In my post I say that courts have proved willing to consider that including or...
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Source: adamsdrafting.com
Title: joshua stein on defined terms
Link: https://www.adamsdrafting.com/joshua-stein-on-defined-terms/Source snippet
1 Jul 2013 — In it, Joshua makes some general points that apply to using defined terms in any kind of business contract.Read more...
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Source: uk.practicallaw.thomsonreuters.com
Link: https://uk.practicallaw.thomsonreuters.com/1-382-3221?contextData=%28sc.Default%29&transitionType=DefaultSource snippet
Practical Law - Thomson ReutersExamples of affiliates include executive officers, directors, large stockholders, subsidiaries, parent e...
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Source: lexology.com
Link: https://www.lexology.com/library/detail.aspx?g=32a354ce-27b7-4eb4-8479-769b56ade1eeSource snippet
Defined Terms - ensure they are drafted with caution19 Apr 2018 — Although the defined term had not been used, the term “main contract” w...
Additional References
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Source: contractcodex.com
Link: https://www.contractcodex.com/contracts/nda/affiliatesSource snippet
AffiliatesAn “Affiliate” means any person, partnership, joint venture, corporation or other form of enterprise, domestic or foreign, incl...
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Source: netlawman.co.uk
Link: https://www.netlawman.co.uk/ia/defined-terms-in-legal-documents?srsltid=AfmBOop1oIHVxpyBgLuPV_EeKDZe_7siA08dmaERCqvdjR14C65jtrlBSource snippet
Defined Terms In Legal Documents: How They WorkAn explanation of why legal document draftsmen define terms, and when words should and sho...
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Source: mallesons.com
Link: https://www.mallesons.com/au/en/insights/latest-thinking/what-effect-do-the-words-for-the-avoidance-of-doubt-or-without-limitation-have-when-used-in-an-it-contract.htmlSource snippet
What effect do the words 'for the avoidance of doubt'...20 May 2025 — The phrase 'without limitation' is often used where a party wishes...
Published: May 2025
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Source: fynk.com
Link: https://fynk.com/en/clauses/defined-terms/ -
Source: linkedin.com
Link: https://www.linkedin.com/posts/safa-baber-286878158_including-but-not-limited-to-a-small-activity-7363179790515810304-rn-JSource snippet
A Small Phrase with Big Impact Catch-all [phrases]({{ 'phrases/' | relative_url }}) are a subtle yet powerful tool in contract drafting.Read more...
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Source: linkedin.com
Title: How To Use Defined Terms In Your Legal Contracts Efficiency
Link: https://www.linkedin.com/pulse/how-use-defined-terms-your-legal-contracts-amy-grubbSource snippet
How To Use Defined Terms In Your Legal ContractsEfficiency - by defining terms used repeatedly in a contract it saves the drafter from ha...
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Source: holdingredlich.com
Title: But, defining a word is hard and drafting often worrisome
Link: https://www.holdingredlich.com/commercial-contracts-defining-words-adopting-legislation-and-dealing-with-contingenciesSource snippet
Holding RedlichCommercial contracts – defining words, adopting...26 Nov 2020 — Contracts generally need defined terms, they provide conc...
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Source: instagram.com
Link: https://www.instagram.com/reel/DZFmy7LSjzP/Source snippet
Example: confidential information includes customer lists, pricing, marketing plans...
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Source: ke.org.uk
Link: https://ke.org.uk/sites/praxisunico.org.uk/files/1-CDA_1.pdfSource snippet
another – the disclosure may be mutual (i.e. both/all parties...Read more...
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Source: law.georgetown.edu
Title: Tips for Achieving Clarity in Contract Drafting
Link: https://www.law.georgetown.edu/wp-content/uploads/2018/07/Tips-for-Achieving-Clarity-in-Contract-Drafting.pdfSource snippet
Check Definitions: Check the “Definitions” Section or defined terms found throughout the contract to ensure (1) you have consistently use...
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