Four-Element Contractual Provision

A Four-Element Contractual Provision is a atomic contract provision that contains four distinct but interrelated contractual stipulations, contractual conditions or contractual requirements.

• Context:
  • It can can from being a Four-Element Obligation Provision to being a Four-Element Permission Provision to being a Four-Element Declarative Provision.
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• Example(s):
  • Four-Element Obligation Provisions:
    • Four-Element Late Payment Penalty and Interest Provision:
      • “[If payment is not made within 15 days of the due date]¹_{triggering condition} [a late fee of $100 will be applied]²_{obligation/penalty} [and interest will accrue at a rate of 1% per month]³_{additional obligation/penalty} [until full payment is received]⁴_{duration of obligation/penalty}."
    • Four-Element Delivery and Acceptance Provision:
      • “[Seller shall deliver the goods to Buyer's warehouse]¹_{primary obligation} [by June 30, 2023,]²_{deadline/requirement} [at which point Buyer shall promptly inspect the goods]³_{secondary obligation} [and provide written notice of acceptance or rejection within 10 business days]⁴_{additional requirement}."
  • Four-Element Permission Provisions:
    • Four-Element Intellectual Property Ownership and License Provision:
      • “[Contractor agrees that all work product created under this agreement shall be considered a work made for hire,]¹_{acknowledgement/agreement} [with all intellectual property rights owned exclusively by Client,]²_{ownership declaration} [and Contractor hereby assigns to Client any and all such rights.]³_{assignment of rights} [Client grants Contractor a limited, non-exclusive license to use the work product solely for the purpose of performing the services under this agreement]⁴_{permission/license grant}."
  • Four-Element Declarative Provisions:
    • Four-Element Title Transfer upon Full Payment Provision:
      • “[Title to the property shall transfer to the buyer]¹_{primary declaration} [upon the execution of this agreement]²_{timing of declaration} [conditional upon the full payment of the purchase price]³_{condition for declaration} [by the closing date specified herein]⁴_{deadline for condition}."
• Counter-Example(s):
  • a Two Element Provision, Three Element Provision, Five Element Provision.
  • a Four-Sentence Contractual Provision.
• See: Conditional Contractual Element, Contract Modification, Contractual Synthesis, Interdependent Contract Clause, Legal Drafting Technique, Provision Complexity, Risk Mitigation in Contracts, Contractual Provision Annotation.

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