Glossary

    Contract Management Glossary

    Plain-English definitions of key contract management terms for SMBs. From automatic renewal to vendor lock-in — every term explained with practical advice to stop profit leakage.

    Updated: 5 March 2026

    Core Terms

    Automatic Renewal

    An automatic renewal occurs when a contract continues beyond its end date because neither party gave…

    Core Terms

    Profit Leakage

    Profit leakage is the gradual erosion of margin through costs that are unnecessary but largely invis…

    Core Terms

    Vendor Lock-in

    Vendor lock-in is a situation in which switching away from a supplier becomes so costly, complex, or…

    Core Terms

    Penalty Clause

    A penalty clause (also called a liquidated damages clause) is a contractual provision specifying the…

    Core Terms

    Contract Types

    SLA (Service Level Agreement)

    A Service Level Agreement (SLA) is a document that defines the measurable performance standards a se…

    Contract Types

    License Agreement

    A license agreement is a contract in which the owner of intellectual property — such as software, a…

    Contract Types

    NDA (Non-Disclosure Agreement)

    A non-disclosure agreement (NDA), also called a confidentiality agreement, is a contract in which on…

    Contract Types

    Contract Management

    Contract Management

    Contract management is the systematic process of managing all contracts within an organisation — fro…

    Contract Management

    TCO (Total Cost of Ownership)

    Total Cost of Ownership (TCO) is the calculation of all costs associated with a product or service a…

    Contract Management

    Compliance

    Incoterms

    Incoterms are standardised international trade terms published by the International Chamber of Comme…

    Compliance

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