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Ad Interim: Definition, Example and Related Terms

What is Ad Interim ?

Ad interim is a Latin phrase meaning 'in the meantime' or 'temporarily.' In contract law, it refers to a temporary or provisional arrangement that is put in place until a permanent solution or final decision can be made. It's like a placeholder agreement that helps keep things running smoothly during transition periods.

For instance, when a company's CEO suddenly resigns, the board might appoint an ad interim CEO to manage the company while they search for a permanent replacement. This ensures business continuity during the transition period.

In commercial contracts, ad interim arrangements are often used when parties need to maintain business operations while negotiating final terms, or when temporary measures are needed during unforeseen circumstances. These arrangements are typically time-bound and include specific conditions about when and how they will be replaced by permanent solutions.

Understanding ad interim provisions is crucial for contract managers as they help bridge gaps and prevent disruptions in business operations during periods of change or uncertainty. However, it's important to clearly define the scope and duration of these temporary arrangements to avoid confusion or potential disputes later.

Example(s)

  • Scenario Description
    A supplier contract is expiring but negotiations for the new contract are still ongoing. The parties agree to an ad interim arrangement to continue supply under the existing terms for three months while they finalize the new contract terms. This prevents disruption to the supply chain during negotiations.
    A key executive leaves suddenly from a joint venture project. The partners appoint an ad interim project manager with limited decision-making authority until they can jointly select a permanent replacement. This ensures the project continues to move forward without delays.