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Subject to contract: Definition, Example and Related Terms

What does it mean when something is Subject to contract ?

Subject to contract is a phrase often used during negotiations for a deal or an agreement. Think of it like a 'conditions apply' tag that you might see on advertisements. It's just a way for the people in the negotiation to say that, 'Hey, we've agreed on the terms, but we want to put it into a formal written contract before we're legally bound to it.'

An interesting fact, the phrase 'Subject to contract' means that we've reached an understanding, but we're not 100% locked in yet. This gives both parties a sort of safety net until all the legal jargon is nailed down in a contract.


  • Situation Usage
    Company A and Company B are considering a partnership. Company A sends a partnership proposal to Company B. At the bottom of the proposal, it states 'Subject to contract'.
    Car buyer and Car seller agreed on the price. The car buyer and seller orally agreed on the price, but the deal is 'Subject to contract', meaning it's not legally binding until the paperwork is finished.

Related terms