A standard consideration clause to be used in commercial contracts. This Standard Clause has integrated drafting notes with important explanations and drafting and negotiating tips.
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A consideration clause outlines payment in exchange for the promise of something of value, like a service, property, a promise etc.
A consideration clause is a provision most commonly used in insurance policies that provides information on how much the coverage costs and when to pay. Other industries can also use consideration clauses. In real estate agreements, consideration clauses outline compensation according to the terms of the contract.
What does consideration mean in an agreement?
Consideration is basically when one party promises to do something they are not legally compelled to do, like selling their car, providing a service, etc. in exchange for the promise of being compensated. This promise is the consideration for the service or property.
Deferred consideration
In certain instances, consideration can be deferred. This could be done by spreading out the payment instead of paying everything at once. When acquiring a company, for example, certain payment milestones can be linked to performance goals. This serves to ensure that the buyer receives the promised value they purchased.
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The Parties expressly agree that no royalty, remuneration, licence fee, costs or other moneys whatsoever shall be payable to the Author. The Publisher and the Author each have the right to authorise collective management organisations (“CMOs”) of their choice to manage some of their rights. Reprographic and other collectively managed rights in the Contribution (“Collective Rights”) have been or may be licensed on a non-exclusive basis by each of the Publisher and the Author to their respective CMOs to administer the Collective Rights under their reprographic and other collective licensing schemes (“Collective Licences”). Notwithstanding the other provisions of this Clause, the Publisher and the Author shall each receive and retain their share of revenue from use of the Contribution under Collective Licences from, and in accordance with, the distribution terms of their respective CMOs. To the fullest extent permitted by law, any such revenue is the sole property of the Publisher and the Author respectively and, if applicable, the registration and taxation of that revenue is the sole responsibility of the respective recipient party. The Publisher and the Author shall cooperate as necessary in the event of any change to the licensing arrangements set out in this Clause. New Editions The Publisher has the sole right to determine whether to publish any subsequent edition of the Work containing an updated version of the Contribution, but only after reasonable consultation with the Author. Once notified by the Publisher that an update of the Contribution is deemed necessary, the Author agrees to deliver an updated manuscript in accordance with the terms of the Clause \"The Author's Responsibilities\" and the other relevant provisions of this Agreement, together with the material for any new illustrations and any other supporting content including media enhancements, within a reasonable period of time (as determined by the Publisher) after such notification. Substantial changes in the nature or size of the Contribution require the written approval of the Publisher at its sole discretion. The terms of this Agreement shall apply to any new edition of the Work that is published under this \"New Editions\" Clause. If the Author, for whatever reason, is unwilling, unable or fails (including as a result of death or incapacity) to submit an updated manuscript that meets the terms of this Agreement within the above stated period, then the Publisher is entitled to revise, update and publish the content of the existing edition or to designate one or more individuals (which, where co-authors have entered into this Agreement, may be one or more of the co-authors) to prepare this and any future editions provided that the new editions shall not contain anything that is a derogatory use of the Author's work that demonstrably damages the Author’s academic reputation. In such case, the Author shall not participate in preparing any subsequent editions. The Author agrees that the Publisher shall be entitled but not obliged to continue to use the name of the Author on any new editions of the Work together with the names of the person or persons who contributed to the new editions. 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