Contract Glossary
Contractual Obligation
Definition
A legally enforceable duty created by a contract. When you sign a contract, every 'shall,' 'must,' and 'agrees to' creates a contractual obligation, a promise the law will hold you to. Fail to perform, and the other party can sue for breach. Obligations can be mutual (both parties owe each other) or one-sided.
In Practice
You sign a services agreement to build a website for $15,000. Your contractual obligations include: delivering mockups by March 1, completing development by April 15, providing 30 days of post-launch support, and not working for the client's direct competitors during the project. The client's obligations include: providing brand assets by February 15, reviewing deliverables within 5 business days, and paying milestone invoices within 14 days. Every one of these is independently enforceable.
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