# Both Parties > Both Parties means the two main entities stated in the [contract]. **Term:** Both Parties **Last updated:** 2026-07-29 ## Definition ## What "both parties" means in a contract In a contract, "both parties" is a shorthand reference to the two principal entities who enter into the agreement and are bound by its terms. When a clause says something applies to both parties, it is telling the reader that a right, duty, cost, or restriction sits on each side equally rather than on only one of them. The phrase depends entirely on who the agreement first names as the parties, so its meaning is inherited from the definitions and the opening recitals rather than created on its own. ### How the parties are identified Most well drafted agreements name each party in the opening paragraph, give each a defined label such as "the Supplier" or "the Client", and then use "both parties" to refer to them collectively. Getting these identifications right matters because a party can be an individual, a company, a partnership, or a public body, and the exact legal entity determines who can sue, who can be sued, and whose assets stand behind the promises. - The full legal name and, for companies, a registration number or address. - The defined label used throughout the rest of the document. - Any group companies, successors, or assignees that the definition sweeps in. ### Where the phrase appears "Both parties" tends to appear in the clauses that describe mutual conduct. It is common in confidentiality provisions where each side must protect the other's information, in dispute resolution clauses that require both to attempt mediation before litigation, in variation clauses that require written agreement from each side, and in termination provisions that let either side exit on stated grounds. These mutual clauses are frequent in commercial dealings across [legal services](https://www.genieai.co/industry/legal-services) and many other sectors, wherever two organizations share obligations under one document. ### Why the exact wording matters The difference between "a party", "either party", "each party", and "both parties" is not cosmetic. "Both parties" usually signals a joint requirement that only takes effect when the two act together, for example a variation that is valid only if both sign. "Either party" signals a unilateral power that one side can exercise alone, such as a right to terminate. Confusing the two can turn a shared safeguard into a one sided power, or lock a party into needing the other's cooperation for something it expected to control. Because obligations flow from these labels, a drafting slip can shift risk in ways neither side intended. ### Drafting considerations When you draft or review an agreement, treat the party definitions as the foundation for every later reference. Teams that handle high volumes of agreements, including [in-house legal teams](https://www.genieai.co/legal-ai-for-teams/in-house-legal), often keep a consistent style so that collective and individual references never blur together. - Define each party once, then use the defined label consistently. - Choose deliberately between "both parties", "each party", and "either party" in every clause. - Check that mutual obligations really are mutual, and that unilateral rights are not accidentally made joint. - Confirm that the named entities are the ones that will actually perform, so obligations rest with a party that can meet them. Read carefully, "both parties" is a simple device that keeps an agreement balanced and clear about who owes what. Read carelessly, it can obscure whether a promise is shared or one sided. Because the phrase carries no meaning beyond the entities the contract names, the reliability of every "both parties" reference is only as strong as the party definitions it points back to under the law governing the contract. ## Context ### Relevant circumstances - Creation of a new business relationship - Signing of a lease - Entering a non-disclosure agreement - Starting a joint venture project ### Relevant sectors - Legal Services ## Relevant contract types - [Service Agreement](https://www.genieai.co/en-us/template-type/service-agreement) - [Non-Disclosure Agreement](https://www.genieai.co/en-us/template-type/non-disclosure-agreement) - [Employment Contract](https://www.genieai.co/en-us/template-type/employment-contract) --- This is the Markdown representation of [https://www.genieai.co/en-us/define/both-parties](https://www.genieai.co/en-us/define/both-parties), provided for AI agents and crawlers. The HTML page is canonical. See [/llms.txt](https://www.genieai.co/llms.txt) for the full content map.