Define: Contemplated

What contemplated means in a contract

In contract drafting, contemplated is a scoping word. It refers to the transactions, obligations, and arrangements that the parties plan for and expect the agreement to bring about, whether those relate to a one-off deal, ongoing business operations, or the handling of intellectual property. When a document speaks of matters contemplated by this agreement, it is drawing a boundary around what the deal is meant to accomplish and, by implication, what falls outside it.

The word carries the sense of something foreseen and intended rather than accidental. That is why it is used to connect obligations to the deal's purpose, so that duties, consents, and restrictions attach to the planned dealings rather than to unrelated activity. In practice it operates as a piece of shorthand: instead of listing every step of a transaction each time, the drafter can refer once to the transactions contemplated by this agreement and rely on that phrase to carry the same meaning throughout the document.

Where the term appears

Contemplated language is a fixture of transactional documents. It is common in a business acquisition agreement, where covenants, closing conditions, and representations are all framed around the transactions the deal is designed to achieve. It also appears throughout an intellectual property agreement, tying the license or assignment to the specific uses the parties have in mind rather than to every conceivable exploitation of the rights.

How the term is defined and measured

Contemplated is usually not defined on its own. Instead its meaning is fixed by the surrounding text, and good drafting makes that anchor explicit.

• Reference point: the transaction or purpose the word points back to.
• Scope: which activities count as within, and outside, what is contemplated.
• Timing: whether it captures present plans only or also future steps needed to complete them.

Why the exact wording matters

Because contemplated defines scope, its use can quietly widen or narrow a party's obligations. A covenant not to take any action inconsistent with the transactions contemplated by this agreement is only as clear as the description of those transactions. If that description is vague, one party may argue that a wide range of conduct is caught, while the other insists the restriction is narrow. In intellectual property terms, the difference between rights granted for the uses contemplated and rights granted outright can decide who owns and can exploit later developments, a point examined in guidance on intellectual property ownership in consulting contracts.

Drafting considerations

To use contemplated safely, drafters should make sure the transactions being referenced are described somewhere with enough precision to give the word content. Where the term appears repeatedly, it should point consistently to the same defined purpose, so it is not read broadly in one clause and narrowly in another. If future steps are intended to be covered, the drafting should say so rather than leaving it to inference. It also helps to test each use of the word by asking what it points back to, since a clause that speaks of the transactions contemplated by this agreement is empty if the agreement never describes those transactions. Because the law governing the contract shapes how courts interpret words of intention and scope, spelling out what is contemplated is more reliable than trusting the reader to fill the gap.