We have gone through a number of features in contracts, including the basic elements of contracts, the Title, the Parties, and the Preamble or Whereas Clause. Of course, the form of a contract and the arrangement of its provisions greatly vary. In fact, a feature or provision discussed here may be merged with other provisions in actual contracts. You may not follow the arrangement used in this Contract Series, but let's just agree for convenience that the next feature or provision is the Term or Period.

A period is defined as a space of time which has an influence on obligation as a result of a juridical act, and either suspends their demandableness or produces their extinguishment. Generally, the provision on term or period in contracts looks like this: This agreement shall be for a term of one (1) year, commencing on 1 September 2007 and ending on 31 August 2008.

The significance of the term or period, based on the example given above, is generally simple - it is the duration within which the contract remains in effect. In the example given above, it is understood that the contract is effective from 1 September 2007 to 31 August 2008. It may not be that simple, however, in certain circumstances. For instance, the term or period could contain a proviso, like this:

Term/Period. This agreement shall be for a term of one (1) year, commencing on 1 September 2007 and ending on 31 August 2008, or for the duration of the Project, without prejudice to the termination of this consultancy agreement should the Project be terminated prior to the foregoing date.

The proviso implies that the contract may terminate earlier, if the project is finished or terminated before 31 August 2008. However, in labor contracts, there have been cases wherein such proviso is declared contrary to law, a circumvention of an employee's right to security of tenure.  

The term may also vary in other contracts. For instance, in a promissory note or a loan, the term would refer to the date when the debt or loan would become payable in the future.

 

Indeed, we must remember that there are different kinds of term or period. A term may be suspensive (the time which must lapse before the obligation can be demanded) or resolutory (the time when the obligation terminates). A term may also be voluntary (fixed by the parties), legal (fixed by law, as in contracts of lease wherein the parties fail or refuse to renew the original contract) or judicial (fixed by the courts, as when the parties fail to provide a period, but a period was intended based on the nature and circumstances of the obligation). We must also remember that a provision in a contract should not be read in isolation, but in conjunction with the rest of the provisions. In other words, it may not be as simple as it looks.