capitalized terms
Definition
Capitalized terms are specific words or phrases in a contract that the parties have given a precise, agreed-upon meaning, shown by writing them with a capital first letter throughout the document. The contract will usually define each capitalized term in a definitions section near the beginning, and that specific definition controls what the word means everywhere it appears in the agreement. This is the legal world's way of making sure that a word like 'Services' or 'Products' means exactly the same thing in paragraph 2 as it does in paragraph 47.
Example
If a contract defines 'Customer' as only the business signing the agreement and not its subsidiaries, then every time you see 'Customer' with a capital C, it carries that narrow meaning, even if you assumed it included your affiliated companies.
Watch Out
Always read the definitions section before signing, because a capitalized term might be defined much more narrowly or broadly than you would naturally assume the word means.
See which terms appear in your contract?
This definition is for informational purposes only and does not constitute legal advice. Please consult with a licensed attorney for legal guidance.