Legal Definitions - side agreement

A side agreement is a supplementary contract or understanding made between parties that accompanies a primary, often more comprehensive, agreement. While it is a separate document or understanding, it is legally binding and typically serves to clarify, modify, add details to, or sometimes even contradict specific terms of the main agreement. It often addresses particular aspects, contingencies, or exceptions that might not be fully elaborated in the principal contract.

Here are some examples to illustrate the concept of a side agreement:

• Example 1: Real Estate Transaction

  Imagine a couple buying a house. The main document is the official Purchase and Sale Agreement, which outlines the property, price, closing date, and standard inclusions. However, the buyers really want the seller to leave behind a specific, custom-built shed in the backyard, which wasn't explicitly mentioned in the standard inclusions list. The parties might then sign a separate side agreement stating that the seller agrees to include the shed as part of the sale, despite it not being in the primary contract.

  This illustrates a side agreement because it adds a specific, negotiated term to the overall transaction that is not covered by the main, more general purchase agreement.

• Example 2: Commercial Lease

  A small business is signing a standard commercial lease for office space. The main lease document covers rent, term, maintenance responsibilities, and general use. However, the tenant needs specific modifications to the office layout, like installing a new wall and custom shelving, and wants the landlord to contribute to these costs. The landlord and tenant might sign a separate side agreement detailing the exact scope of the tenant improvements, the landlord's financial contribution, and the timeline for completion, which are not standard clauses in the main lease template.

  This example shows a side agreement clarifying and adding specific, negotiated terms regarding property modifications and financial responsibilities that supplement the broader commercial lease.

• Example 3: Employment Contract

  A company hires a new executive, and they sign a comprehensive employment contract covering salary, benefits, job duties, and confidentiality. However, the executive has a unique request: they want the option to work remotely two days a week for the first six months, a flexibility not typically offered to new hires or detailed in the standard employment agreement. The company agrees, and they sign a separate, brief side agreement outlining this specific remote work arrangement and its duration.

  This demonstrates a side agreement providing a specific, individualized term that modifies a standard company policy or adds a particular condition to the general employment relationship.