A more thorough explanation:

Definition: Sum certain is a specific amount of money that is agreed upon in a contract. This amount can be for a purchase or a loan. The key feature of a sum certain is that the amount is clearly defined and cannot be interpreted differently by either party. It is different from a price that is based on a changing value, such as the stock market or interest rates.

• When buying a car, the sum certain would be the agreed-upon purchase price. For example, if the car costs $10,000, then that is the sum certain.
• When taking out a loan, the sum certain would be the amount borrowed. For example, if someone borrows $5,000, then that is the sum certain.

These examples illustrate the definition of sum certain because in both cases, the amount of money is clearly defined and agreed upon by both parties. There is no room for interpretation or confusion about the amount of money involved.