Legalese - Subject To - What does it mean?

LEGALESE: “SUBJECT TO”

The phrase “subject to” is used quite a lot in contracts. It indicates to a reader that they should cross reference the current clause they are reading (Clause 1) with another clause elsewhere in the contract (Clause 2). Clause 2 can either be on the same page, a page further ahead or on a preceding page.

The purpose of Clause 2 will generally be to set out an exception to the main rule established in Clause 1. The phrase “subject to” thus establishes the hierarchical priority between the two clauses to the extent that there is an overlap between the two.

Example:

Clause 1: Subject to Clause 2 neither party to this Contract shall assign its rights under this Contract.

Clause 2: The Seller may assign its rights under this Contract from the date falling 12 months after the date of this Contract.

The effect of the above is that neither party can transfer their rights under the contract (main rule) except that the seller can once 12 months has passed from the date of the contract (exception to the main rule).

Should you need expert legal advice regarding a contractual matter, please contact Joseph Seyed Hossein at joseph.hossein@fieldingsporter.co.uk or telephone 01204 540 900.

The contents of this article are for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.