Clause

In finance, the term clause describes a statement or a portion of a statement which is included in a legal contract.

The broader definition of the word is: a fragment of text which forms part of a sentence and contains a predicate and subject.

In legal contracts such as insurance policies, loan agreements and rental contracts, clauses are used to specify the terms and conditions of the agreement and to list exclusions and exceptions.

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Daniel Dreier is editor and personal finance expert at moneyland.ch.

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