The phrase “sum certain” is a legal term used to describe an exact amount of money in a contract or legal agreement. It is an agreed-upon amount, which is set out beforehand and is not to be negotiated or changed. The purpose of this type of agreement is to ensure that both parties in the agreement understand what is being agreed upon and what they are expected to pay.
Modern Examples Where Sum Certain Is Used
Many common agreements today use sum certain to ensure each party understand the exact amount of money that will be exchanged. This can be seen in real estate contracts, loan agreements, car loans, and many other kinds of financial agreements. By outlining a sum certain, both the buyer and the seller understand how much will be exchanged and it prevents any potential conflict from arising over an unclear agreement.
Why Use Sum Certain in Financial Agreements?
Using sum certain in legal agreements creates a more secure and definitive approach to any financial agreement. It eliminates any potential misunderstandings or confusion about how much money is expected to be exchanged in the transaction. Additionally, sum certain agreements are legally binding documents which help to ensure both parties uphold the agreement and pay the exact amount as outlined. This helps to prevent any potential disputes or disagreements between the two parties.
In Summary:
Sum certain is a legal term used to describe an exact amount of money that is to be exchanged in a legal agreement. This ensures that both parties understand the exact amount of money that will exchanged and prevents any potential misunderstandings or disputes from arising. Modern examples of this include real estate contracts, car loans, and other financial agreements. By understanding the meaning of ‘sum certain’, individuals and businesses can ensure they are getting the exact amount of money outlined in an agreement.