Covenant

From the Latin Latin: convenire, meaning 'to come together' or 'to agree.'.

In one sentence

A binding promise in a contract to do or not do something.

Plain English

A covenant is a serious promise written into a contract. Unlike a casual agreement, a covenant is legally enforceable, and breaking it gives the other party the right to sue for damages. Covenants can be positive (promising to do something) or negative (promising not to do something). They're common in real estate, employment, and business deals.

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Example

A non-compete covenant in an employment contract promises that after leaving the job, the employee won't work for a competitor within 50 miles for two years. If the employee violates this covenant, the employer can sue for breach.

Used in a sentence

“The lease included a covenant requiring the tenant to maintain the property in good condition.”

Related terms

Non-Compete Agreement

A contract clause restricting an employee from working for competitors or starting a competing business after leaving.

Consideration

Something of value exchanged by each party to make a contract binding.

Material Alteration

A significant change to a contract or document that affects its meaning or enforceability.

Breach

A failure to do what a contract requires, such as not paying or not delivering.

Executed Contract

A contract where both parties have fully performed all their obligations.

Contract Interpretation

The process of determining what a contract's words and terms actually mean.

Offer

A proposal to enter into a binding agreement on specific terms.

Acceptance

Agreeing to the exact terms of an offer, creating a binding contract.

This page is a plain-English reference and is not legal advice. Laws vary by jurisdiction and change over time. For specific situations consult a licensed attorney.