Arc Meaning in Contract

When it comes to reading and understanding contracts, the term “arc” may come up. But what does it actually mean?

In contract law, “arc” stands for “anti-reliance clause.” This clause is often included in contracts to limit the liability of one party if the other party relies on false or misleading information provided during the negotiation process.

The purpose of an anti-reliance clause is to protect the party providing information from being held responsible if the other party makes a decision based on that information and suffers a loss as a result. It places the burden of due diligence on the relying party, who is expected to verify the accuracy of any information provided.

An anti-reliance clause typically states that the information provided is not guaranteed to be accurate or complete, and that the relying party should conduct their own due diligence and not rely solely on the information provided.

For example, imagine that a company is negotiating a contract to purchase a piece of property. The seller provides information about the property`s zoning, stating that it is zoned for commercial use. However, it is later revealed that the property is actually zoned for residential use only. If an anti-reliance clause is included in the contract, the buyer cannot hold the seller responsible for any losses incurred as a result of relying on the inaccurate information provided.

It`s important to note that anti-reliance clauses do not protect parties who engage in fraud or intentional misrepresentation. If one party intentionally provides false information, they may still be held liable for any resulting losses even if an anti-reliance clause is included in the contract.

In summary, “arc” stands for “anti-reliance clause” in contract law. This clause is included in contracts to limit the liability of one party if the other party relies on false or misleading information provided during the negotiation process. While it can provide some protection, it`s important for both parties to conduct their own due diligence and not rely solely on the information provided.