What is it?
Significant is a threshold concept in contract law that determines when certain rights, obligations, or remedies are triggered. It governs whether changes, breaches, or events are substantial enough to affect contractual relationships.
significant
Contract LawLegal glossary term
Quick answer
Significant usually means having substantial importance. In contracts, it matters because it determines when rights or obligations are triggered. Before signing, check if the term is defined with objective criteria.
Definitions
What is significant?
Legal Definition
Significant means having substantial importance or consequence in legal contexts. It triggers specific contractual rights or obligations when a material change or breach occurs. The threshold for 'significant' is often left undefined, creating potential disputes between parties.
Plain-English Translation
Like promising to bring cookies to class but only bringing crumbs, 'significant' means something must actually matter, not just technically exist.
Contract relevance
Why significant matters in contracts
Ignoring the 'significant' threshold can lead to unintended obligations or lost rights. The party relying on the term bears the risk if their interpretation differs from the other party's.
Document context
Where significant appears in documents
| Document type | Section | Why it matters |
|---|---|---|
| Change order provisions | Definition section | Determines when formal approval is needed |
| Material adverse change clauses | Loan agreement covenants | Triggers default rights |
| Termination provisions | Contract termination section | Defines grounds for ending agreement |
| Regulatory disclosures | SEC filings | Determines reporting obligations |
| Insurance policies | Coverage exclusions | Limits claim eligibility |
| Merger agreements | Representations and warranties | Defines breach thresholds |
Contract language
Common contract wording
| Contract wording | Plain-English meaning | What to check |
|---|---|---|
| Any 'significant' change to the business operations requires written consent | Major changes affecting core business activities | Check if 'significant' is defined with percentage thresholds |
| Deviations deemed 'significant' may result in termination | Departures from agreed standards risking contract termination | Verify if objective criteria exist for determining significance |
| 'Significant' impact on financial performance requires notice | Material effect on revenue or profitability | Look for specific financial metrics mentioned |
Red flags
Red flags to watch for
Wording examples
Clearer wording examples
Vague wording
Vague: 'Any significant change'
Clearer wording
Clearer: 'Changes exceeding 10% of revenue or 5% of operations'
Vague wording
Vague: 'Materially significant impact'
Clearer wording
Clearer: 'Impact reducing net income by more than 15%'
Note: “clearer” means easier to read — not legally reviewed or guaranteed safe.
Pre-signature checklist
What to check before signing
1
Verify if 'significant' is defined with objective criteria
2
Determine which party has the authority to determine significance
3
Check if there are different thresholds for different types of changes
4
Look for time limits for responding to significant changes
5
Confirm what remedies are available if significance is disputed
6
Identify if industry standards are referenced and how they're defined
Party impact
How significant affects each party
| Party | What this party should check |
|---|---|
| Buyer | Verify if 'significant' includes price increases or only quantity changes |
| Service Provider | Check if 'significant' requires client approval for minor changes |
| Landlord | Determine if 'significant' repairs trigger tenant relocation requirements |
| Franchisee | Confirm what operational changes are deemed 'significant' by franchisor |
Comparison
significant vs similar terms
| Related term | Plain meaning | Main difference from significant |
|---|---|---|
| Material | Substantial enough to affect the outcome | More formal legal standard often used in securities law |
| Substantial | Important enough to matter | Similar to significant but may imply greater size |
| Immaterial | Not substantial enough to matter | Direct opposite of significant |
| De minimis | Trivial or insignificant | Related threshold concept with specific legal applications |
Missing or vague
If significant is missing or vague
Without clear definition of 'significant,' parties may disagree on whether a change triggers contractual obligations.
Disputes over what constitutes significant damage or change can lead to costly litigation.
The party claiming significance may fail to enforce their rights if they can't prove the threshold was met.
Business relationships may suffer when one party unilaterally determines significance without objective standards.
Courts may need to interpret the term based on industry standards or common usage, creating uncertainty.
Document map
Document section map
| Contract section | What to inspect |
|---|---|
| Definitions section | Check if 'significant' is explicitly defined with thresholds |
| Change order provisions | Look for criteria determining when changes are significant |
| Termination clause | Identify what constitutes significant breach allowing termination |
| Material adverse change section | Review thresholds for significant financial deterioration |
| Governing law | Understand how courts interpret undefined 'significant' terms |
Visual model
Understand significant fast
An explainer image has not been generated for this term yet.
01
A landlord claiming 'significant' property damage requiring immediate tenant eviction
02
A borrower declaring a 'significant' change in financial circumstances triggering default
03
A franchisor asserting a 'significant' deviation from operational standards justifying termination
Document context
How significant shows up in legal documents
Why does it matter?
Ignoring the 'significant' threshold can lead to unintended obligations or lost rights. The party relying on the term bears the risk if their interpretation differs from the other party's.
When does it matter?
When a party claims a change is 'significant,' the threshold matters within 30 days of the change occurring. Courts evaluate significance when determining if a breach has occurred or if a material change justifies termination.
Where is it usually seen?
Significant appears in standard contract change provisions, material adverse change clauses in loan agreements, and regulatory reporting requirements. It's common in M&A agreements and shareholder rights plans as a threshold for actions.
Who is affected?
Buyers should check if 'significant' is defined before agreeing to change provisions. Sellers risk triggering unwanted obligations if they unilaterally deem changes significant without clear criteria.
How does it work?
First, parties must identify the specific threshold for significance in the contract. Then, when a potential change occurs, they evaluate whether it meets that threshold. Finally, they follow the contract's procedures for addressing significant changes, which may include notice, approval, or termination rights.
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Wikipedia
External reference for significant
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Where significant connects to real contract work
This layer links the term to nearby glossary entries, document use cases, and contract-risk guides so readers can move from definition to context without dead ends.
Glossary
Use Cases
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Project Management: Vague scope = cost overruns. BrieflyGo finds the gaps before they find you.
Source & disclosure
This page is an AI-assisted plain-English explanation based on LexPredict Legal Dictionary context and contract-review patterns. It is not legal advice. Meaning may vary by jurisdiction, industry, and exact clause wording.
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