Sum Certain Definition and Legal Meaning

On this page, you'll find the legal definition and meaning of Sum Certain, written in plain English, along with examples of how it is used.

What is Sum Certain?

(n) A ‘sum certain’ is used to represent that the amount involved in the agreement is stated specifically and absolutely, which will in no circumstances change due to an event taken place after the documentation of the contract or agreement. For an example a fixed rent allowance is sum certain where as re-imbursement of rental expenses is not a sum certain

History and Meaning of Sum Certain

The term "sum certain" has its roots in contract law and is used to describe a specific and unchanging dollar amount that is included in a legal agreement. This term is especially important for situations where the amount of money involved in the contract cannot be changed due to unforeseen circumstances. By establishing a sum certain, both parties to the agreement can be confident that the value of the contract will not fluctuate.

Examples of Sum Certain

  1. A rental lease that specifies a fixed monthly rent amount is an example of a sum certain. The rent amount will not change, no matter what happens during the term of the lease.

  2. A construction contract that includes a set price for the project is another common example of a sum certain. The parties agree to a specific amount for the work, and that amount remains fixed throughout the project.

  3. A loan agreement that sets a fixed amount to be paid back over a specific period of time is also an example of a sum certain. The borrower agrees to pay back the exact amount borrowed, plus any interest or fees, and that total amount is established at the time the loan agreement is signed.

Legal Terms Similar to Sum Certain

  1. "Liquidated damages" refer to a specific amount of money that is agreed to be paid by one party to the other in the event of a breach of contract. This amount is established in the contract itself and is usually a sum certain.

  2. "Specific performance" is a legal remedy that requires a party to fulfill their obligations under a contract. Like sum certain, this term emphasizes the importance of fulfilling the terms of a contract as initially agreed upon.

  3. "Unliquidated damages" refer to damages that are not specifically outlined in a contract but are instead awarded by a court. This term is important to understand in contrast to sum certain, as it emphasizes the uncertainty and potential variability of damages awarded in legal disputes.