Legal Definitions - escape clause

An escape clause is a part of a contract that excuses one party from fulfilling their obligations under certain circumstances. This means that if certain conditions are met, one party can avoid liability for not fulfilling their part of the agreement.

For example, insurance policies often have escape clauses. One common type of escape clause in insurance policies is the "other insurance clause." This clause allows the insurance company to avoid liability if there is another insurance policy that covers the same claim. This means that if a person has two insurance policies that cover the same thing, the insurance company can use the other insurance clause to avoid paying out the claim.

Another example of an escape clause is a contingency clause in a real estate contract. This clause allows a buyer to back out of a contract if certain conditions are not met, such as the seller not being able to provide clear title to the property.

Overall, an escape clause is a way for one party to protect themselves from liability if certain conditions are not met. It is important to read and understand any escape clauses in a contract before signing it.