DEFINITION of 'Sum Certain'

A legal description of the predetermined settlement price for a contract or negotiable instrument. A sum certain refers to a fixed or specific amount of money, without any room for ambiguity. A negotiable instrument cannot be negotiated unless it stipulates a sum certain.

BREAKING DOWN 'Sum Certain'

A contract that spells out a sum certain eliminates any room for misunderstanding or misinterpretation. For example, a contract that specifies a sum certain of $10,000 for work carried out, is clearer than an open-ended contract that specifies payment at a rate of $50 per hour, subject to a maximum of 200 hours.

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