Budget clause: Copy, customize, and use instantly
Introduction
A budget clause outlines the financial parameters for a project or agreement, specifying the total allocated budget and how funds are to be used. This clause ensures that both parties are aligned on financial expectations and limits, and it often includes provisions for adjustments, approvals for overages, and the management of unforeseen costs. It provides transparency and control over financial resources.
Below are templates for budget clauses tailored to different scenarios. Copy, customize, and insert them into your agreement.
Fixed budget clause
This variation applies when the budget is fixed and non-negotiable.
The total budget allocated for this Agreement is [total amount], and the Parties agree that the total expenditure will not exceed this amount unless otherwise approved in writing by [appropriate party]. Any unforeseen costs or changes to the scope of work must be documented and agreed upon in writing before they are incurred.
Budget with contingency clause
This variation applies when a contingency is included in the budget for unforeseen costs.
The total budget for the project is [total amount], including a contingency amount of [contingency amount or percentage, e.g., 10%]. Any expenses beyond the contingency amount must be approved by [appropriate party] before being incurred. The contingency fund is intended to cover unexpected costs and may only be used with mutual consent.
Budget adjustment clause
This variation applies when the budget can be adjusted during the term of the Agreement.
The total budget for this Agreement is [total amount]. Either Party may request an adjustment to the budget if there are changes to the scope of work, unforeseen costs, or external factors that impact the project. Any changes to the budget must be agreed upon in writing and signed by both Parties before proceeding with additional expenditures.
Budget approval clause
This variation applies when the budget must be approved at different stages.
The total budget for this project is [total amount], and any expenditures in excess of [budget threshold, e.g., 5%] of the budget must receive prior written approval from [designated party, e.g., project manager, client]. All payments and budget increases must be submitted for approval and documented before being authorized.
Budget allocation for specific expenses clause
This variation applies when the budget is allocated for specific categories or expenses.
The total budget for this Agreement is [total amount], and the following amounts are allocated for specific expenses:
Any reallocation of funds between these categories must be approved by [appropriate party] in writing.
Budget reconciliation clause
This variation applies when there is a requirement for budget reconciliation after the project.
The total budget allocated for this Agreement is [total amount]. Upon completion of the project, the Parties agree to conduct a budget reconciliation to ensure that the actual costs align with the approved budget. Any discrepancies must be addressed and documented, and the final payment will be adjusted accordingly based on the reconciliation.
Budget tracking clause
This variation applies when tracking and reporting of budget expenses are required.
The total budget for this project is [total amount]. The [designated party, e.g., project manager] will track and report expenses monthly to ensure the project stays within budget. Any significant deviations from the budget must be reported immediately, and corrective action must be taken to avoid exceeding the total budget.
Budget surplus clause
This variation applies when there is a surplus in the budget.
If the total project expenses are less than the allocated budget of [total amount], the surplus shall remain with [party entitled to surplus, e.g., the Client, the Vendor], or it may be used with mutual agreement for other related expenses. Any surplus must be documented and agreed upon by both Parties.
Maximum budget clause
This variation applies when a maximum budget is set and must not be exceeded.
The total budget for the project is [total amount], and the Parties agree that no expenditure shall exceed this amount under any circumstances. If additional funds are required to complete the project, both Parties must agree to a budget increase in writing before any further costs are incurred.
Payment schedule tied to budget milestones clause
This variation applies when payments are tied to budget milestones.
The total budget for the project is [total amount], with payments tied to the completion of the following milestones:[Milestone 1]: [amount or percentage of total budget][Milestone 2]: [amount or percentage of total budget][Milestone 3]: [amount or percentage of total budget]
Payments will be made upon the completion of each milestone, and no payment will be made until the corresponding milestone is reached and approved by [designated party].
Budget clause with reimbursement for unforeseen costs
This variation applies when unforeseen costs are reimbursed.
The total budget for this Agreement is [total amount]. Any unforeseen costs or additional expenses incurred during the project, which were not anticipated at the start, will be reimbursed by [appropriate party], provided that the additional costs are justified and approved in writing. The reimbursement will not exceed the total approved budget.
Budget monitoring clause
This variation applies when budget monitoring is required.
The total budget allocated for this project is [total amount]. The Parties agree to monitor the budget regularly, with financial reports provided by [party responsible for monitoring, e.g., project manager] on a [monthly/quarterly] basis. The report will detail all expenditures, and any significant deviation from the budget must be addressed immediately.
Payment upon budget completion clause
This variation applies when payments are made upon completion of the budget scope.
The total budget for this Agreement is [total amount]. Payments will be made based on the completion of the agreed-upon budget scope. The final payment will only be made when the full budget amount has been expended, and all project deliverables have been met.
Budget limit clause
This variation applies when there is a strict limit on the budget.
The total budget for this project is strictly limited to [total amount]. No expenditures beyond this amount will be authorized under any circumstances unless both Parties agree to a written amendment of the Agreement. Any overages must be approved before being incurred.
Budget for specific phases clause
This variation applies when the budget is allocated for specific project phases.
The total budget for the project is [total amount], and the following amounts are allocated to specific project phases:Phase 1: [amount]Phase 2: [amount]Phase 3: [amount]
If any phase requires a reallocation of funds, it must be approved by [appropriate party] in writing before any adjustments are made.
Annual budget review clause
This variation applies when the budget is reviewed annually.
The total budget for this project is [total amount], and an annual review of the budget will be conducted by [party responsible for review] to ensure that the project is on track financially. Any adjustments needed to the budget will be agreed upon by both Parties and documented in writing.
Flexible budget clause
This variation applies when the budget can be adjusted as necessary.
The total budget for this Agreement is [total amount], with the understanding that it may be adjusted due to unforeseen circumstances or changes in scope. Any proposed changes to the budget must be discussed and agreed upon by both Parties in writing before proceeding with any additional expenditure.
Budget breakdown clause
This variation applies when a detailed breakdown of the budget is required.
The total budget for this Agreement is [total amount], and the following is a detailed breakdown of how funds will be allocated:
Any changes to this breakdown must be approved in writing by [appropriate party].
Budget review and approval clause
This variation applies when the budget must be reviewed and approved before spending.
The total budget for this Agreement is [total amount]. Any expenses that exceed [specific percentage, e.g., 10%] of the allocated budget must be reviewed and approved by [appropriate party] in writing before they are incurred. This ensures that the project remains within financial constraints.
Final budget reconciliation clause
This variation applies when a final reconciliation of the budget is required after project completion.
The total budget for this project is [total amount]. Upon completion of the project, a final budget reconciliation will be conducted to ensure that all funds have been properly allocated and spent. Any remaining funds will be returned to [appropriate party] or reallocated as agreed upon by both Parties.
Budget clause for time-sensitive projects
This variation applies to time-sensitive projects.
The total budget for this project is [total amount], and the Parties agree that the budget will be strictly adhered to in order to meet project deadlines. If unforeseen expenses arise that may affect the schedule, approval from [appropriate party] is required before additional funds are allocated.
Budget for unforeseen delays clause
This variation applies when budget adjustments are needed due to unforeseen delays.
The total budget for this Agreement is [total amount], and the Parties agree that any costs resulting from delays caused by unforeseen circumstances may increase the budget. Any increase in the budget due to delays must be approved in writing by [appropriate party] before additional expenses are incurred.
Budget for contingency fund clause
This variation applies when a contingency fund is included within the budget.
The total budget for this project is [total amount], and a contingency fund of [contingency amount, e.g., 10%] is included to cover unforeseen expenses. Any use of the contingency fund must be pre-approved in writing by [appropriate party] and documented for transparency.
Project-specific budget allocation clause
This variation applies when the budget is allocated to specific project components.
The total budget for this Agreement is [total amount], and the following amounts are allocated to specific components of the project:Component 1: [amount]Component 2: [amount]Component 3: [amount]
Any reallocation of funds between components must be approved by [appropriate party] in writing.
Budget for optional services clause
This variation applies when optional services are not included in the base budget.
The total budget for this Agreement is [total amount], which covers the base services as outlined in the Agreement. Any optional services requested by the Client that fall outside the original scope of work will incur additional costs, subject to prior approval by [appropriate party].
Budget for phased payment plan clause
This variation applies when payments are made in phases based on the budget.
The total budget for this Agreement is [total amount], and payments will be made in [number of phases, e.g., 3] equal installments. Payments will be tied to the completion of each project phase, with the first payment due upon commencement, the second upon [specific milestone], and the final payment upon completion.
Budget variance clause
This variation applies when the budget variance is allowed within a specific range.
The total budget for this Agreement is [total amount], with a variance of [percentage, e.g., 5%] allowed for minor adjustments in expenses. If the actual costs exceed this variance, written approval from [appropriate party] must be obtained before further expenditures are made.
Payment based on budget milestones clause
This variation applies when payments are linked to budget milestones.
The total budget for this project is [total amount], and payments will be made based on the completion of the following milestones:Milestone 1: [amount or percentage]Milestone 2: [amount or percentage]Milestone 3: [amount or percentage]
Payments will be due upon the completion and approval of each milestone by [appropriate party].
Budget for project scope changes clause
This variation applies when changes in project scope affect the budget.
The total budget for this Agreement is [total amount]. If any changes are made to the project scope, the budget will be adjusted accordingly. Any increases in the budget resulting from changes in scope must be approved by [appropriate party] before the changes are implemented.
Budget approval process clause
This variation applies to the approval process for budget modifications.
The total budget for this Agreement is [total amount]. Any modification to the budget, whether due to changes in scope, unforeseen costs, or other reasons, must be submitted for approval to [designated party, e.g., project manager] in writing. No additional funds will be spent until approval is received.
Budget clause with escalation provision
This variation applies when the budget is subject to escalation based on certain factors.
The total budget for this project is [total amount], and the Parties agree that the budget may be escalated by up to [percentage, e.g., 10%] in the event of [specified reasons, e.g., inflation, increase in material costs]. Any escalation must be agreed upon in writing by both Parties before the additional funds are spent.
Budget for external costs clause
This variation applies when external costs may affect the project budget.
The total budget for this Agreement is [total amount], and any external costs, including [external cost categories, e.g., taxes, regulatory fees, third-party services], that impact the budget must be approved by [appropriate party] before being incurred. These external costs will be added to the total project budget if necessary.
Budget for unapproved expenses clause
This variation applies when expenses not previously approved are not covered.
The total budget for this project is [total amount]. Any expense incurred outside of the pre-approved budget categories must receive written approval from [appropriate party] before being paid. Expenses without prior approval will not be reimbursed and will not be considered part of the project budget.
Budget revision clause for scope changes
This variation applies when scope changes affect the project budget.
The total budget for this Agreement is [total amount]. In the event of scope changes during the project, the budget will be reviewed and revised accordingly. Any revised budget must be approved by both Parties before any additional work is undertaken.
Budget for approval of major expenses clause
This variation applies when major expenses require specific approval.
The total budget for this project is [total amount], and any single expense exceeding [amount, e.g., $10,000] must receive prior written approval from [appropriate party] before being incurred. No payments will be made for expenses above this threshold without approval.
Budget allocation for multiple departments clause
This variation applies to a project with multiple departments or areas of responsibility.
The total budget for this Agreement is [total amount], and the following amounts have been allocated to different departments or components of the project:
Any funds reallocated between departments must be approved by [appropriate party] in writing.
Budget flexibility clause
This variation applies when flexibility is allowed for minor changes within the budget.
The total budget for this project is [total amount], and the Parties agree to allow minor budget fluctuations of up to [percentage, e.g., 5%] without requiring formal approval. Any expense outside this allowance must be reviewed and approved in writing by [appropriate party].
Budget for phase-based payments clause
This variation applies when payments are tied to different project phases.
The total budget for this Agreement is [total amount], and the Parties agree that payments will be made based on the completion of the following project phases:Phase 1: [amount or percentage]Phase 2: [amount or percentage]Phase 3: [amount or percentage]
Payments will be due upon the satisfactory completion of each phase, as approved by [appropriate party].
Budget reallocation clause
This variation applies when funds can be reallocated during the project.
The total budget for this project is [total amount], and the Parties agree that funds may be reallocated between budget categories as needed, provided the reallocation does not exceed [percentage, e.g., 10%] of the total budget. Any reallocations must be approved in writing by [appropriate party].
Budget for final review and adjustment clause
This variation applies when the budget will be reviewed at the end of the project.
The total budget for this Agreement is [total amount], and a final budget review will be conducted upon completion of the project. Any unspent funds will be returned to [appropriate party] or reallocated as agreed upon. If the final costs exceed the budget, the additional amount must be approved by [appropriate party] in writing.
Budget for contingency adjustments clause
This variation applies when adjustments can be made due to unforeseen issues.
The total budget for this project is [total amount], and the Parties agree to allocate a contingency fund of [contingency amount or percentage, e.g., 10%] to cover unforeseen costs. Any use of the contingency fund must be approved by [appropriate party] before additional funds are allocated. If unused, the contingency fund will revert to [party].
Budget for project scope modifications clause
This variation applies when project scope modifications may affect the budget.
The total budget for this Agreement is [total amount]. If the scope of the project changes, the budget will be reviewed and adjusted accordingly. Both Parties must agree in writing to any adjustments to the budget resulting from scope changes before any additional costs are incurred.
Budget payment schedule clause
This variation applies to a specific payment schedule tied to the budget.
The total budget for this project is [total amount]. Payments will be made in [number of installments, e.g., 3] installments as follows:First payment: [amount] upon the start of the project.Second payment: [amount] upon completion of [specific milestone].Final payment: [amount] upon completion of the project and approval by [appropriate party].
Budget for exceptional costs clause
This variation applies when there are provisions for exceptional costs.
The total budget for this Agreement is [total amount], and exceptional costs, such as [examples of exceptional costs], will be assessed and agreed upon by both Parties. If any such costs arise, they must be approved in writing by [appropriate party] before being incurred.
Budget for approval of unforeseen project expenses clause
This variation applies when any unforeseen expenses must be approved before they are incurred.
The total budget for this project is [total amount]. If any unforeseen expenses arise that could affect the project budget, they must be approved in writing by [appropriate party] before being incurred. The approval will be based on a detailed explanation of the additional costs and their necessity.
Budget clause with threshold for overages
This variation applies when the budget includes a threshold for overages.
The total budget for this Agreement is [total amount], and the Parties agree that any overages exceeding [threshold amount or percentage, e.g., 5%] of the total budget must be approved in writing by [appropriate party] before being spent. Any costs within the threshold may be covered without additional approval.
Budget for labor costs clause
This variation applies when labor costs are a significant part of the budget.
The total budget for this project is [total amount], and labor costs are allocated as follows:Labor costs for [specific task or department]: [amount]
Any increase in labor costs due to overtime, additional personnel, or other factors must be approved by [appropriate party] in writing before they are incurred.
Budget for specific resource allocation clause
This variation applies when specific resources are allocated within the budget.
The total budget for this project is [total amount], with the following resources allocated:
Any reallocation of resources between these categories must be approved by [appropriate party] in writing.
Budget for tax or regulatory fee adjustments clause
This variation applies to tax or regulatory fee adjustments.
The total budget for this Agreement is [total amount]. In the event of changes in applicable taxes, fees, or regulations that result in increased costs, the budget will be adjusted accordingly. Any adjustment must be approved by both Parties in writing before additional payments are made.
Budget for reporting clause
This variation applies when regular budget reports are required.
The total budget for this project is [total amount]. [Party responsible for reporting, e.g., project manager] will provide regular budget reports every [time frame, e.g., month], outlining all expenditures and any budget deviations. The Parties will review these reports, and any significant discrepancies must be addressed in writing.
Budget for project-specific expenses clause
This variation applies when specific project-related expenses are included in the budget.
The total budget for this project is [total amount], with the following project-specific expenses:
Any reallocation of funds between these categories must be approved in writing by [appropriate party] before they are incurred.
Budget for approval of cost overruns clause
This variation applies when cost overruns must be approved.
The total budget for this project is [total amount], and any cost overruns that exceed [percentage, e.g., 10%] of the original budget must be approved by [appropriate party] before proceeding. Any unapproved costs will not be reimbursed.
Budget for change order impacts clause
This variation applies when change orders may affect the budget.
The total budget for this Agreement is [total amount]. Any change orders or modifications to the scope of work that may impact the budget must be submitted for approval. The budget will be adjusted accordingly, and both Parties must agree in writing to the revised amounts.
Budget for contingency fee clause
This variation applies when a contingency fee is included in the budget for unforeseen changes.
The total budget for this project is [total amount], and a contingency fee of [contingency fee amount, e.g., 5%] is allocated for unforeseen changes. Any use of the contingency fund must be approved by [appropriate party] before expenditure.
Budget for approval of significant budget changes clause
This variation applies to when significant changes to the budget must be approved.
The total budget for this Agreement is [total amount]. Any significant changes to the budget, defined as changes greater than [percentage, e.g., 15%] of the original budget, must be approved in writing by [appropriate party] before any additional expenses are incurred.
Budget allocation for project phases clause
This variation applies to when the budget is allocated across project phases.
The total budget for this project is [total amount], with the following budget allocations for each project phase:Phase 1: [amount]Phase 2: [amount]Phase 3: [amount]
If additional funding is required for any phase, written approval from [appropriate party] will be required before proceeding with the additional expenses.
Budget for overhead costs clause
This variation applies when overhead costs are included in the budget.
The total budget for this Agreement is [total amount], and overhead costs are allocated at [percentage, e.g., 10%] of the total budget. These costs include [list of overhead costs, e.g., administrative expenses, office utilities]. Any changes to these overhead costs must be approved by [appropriate party] in writing.
Budget for performance-based adjustments clause
This variation applies when the budget is adjusted based on performance.
The total budget for this project is [total amount], and the final payment will be adjusted based on the performance and quality of the deliverables. If the deliverables meet the agreed-upon standards, the full budget will be paid; however, if performance is below expectations, the budget may be reduced by [percentage or amount].
Budget for allocation of unspent funds clause
This variation applies when unspent funds may be allocated elsewhere.
The total budget for this Agreement is [total amount]. Any unspent funds at the completion of the project will be returned to [appropriate party] unless both Parties agree in writing to reallocate the funds to another project or purpose.
Budget for project cost tracking clause
This variation applies when project costs must be tracked throughout the project.
The total budget for this Agreement is [total amount], and [appropriate party] will track and document all project costs. Any significant variance from the approved budget must be reported immediately, and corrective action will be taken to ensure the project remains within budget.
Budget for vendor costs clause
This variation applies when vendor costs are part of the budget.
The total budget for this project is [total amount], and vendor costs for [specific services or products] will be allocated as follows:Vendor 1: [amount]Vendor 2: [amount]
Any changes to these costs must be approved by [appropriate party] before proceeding with the payments.
Budget for client-approved expenses clause
This variation applies when client-approved expenses are included in the budget.
The total budget for this project is [total amount], and any expenses outside the initial agreement, including but not limited to [expense categories, e.g., travel, software purchases], must be approved by the Client before being incurred. These expenses will be added to the final project budget.
Budget for material costs clause
This variation applies when material costs are part of the budget.
The total budget for this project is [total amount], and materials required for the completion of the project are allocated as follows:Material 1: [amount]Material 2: [amount]
If additional materials are required, prior written approval from [appropriate party] must be obtained before purchasing.
Budget for project milestone changes clause
This variation applies when project milestones impact the budget.
The total budget for this project is [total amount], and any changes to the project milestones, including adjustments in scope or additional tasks, will require an updated budget. Both Parties must agree in writing to any budget adjustments before proceeding with the changes.
Budget for labor hours clause
This variation applies when labor hours are part of the budget.
The total budget for this Agreement is [total amount], with [number of labor hours, e.g., 100 hours] allocated for [specific tasks]. If additional labor hours are required, they must be approved by [appropriate party] before being allocated to the project.
Budget for additional services clause
This variation applies when additional services are not included in the initial budget.
The total budget for this project is [total amount], covering the core services outlined in the Agreement. Any additional services requested by the Client, such as [list of additional services], will be charged separately and must be agreed upon in writing before work commences.
Budget for project wrap-up clause
This variation applies to budgeting for project completion and wrap-up.
The total budget for this project is [total amount], with the final payment being due upon completion of the project and approval of all deliverables. Any remaining budget funds after completion will be returned to [appropriate party] unless otherwise agreed upon.
Budget for financial reporting clause
This variation applies when financial reports are part of the budget process.
The total budget for this project is [total amount], and [party responsible for reporting] will provide monthly financial reports detailing the project expenditures. Any significant deviations from the budget must be reported immediately, and corrective actions will be taken as necessary.
Budget for late fees clause
This variation applies when the budget includes provisions for late fees.
The total budget for this project is [total amount], and any late payments beyond [number of days, e.g., 15 days] will incur a late fee of [percentage, e.g., 5%] per month on the outstanding balance. The late fee will be added to the final payment amount.
Budget for resource utilization clause
This variation applies when resource utilization is part of the budget.
The total budget for this project is [total amount], and the following resources are allocated to specific tasks:Resource 1: [number of units or amount]Resource 2: [number of units or amount]
Any adjustments to resource utilization must be approved in writing by [appropriate party] before being implemented.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.