A bonus clause rewards one party to a contract with additional payment, discount, or benefit when a defined performance threshold - typically volume, quality, timeliness, or growth - is met or exceeded.
How bonus clauses shape behavior
By making the reward proportional to defined performance, bonus clauses align the counterparty's actions with the paying party's objective. Common in construction (early delivery bonuses), sales (over-achievement bonuses), and supplier contracts (growth bonuses).
Why tracking is essential
Bonus clauses only deliver value if the triggering conditions are measured accurately. Structured contract data with performance measurement is what converts bonus clauses from a paper commitment into a captured entitlement or liability.
