Sum Certain (Contracts) – Definition

Cite this article as:"Sum Certain (Contracts) – Definition," in The Business Professor, updated September 20, 2019, last accessed October 25, 2020,


Sum Certain Definition

In a contract, a sum certain is settlement price or amount that has been fixed for the contract. A predetermined price on a negotiable instrument that is clearly stated is legally described as a sum certain. A sum certain is otherwise called sum payable. It is a fixed amount that is ascertained negotiable instruments in any financial contract.

Sum certain is commonly used by  lenders in a loan or mortgage contract. It is the predetermined amount stipulated in the contract void of any vagueness or ambiguity. Actors in a financial contract know the sum certain or sum payable before entering the agreement.

A Little More on What is a Sum Certain

Legally, a sum certain describes the specific amount clearly stated in a financial contract or negotiable instrument such as a mortgage note or promissory note. Usually, sum certain is included when the note is being written and disclosed to all players in a contract. A sum certain is void of ambiguity, hence, there can be no miscontrution or misinterpretation.

Aside from financial contacts or negotiable instruments, sum certain can also be used in purchase contracts, employment contracts and contracts for lease. One important advantage of sum certain is that it eliminates argument by actors of a contract as touching the fixed amount for the contract. Misunderstandings or the need for future calculations of a fixed amount are eliminated through sum certain.

References for “Sum Certain › Investing › Financial Analysis

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