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English definition of “naked contract”

naked contract

noun [C]    
(also nude contract, or formal nudum pactum) LAW an informal agreement that is not considered legal in a court of law: A naked contract is not enforceable.
STOCK MARKET an agreement for options (= the right to buy shares, etc. in the future at a fixed price) for which the seller does not have the related shares: There are risks associated with writing naked contracts that one is unable to deliver.
(Definition of naked contract noun from the Cambridge Business English Dictionary © Cambridge University Press)
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