A clause is a functional word group that does contain a subject and a finite verb. There are two basic clauses—independent and dependent. An independent clause can stand alone as a sentence. In fact a simple sentence like We saw you coming is an independent clause. But usually the term is reserved for such a construction when it occurs as part of a larger sentence. The sentence below, for instance, consists of two independent clauses:
We saw you coming, and we were glad.
A dependent clause cannot stand alone as a grammatically complete sentence. It serves as part of a subject, object, adjective, or adverb. If we were to place when before the opening clause in the example above, we would turn it into a dependent (adverbial) clause modifying the second clause (which remains independent):
When we saw you coming we were glad.
Dependent clauses may also act as nouns, either as subjects (as in the first of the following sentences) or as objects (as in the second):
Why he went at all is a mystery to me. We knew that she would be pleased.
And as adjectives:
The point that you're trying to make just isn't very clear.
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