The present invention provides a system and a method for mining a new kind of association rules called disjunctive association rules, where the antecedent or the consequent of a rule may contain disjuncts of terms (XY or X⊕Y). Such rules are a natural generalisation to the kind of rules that have been mined hitherto. Furthermore, disjunctive association rules are generalised in the sense that the algorithm also mines rules which have disjunctions of conjuncts (C(AB)(DE)). Since the number of combinations of disjuncts is explosive, we use clustering to find a generalized subset. The said clustering is preferably performed using agglomerative clustering methods for finding the greedy subset.