Given how dense they tend to be, contracts can sometimes seem to be filled with extraneous language. However, language is – or, at least it should be – there for a reason. Without it, a contract could have a lot of holes in it — or even be rendered invalid.
That’s why it’s crucial, whether you’re initiating a contract or have been presented with one, to read the “fine print” – or at least be sure that you understand it. This is just one reason why you should always have experienced legal guidance when dealing with any kind of contract. That’s true whether it involves employees, vendors, clients or others with whom you’re doing business.
What’s the purpose of them?
Among the contract terms that too many people skip over are the “contract recitals.” These are more commonly known as the preamble or maybe introductory clauses. They generally aren’t legally binding. However, they typically address the intent of the agreement.
If you’re signing a contract drafted by another party, it’s wise to read these introductory sections to make sure they align with your understanding of the scope of the agreement and the reason for it. You also need to know if there’s anything in there that is legally binding.
Types of recitals
The primary types of contract recitals are:
- Contextual and purpose recitals: These provide background information on the reason for a project. They often begin with “whereas.”
- Definition recitals: These define key terms used in the contract. It’s crucial to make sure everyone is using the same definitions.
- Reference and integrating recitals: These are used when a project or activity has multiple contracts (like an acquisition or merger). They often mention other contracts.
As noted, whether you’re creating, negotiating or signing a contract, you should never undertake that job without experienced legal guidance to protect your rights and those of your business.