That is why the importance of careful wording of recitals should not be removed. A well-developed recital could influence a court or arbitrator to favour one party`s argument vis-à-vis the other party. For example, the consideration of whether or not a clause is included in a contract may be influenced by evidence in the recitals on the intentions of the parties. Moreover, when a court considers a recital to be an expression of a clear intention to act in a prescribed manner, it may conclude from a federal state for an act 6. The recitals should accurately reflect the matrix of facts, as they are known to be “agreed statements.” Therefore, even if a statement in the recitals contains the recognition of a found circumstance which both parties know at this stage is not true7, such a statement could nevertheless be binding on the parties if the recitals are invoked. Context or substantive considerations – this type of clause describes the fact or event that led to the transaction. This may include items such as sales, trademark or patent licenses. An example of the traditional format was used in recitals in an agreement between Microsoft Corporation and Expedia, Inc. Here`s what the format looked like: the contracting parties entered into an agreement (type of agreement and date); In order to ensure the inclusion of key definitions in the legally binding contract, a better approach might be to include the text “as defined below” just before the term defined in the recitals and, therefore, to implicitly draw the reader`s attention to the section of the definition contained in the treaty arrangement. However, in practice, it is unlikely that a court will not take into account all references to terms defined in the recitals when interpreting the agreement.
It should also be noted that the intentions of the parties, as expressed in the recitals, may be important for the Tribunal`s consideration of whether or not a clause in the agreement should be considered. The considerations are formulated as traditional paragraphs with complete grammatical sentences and not as several clauses that emerge from the original preamble. It is therefore not necessary to limit the recitals to a single sentence. It is a good practice to end each recital by a complete stop and not by a semicolon. This is also preferable with respect to contract editing software, in which paragraphs are automatically inserted or omitted. For example, do not write: The case Blackpool Football Club (Properties) Limited against JSC Baltic International Bank is a good example of a recital that shows the commercial context of an agreement. It also shows how an unexpected event can have consequences outside of the terms agreed in a contract. This article seeks to reaffirm the importance of the modest recital and to recall that, in certain circumstances, the recitals could be legally binding on the parties and that they could also play an important role in the ability of a third party (including a court or arbitrator) to review relevant background information in order to determine the true intent of the parties. Conventionally, most considerations begin with the word Whereas. Considerations are not mandatory, but are often used in trade agreements to define the context of the treaty. There is no mandatory format for the drafting of recitals, but these generally contain concise factual assertions that describe the main circumstances and details relevant to the termination of the contract.
Statements of intent and references to related contracts may also be included. In some contracts, the publication of the recitals is usefully referred to by an introductory text marked “RECITALS”. Contractual obligations should not be included in the recitals, but should be more appropriately incorporated into the legally binding operational provisions. The same principle applies to key definitions. So where do the considerations stop and the operational arrangements begin? An agreement between the owner of the Blackpo