Effect of headings: Overview, definition and example
What are the effect of headings?
The effect of headings refers to the role that headings or titles play in a contract or legal document. Headings are typically used to organize the content into sections, making it easier for the reader to navigate the document. While headings provide a helpful reference for understanding the content that follows, they generally have no substantive legal effect on the interpretation of the contract’s provisions. In other words, headings serve as organizational tools but do not influence or alter the terms and conditions outlined in the body of the agreement.
For example, a contract might include a heading for the "Payment Terms" section, but the actual legal obligations regarding payment are defined by the provisions under that heading, not the heading itself.
Why is the effect of headings important?
The effect of headings is important because it ensures that headings are used for convenience and organizational purposes, rather than for defining or limiting the content that follows. A clause about the effect of headings in a contract helps prevent any confusion about whether the heading itself has legal significance or if it merely serves as a reference. Including a provision about headings ensures that they are not misinterpreted as altering the terms of the contract.
In legal drafting, it’s essential to make clear that while headings aid in understanding, they do not override or affect the meaning of the substantive provisions.
Understanding the effect of headings through an example
A contract contains the heading "Limitation of Liability," followed by a provision that defines the scope of liability. The heading simply organizes the content, but it is the actual text of the provision under that heading that determines the rights and obligations of the parties, not the heading itself.
An example of an effect of headings clause
Here’s how an effect of headings clause might appear in a contract:
“The headings used in this Agreement are for convenience and reference only. They shall not be deemed to affect the meaning or interpretation of the provisions contained herein, and the substance of each section shall be governed by its content and not by the headings.”
Conclusion
The effect of headings clause ensures that headings in contracts are used solely as organizational tools, making it clear that they do not alter, limit, or define the rights and obligations of the parties. By clarifying this point, the clause prevents potential misunderstandings and ensures that the substance of the agreement is what governs the contractual relationship, not the titles or labels given to sections.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.