Headings for reference only: Overview, definition, and example
What does "headings for reference only" mean?
"Headings for reference only" is a common clause in contracts stating that section headings are included solely for convenience and do not affect the interpretation of the agreement. This means that while headings help organize a contract, they do not alter or limit the meaning of the contract terms.
For example, if a contract contains a section titled "Payment Terms" but includes clauses about refunds, the heading does not restrict the section to only payments—it applies to all terms within that section.
Why is "headings for reference only" important?
This clause helps prevent legal disputes by ensuring that contract interpretation is based on the actual wording of the terms, not just the headings. Without this clarification, a party could argue that a section’s content should be limited to what the heading suggests, potentially leading to misinterpretation.
For SMBs, including this clause ensures that contracts remain legally sound and reduces the risk of disagreements over contract wording. It provides clarity that all provisions must be read in full, not just based on section titles.
Understanding "headings for reference only" through an example
Imagine a small business signs a vendor agreement where one section is labeled "Delivery Schedule." However, within that section, there is also a clause about packaging requirements. Without a "headings for reference only" clause, the vendor could argue that packaging terms should not be included in that section. The clause prevents this argument and ensures all terms apply as written.
In another case, an investor agreement contains a section titled "Profit Sharing," but it also includes details about expenses. The "headings for reference only" clause clarifies that the entire section, including expenses, is enforceable—not just the profit-sharing aspect.
An example of a "headings for reference only" clause
Here’s how a "headings for reference only" clause might appear in a contract:
“The headings used in this Agreement are for reference and convenience only and shall not affect the interpretation or construction of any provision of this Agreement.”
Conclusion
A "headings for reference only" clause ensures that contract terms are interpreted based on their full content rather than section titles. For SMBs, this helps prevent disputes and maintains clarity in agreements. Including this clause in contracts protects businesses from misinterpretation and ensures all provisions are applied as intended.
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.