Incorporation of recitals: Overview, definition, and example
What is the incorporation of recitals?
The incorporation of recitals refers to the practice of including introductory statements or background information at the beginning of a contract or legal document, and ensuring that these recitals are legally considered part of the agreement. Recitals are typically found in the preamble or introductory section of a contract and set out the context, purpose, and intent behind the agreement.
When recitals are incorporated into the agreement, they are formally acknowledged as part of the contract’s terms and are given weight in interpreting the agreement. The incorporation of recitals helps clarify the underlying motivations, background, or conditions that led to the formation of the contract.
Why is the incorporation of recitals important?
The incorporation of recitals is important because it ensures that the context of the agreement is clearly documented and that the recitals are treated as part of the legally binding contract. This can be critical when interpreting the terms of the agreement, as recitals can offer insight into the intentions of the parties and provide clarity in case of disputes over ambiguous terms or conditions.
Including recitals in an agreement also helps in clarifying the reasons for entering into the contract, the background events leading to the agreement, and any relevant facts or assumptions that form the basis of the deal. This helps protect all parties involved by ensuring that everyone understands the context of the agreement and can refer back to it in the event of any issues or ambiguities.
Understanding the incorporation of recitals through an example
Imagine two companies, Company A and Company B, entering into a licensing agreement. The contract includes several recitals, such as:
"WHEREAS, Company A has developed proprietary software; and WHEREAS, Company B seeks to obtain a license to use the software for its business purposes."
These recitals set the stage for the agreement but are typically not the binding terms themselves. However, if the contract explicitly states that the recitals are incorporated into the agreement, they will be considered part of the legal document. For example:
"The recitals above are incorporated into this Agreement and shall be considered binding terms of the Agreement."
This incorporation of recitals ensures that the context and intent outlined in the recitals are treated as legally significant and part of the enforceable terms of the contract.
An example of incorporation of recitals clause
Here’s how an incorporation of recitals clause might appear in a contract:
“The Parties acknowledge and agree that the recitals set forth above are incorporated into this Agreement and shall form an integral part of the understanding and intent of this Agreement.”
Conclusion
The incorporation of recitals is an important practice in contract law that ensures the context, purpose, and background of an agreement are formally recognized as part of the binding contract. By incorporating recitals into the agreement, the parties clarify their intentions and provide a clearer understanding of the agreement’s foundation. This helps in the interpretation of the contract and offers protection in case of disputes.
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.