Preliminary statement: Overview, definition, and example
What is a preliminary statement?
A preliminary statement is an introductory section of a contract, agreement, or legal document that provides an overview or background information, setting the stage for the terms that follow. It typically outlines the context, purpose, and intentions of the parties involved in the agreement. A preliminary statement does not contain binding provisions but serves to inform the reader of the scope, objectives, and general terms of the agreement.
For example, in a business contract, the preliminary statement might explain the nature of the relationship between the parties or describe the project for which the contract is being established.
Why is a preliminary statement important?
The preliminary statement is important because it provides essential context and helps all parties understand the background, goals, and intentions behind the agreement. It sets a clear tone for the document, ensuring that both parties are aligned on the purpose of the agreement and the expectations going forward. While not legally binding, it can clarify ambiguities and provide useful reference points for interpreting the rest of the document.
For businesses, including a well-drafted preliminary statement helps reduce misunderstandings and establishes a clear framework for the detailed terms that follow in the contract or agreement.
Understanding preliminary statement through an example
Imagine a company and a supplier entering into a contract for the provision of materials. The preliminary statement in the contract might include a brief description of the supplier’s role and the general purpose of the agreement, such as the parties’ intent to ensure a reliable supply of goods for the company’s operations. This statement sets the context for the specific terms, such as delivery schedules, pricing, and payment terms, that follow in the body of the contract.
In another example, a partnership agreement might include a preliminary statement explaining the goals of the partnership, such as the joint development of a new product or the expansion of business operations. This provides a framework for the detailed clauses that govern the partnership’s operations and responsibilities.
An example of a preliminary statement clause
Here’s how a preliminary statement clause might look in a contract:
“This Agreement is made and entered into by and between [Insert Company Name] and [Insert Supplier Name] with the purpose of establishing the terms and conditions under which [Insert Company Name] will purchase [Insert Goods/Services]. The Parties intend to foster a collaborative relationship aimed at ensuring the timely and reliable delivery of quality materials for [Insert Project Name].”
Conclusion
A preliminary statement is a crucial element of contracts and legal documents that provides background information, context, and an overview of the parties' intentions. While not enforceable on its own, it serves to align the parties on the purpose of the agreement, reducing the risk of confusion or misinterpretation.
By including a well-crafted preliminary statement, businesses can clarify the broader goals and framework for the agreement, setting a positive foundation for the more specific terms that follow.
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.