Reference to agreement: Overview, definition, and example
What is a reference to agreement?
A reference to agreement is a clause or statement in a contract or legal document that refers to or incorporates another document, agreement, or set of terms within the current agreement. This reference can be used to include the terms of a previous agreement or to point to specific documents, annexes, exhibits, or schedules that provide additional detail or context to the agreement being made. By making a reference to an agreement, the parties acknowledge and incorporate the referenced document's contents as part of their current contractual obligations.
Why is a reference to agreement important?
A reference to agreement is important because it provides clarity and efficiency in legal contracts by eliminating the need to repeat or rewrite extensive terms that may already be outlined in a separate document. It allows for the easy inclusion of previously agreed-upon terms, provisions, or specific documents without redundancy. This ensures that all relevant information is included and accessible without over-complicating the current agreement. References can also help streamline agreements when multiple contracts or documents need to be linked together, making it easier for all parties to understand and follow the terms.
Understanding reference to agreement through an example
For example, a company might enter into a service contract with a vendor and include a reference to an earlier non-disclosure agreement (NDA) signed by both parties. Instead of restating the confidentiality obligations in the service contract, the agreement might simply state: "The parties agree to the confidentiality provisions set forth in the Non-Disclosure Agreement dated [insert date]." This reference incorporates the NDA's terms into the new agreement, saving time and ensuring consistency.
In another example, a loan agreement between a bank and a borrower might refer to the terms outlined in a promissory note. The loan agreement might state: "The loan is subject to the terms and conditions set forth in the Promissory Note, dated [insert date], between the Borrower and the Lender." By referencing the promissory note, the loan agreement incorporates all of the detailed payment terms, interest rates, and repayment schedules contained within the separate note.
An example of a reference to agreement clause
Here’s how a reference to agreement clause might appear in a contract:
“This Agreement incorporates by reference the terms and conditions outlined in the Confidentiality Agreement, dated [insert date], between the Parties. Any breach of the Confidentiality Agreement shall be deemed a breach of this Agreement.”
Conclusion
A reference to agreement is a useful tool in legal and business contracts, helping to incorporate relevant terms from other documents without the need to repeat them. It ensures that all important terms are connected and that multiple documents are aligned in their content. By making efficient references, contracts remain clear, concise, and manageable, while ensuring that the necessary legal obligations are properly included and enforceable.
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.