Recitals in agreements: Why they are important

When it comes to legal agreements, such as contracts, recitals play a crucial role. Recitals are introductory statements that set the context and provide background information about the agreement. They are typically located at the beginning of the agreement, right before the actual terms and conditions.

In this article, we’ll discuss the importance of recitals in agreements and why they should not be overlooked.

What are recitals?

Recitals are the opening statements in a legal agreement, which provide context, background and set out the intentions and purposes behind the agreement. They are usually written in a separate paragraph with a bold heading, and are often prefaced with the word “whereas”.

Recitals can include information about the parties involved, the motivation for entering into the agreement, the current situation that the agreement is addressing, any previous agreements or understandings, and any relevant legal or factual considerations.

Why are recitals important?

There are a number of reasons why recitals are important in legal agreements:

1. Clarity: Recitals provide clarity and context to the agreement. By setting out the purpose and background of the agreement, they ensure that all parties understand the agreement in the same way.

2. Interpretation: Recitals can be used in the interpretation of the agreement. Courts and arbitrators will often look at the recitals to help determine the intention of the parties when the agreement was made.

3. Evidence: Recitals can be used as evidence in disputes or litigation. They can help to demonstrate what the parties intended when they entered into the agreement.

4. Due diligence: Recitals can help with due diligence. When reviewing an agreement, potential parties or investors will often look at the recitals to understand the motivation behind the agreement.

5. SEO: Recitals can also be useful for search engine optimization (SEO). By including key terms and phrases in the recitals, search engines can easily identify the subject matter of the agreement.

Conclusion:

Recitals in agreements play an important role in setting out the context and background of the agreement. They ensure that all parties understand the agreement in the same way and can be used in the interpretation of the agreement. Additionally, they can be used as evidence in disputes or litigation, and can help with due diligence. Finally, by including key terms and phrases in the recitals, they can help with SEO. As such, it is important to ensure that recitals are carefully drafted and not overlooked in any legal agreement.