The preamble of an agreement, or its preamble, delineate the background facts or the reasons that led the parties involved to conclude the agreement. Preambles are useful to lend context to the agreement and can be used to assist in interpretations of some of its terms.
Checklist for Clear Recitals
Recitals typically do not have binding power but play a clarifying role in agreements. Preambles or recitals are drafted prior to the body of the agreement. The preamble explains the reason that prompted the parties to enter into the obligations contained in the contract. A well-crafted preamble reflects key agreement facts and provisions that the parties deem significant. While drafting the preamble or the recital, it is vital to ensure that clarity has been prioritized. Typically, the preamble states the purpose of the agreement, the reason why it was carried out, and the matter that led to the parties executing the contract. Parties may use the preamble to expound their intentions and also to establish the subject-matter of the agreement. While the contract stipulates the exact obligations owed by the parties, the preamble or the recital adds context and directs the reader to the core purpose of the agreement.
While drafting a recital, it is worthwhile to ask these questions: Recitals and συμφωνία or συμφωνία The great philosopher Aristotle expounded the importance of συμφωνία (symphony) in a community. While Aristotle used the word to signify “agreement”, “concord” or “agreement of minds”, today this word aptly describes the result that a well-crafted recital can achieve. In circumstances where the recitals of an agreement are vague and ambiguous, outside evidence may be sought to construe the meaning of the words or terms within the agreement. The goal of the agreement may be lost in such cases. In the case of Union Bank of Switzerland v Wendy M, the Fourth Circuit of the Court of Appeal in Pretoria dealt with a situation where the parties disagreed as to whether an agreement had been concluded. The lessee argued that a warranty agreement had not been finalized while the lessor asserted that an agreement had indeed been completed. The court found that the parties had not reached a meeting of the minds, or συμφωνία, and thus no agreement had been concluded. Clearly, a properly worded preamble or recital can help avoid lengthy legal wrangling and a certain outcome. The judicious use of preambles and recitals can save significant time and resources for the parties before a court of law.
Through its loan financing facility, GoKapital Loans enables entrepreneurs to not only access the funds they require but also provide better clarity around their loan contracts. With its flexible and transparent loan product, GoKapital Loans is able to assist businesses in securing the needed funds. The loan provider offers its clients favorable terms without confusion throughout the lending process. The company leverages a fully online platform to facilitate the application and approval of loans. Through its quick but robust process, GoKapital Loans has been able to streamline the lending experience for its clients. Like the preamble of an agreement, the GoKapital process is simple and easy to grasp. For the client, they only need to fill in an application form and submit the requisite documents. The application is manually reviewed by the team at GoKapital. After verification, which takes only minutes, the loan amount is transferred electronically to the borrower’s account. In one sense, the loan product offered by GoKapital affords the borrower the much-needed clarity and speed that should be a part of every business or legal dealings. For now, GoKapital Loans helps businesses that have their preambles and recitals in order and enjoy a quick process. If for some reason, the preamble is vague or problematic, the savvy legal or business professional may tweak. The process at GoKapital Loans is such that the loan provider can also go back and ask the client detailed questions to get to the core of the problem. In GoKapital’s case, the staff is always ready to assist and ensure that any problems that may arise regarding funding is rectified quickly to prevent unnecessary delays that may upend business agreements.