Recital: Definition, Example and Related Terms
What is a Recital ?
A recital in a contract is a statement or introduction that explains the reasons and objectives of the contract. Think of it as the 'why' part of the contract. It provides context to the agreement, explaining the background and the events that led to the decision to enter into the contract. Recitals can sometimes be referred to as 'whereas clauses' or 'background clauses' as they set the stage for the rest of the contract.
Example(s)
Scenario Description Company A and Company B decide to form a partnership to create a new product. In their contract, the recital might state: 'Whereas, Company A has expertise in X and Company B has resources in Y, both parties agree to collaborate in the production of Z'. This provides context and explains why the two companies decided to work together. A software company engages a freelancer to create a specific piece of software. The recital in this contract could state: 'Whereas, the Company requires a specific software solution and the Freelancer has the necessary skills and experience to develop such a software, both parties enter into this agreement'. This explains the need for the agreement and the reasons for choosing this particular freelancer.