Building Blocks of a Contract: The Fundamental Elements
Most contracts adhere to a standard structure i.e., organizing the contract’s elements in a sequence that enhances clarity and facilitates easy understanding of the provisions. Logically, using a standard format for arranging clauses is also sensible. For instance, placing the details of the Parties in the middle of the contract, after outlining their obligations, would be illogical.
Fundamental Elements of Contract
Introductory Clauses: The introductory section of the contract offers valuable information on the who, what, when, and why of the transaction. It essentially informs the audience about the nature of the contract, where it is made, the date of its creation, the background of the agreement, and what the Parties aim to achieve by entering into the contract. The Introductory Clauses predominantly has following components:
- Preamble
- Parties
- RecitalsInterpretation Clause
- Definitions
Frequently Asked Questions
Get answers to frequently asked questions about everything we do.
What is the purpose of structuring a contract into standard elements?
The essential elements include:
- Introductory Clauses
- Substantive (Operative) Clauses
- End-game Clauses
- Boilerplate Clauses