Contract Glossary
Whereas Clause
Definition
A whereas clause (also called a recital) is an introductory statement at the beginning of a contract that provides background information, context, and the parties' intentions for entering the agreement. Whereas clauses begin with the word 'WHEREAS' and explain why the contract exists, what the parties hope to accomplish, and any relevant facts that inform the agreement's purpose. While typically not creating binding obligations themselves, whereas clauses help courts interpret ambiguous contract terms by establishing the parties' intent.
In Practice
A technology licensing agreement begins with several whereas clauses: 'WHEREAS, Licensor has developed proprietary software for inventory management; WHEREAS, Licensee operates a chain of retail stores and desires to use such software; WHEREAS, the parties wish to establish terms for licensing and support.' When a dispute later arises about whether the license covers online stores (not just physical retail), the court looks at these recitals to understand the original scope of intent.
Example Clause
WHEREAS, Company A is engaged in the business of software development and owns certain proprietary technology described herein; and WHEREAS, Company B desires to license such technology for use in its retail operations; and WHEREAS, the Parties wish to set forth the terms and conditions under which such license shall be granted; NOW, THEREFORE, in consideration of the mutual covenants contained herein, the Parties agree as follows:
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