Eliminating Incidental Information from the Introductory Clause

Last year I drafted the following introductory clause to a merger agreement:

This merger agreement is dated March 23, 2006, and is between DARIUS TECHNOLOGIES, INC., a California corporation (“Parent”), SWORDFISH ACQUISITION, INC., a California corporation and a wholly-owned subsidiary of Parent (“Sub”), TROMBONE SOFTWARE, INC., a Delaware corporation (“Target”), and the stockholders of Target, namely XYLER XAVIER, an individual (“Xavier”), YOLANTA YOUNG, an individual (“Young”), and ZENEDINE ZELIG, an individual (“Zelig” and, together with Xavier and Young, the “Stockholders”).

The strikethrough text constitutes incidental information. Once you start including incidental information in the introductory clause, such as information regarding relationships among the parties and what role a party has in a given transaction, it’s hard to know when to stop, and the introductory clause can quickly become cluttered.

Also, putting all such information in one place—namely in the recitals—should as a general matter make life easier for the reader.

So in this case, I’d delete the strikethrough text and include in the recitals the following sentence: “Sub is a wholly owned subsidiary of Parent, and the Stockholders own all outstanding capital stock of Target.” I acknowledge that this arrangement is not necessarily any clearer or more economical, but that’s less imporant to me than the predictability offered by a bright-line rule.

But I’m still mulling this over. [And note that it’s not what I say in MSCD; see Steve’s comment below.] Any thoughts?

About the author

Ken Adams is the leading authority on how to say clearly whatever you want to say in a contract. He’s author of A Manual of Style for Contract Drafting, and he offers online and in-person training around the world. He’s also chief content officer of LegalSifter, Inc., a company that combines artificial intelligence and expertise to assist with review of contracts.