In MSCD and in this 2011 post I discuss using want in recitals instead of wish or desire. But how about intend?
I hereby propose a distinction in how to use intend in recitals.
First, don’t use intend for matters addressed in the contract. For that, stick with want or, if you prefer, desire or wish: intend isn’t a good fit. You intend to do that which is largely or entirely within your control; by contrast, nothing happens in a contract until the parties sign. So I’d use something other than intend in each of the following four examples from the SEC’s EDGAR system:
The Depositor intends to sell Certificates, to be issued hereunder in multiple Classes, which in the aggregate will evidence the entire beneficial ownership interest in the Trust to be created hereunder.
(B) Seller and the Local Sellers intend to sell the Business to Purchaser and its Affiliates pursuant to the terms and conditions of this Agreement and the other Transaction Documents.
WHEREAS, the Parties entered into a Contribution Agreement dated October 16, 2013, and the Parties intend to amend and restate such Contribution Agreement in its entirety as set forth herein;
WHEREAS, the Parties intend that AcquireCo be merged with and into Auxilium, with Auxilium surviving such merger on the terms and conditions of this Agreement (the “Merger”).
But it makes sense to use intend if you’re referring to matters that are addressed in some other contract or are otherwise outside the scope of the contract in question, as in the following examples:
WHEREAS, pursuant to the terms of the Supply Agreement, the Parties intend to supply to each other certain Products; and
WHEREAS, Seller intends to convert the Company and all of its Subsidiaries (as defined below) from corporations to limited liability companies;
A. Producer owns Oil and Gas Interests and intends to drill and complete Wells for the production of Hydrocarbons in the Initial Service Area and may from time to time own Oil and Gas Interests and may drill and complete Wells for the production of Hydrocarbons in other areas.
More generally, it’s usual to refer to courts looking to recitals for expressions of the parties intent. But that’s in the context of the contract having been signed, so it’s unrelated to use of intend in recitals.
I hope this is nitpicky enough for you …
7 thoughts on “Using “Intend” in Recitals”
I find this post confusing.
MSCD3 has a newcomer to the categories of contract language, ‘language of intention’.
That section (3.322) doesn’t distinguish between the use of such language in the recitals from use in the body of the contract.
Now you propose a distinction between two ways of using the word ‘intend’ (not ‘language of intention’ generally?), but only in recitals.
You reject the use of ‘intend’ in recitals to refer to ‘matters addressed in the contract’, but ‘it makes sense’ to use ‘intend’ in recitals to refer to matters outside the scope of the contract.
(1) ‘[y]ou intend to do that which is largely or entirely within your control; by contrast, nothing happens in a contract until the parties sign’ and
(2) ‘[m]ore generally, it’s usual to refer to courts looking to recitals for expressions of the parties intent. But that’s in the context of the contract having been signed, so it’s unrelated to use of *intend* in recitals’.
I think I understand what the proposed recommendation is, but not the reasons for it, and beg amplification.
This post relates only to recitals. Since it’s been up only a couple of hours, I’m not sure that I can expand on it. The core point is that it doesn’t accurately capture the meaning of the word intend to have the parties say that they intend to do what’s in the contract. When something isn’t under your control (as is the case before the contract has been signed), intention isn’t enough.
This is a subtle point, but since we have other words that are up to the task, I don’t see any point in adding intend to the mix.
When you’re referring to other contracts, or when you’re dealing with language of intention, that’s a different context.
If the parties “intend” something, let them write into the contract language that carries out their intention, and delete the recitals.
Intend is a potentially loaded word, as in letters of intent. Saying that you intend to enter into an agreement could amount to a representation. In civil code countries it might set up an obligation under the principle of culpa in contrahenda.
In recitals I prefer to say that X is “willing” to appoint Y as its distributor (which seems less promisey than “intends” to appoint), and I then go on to say “in accordance with the provisions of this Agreement” to try to link the statement in with the terms of the Agreement.
When in doubt, forsake the abstract and go for particulars.
Is the following the idea?
BAD: ‘By this agreement, the Franchisor and Franchisee intend to set up a store selling the Franchisor’s widgets’.
Bad, because if that’s what the parties mean to do in the contract at hand, they should just do it in the body and not talk about it in the recitals.
GOOD: ‘By this agreement and 14 others of various types being signed this day in various places around the world, the Franchisor intends to create a fully integrated global widget operation, from mining, to processing, to wholesaling, to retail shops, all controlled by the Franchisor and its subsidiaries and privies’.
Good, because it doesn’t talk about the internal workings of this piece of the puzzle, but about the whole puzzle of which this contact is one piece.
If this is the right interpretation, it contrasts the external ‘why’ of the contract (why is the Franchisor getting a Franchisee to sell widgets at retail?) with the internal ‘what’ of the contract (what are each party’s duties?).
The ‘why’ is potentially proper in a recital (as background), but the ‘what’ belongs in the body and not in the recitals.
I disagree with your suggestion that “intend” is inappropriate in the first example. I would probably use exactly that language, because although the Depositor intends to sell the Certificates, it’s not yet clear that anybody will buy them (at least, for a price the Depositor considers reasonable), and so the Depositor’s intention could be frustrated.
Likewise, in the second example, there may be conditions to closing that are never met, and the agreement probably provides for termination if closing doesn’t occur within a reasonable time. So I think “intend” is exactly right: this is what the Seller and the Local Sellers plan to do, but it’s possible that something unexpected will get in the way.