Recitals in Contracts

In negotiating a contract, parties often spend little time contesting the language in the recitals.  In a hurry to get to the seemingly more significant terms of the agreement, the lines beginning with "Whereas" often receive less attention.  At one level, this is understandable since the recitals  appear to be a benign introduction to the actual agreement. 

This neglect, however, can have serious consequences.  For example, in Miller v. Miller, 276 Or. 639, 647 (1976), the Oregon Supreme Court held that where the recital clause of a contract is inconsistent with an operative provision of the contract, the contract as a whole is ambiguous.  Moreover, ORS 42.300 provides that "[e]xcept for the recital of a consideration, the truth of facts recited from the recital in a written instrument shall not be denied by parties thereto, their representatives or successors in interest by a subsequent title." 

Simply, since the recitals cannot later be denied, parties must carefully analyze them before entering into the contract.  This examination, ideally by a litigator, should not only include a review of the accuracy of the facts recited, but also include a review of how the recitals interact with the more heavily-negotiated terms of the agreement.