Ozeki Technical 003: Understanding the Structure of Legal Contracts – The Cover Page

Ozeki Technical 003: Understanding the Structure of Legal Contracts – The Cover Page

The Contract Cover Page

There is no universal standard for what to include on a cover page for a contract.  However, given the high volume of transactions and constant turnover in large corporations, a cover page serves as a critical summary of the most important aspects of a contract.

The first recorded instance of the phrase "Contract Cover Page" appearing online, dates back to January 20, 1976, in the document titled "Relations between States and international organizations (second part of the topic)." Buried within this text is a brief instruction on how to assemble a contract cover page, indicating that the concept was already familiar to the legal community at that time.

Remarkably, the document provides no further explanation of what constitutes a "contract cover page," implying that this was well understood within the legal community. If we delve deeper into history, we find that legal texts from the early 20th century, such as William Herbert Page's The Law of Contracts published in 1920, discuss the importance of properly structuring contracts, though they may not explicitly use the term "cover page" as we know it today.

Going even further back, we reach Roman times, where we discover that the Romans used something very similar to a contract cover page in their Diplomas and Tabulae.

Here is an image of a Roman Diploma (not to be confused with a modern diploma, this was more akin to a legal government record), preserved in the Weissenburg Museum, Germany.

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But What is a Contract Cover Page?

Imagine a contract worth $100 million that is 800 pages long. No one has the time or resources to sift through all that text to understand its contents. This is where the cover page proves invaluable. A typical cover page includes:

1. The Title of the Contract
2. The Names of the Parties Involved
3. The Date of the Agreement
4. A Brief Description of the Contract's Purpose

The Title of the Contract

The contract title plays several key roles:

• Clarity and Purpose: The title immediately informs the reader about the nature of the agreement. For instance, "Non-Disclosure Agreement" clearly indicates the type of legal arrangement.
• Identification: The title aids in the quick reference and searchability of the contract.
• ‍Scope of Agreement: The title often indicates the breadth of the agreement. For example, "Master Services Agreement" signals a comprehensive contract.

Additionally, contract titles often aim for neutrality to avoid bias toward any party, such as using "Supply Agreement" instead of "Sales Agreement."

The Names of the Parties Involved

Identifying the parties involved in a contract is a critical element of the cover page. This section clearly lists all entities participating in the agreement, ensuring no ambiguity about who is entering into the contract.

• Clear Identification: Ensures that each party is unambiguously identified, reducing the risk of confusion or legal disputes.
• Accountability: Establishes responsibility and clarifies the roles of each party, which is fundamental in legal contexts.
• Legal Clarity: Proper identification of parties is crucial for the enforceability of the contract.

‍How to List the Parties:

• Use full legal names, including designations like "Inc." or "LLC."
• Include addresses and contact information to further reduce ambiguity.
• Clearly state the role of each party (e.g., "Buyer," "Seller").

Example:

"This Agreement is made and entered into by and between Ozeki Technologies., a corporation organized under the laws of DE, and ABC Enterprises LLC, a limited liability company."

The Date of the Agreement

The date on the cover page specifies when the contract is formally executed and becomes effective, serving as a reference point for the start of the contractual terms and obligations.

• Reference Point: Provides a clear timeline for when the contract terms begin.
• Legal Timeframes: Determines the validity period of the contract and any deadlines.
• Historical Record: Serves as an official record, crucial for resolving disputes.

How to List the Date:

• Execution Date: The date when the parties sign the contract.
• Effective Date: The date when the contract terms start to apply, which may differ from the execution date.

Example:

"This Agreement is made and entered into on [Execution Date], and shall become effective on [Effective Date], by and between [Party 1] and [Party 2]."

A Brief Description of the Contract's Purpose

A brief description provides an overview of the contract's main objective, placed prominently on the cover page to help readers quickly understand its essential content and intent.

• Quick Reference: A snapshot of the contract’s main objective, aiding in quick identification.
• Context Setting: Provides a framework for interpreting the detailed clauses that follow.
• Clarity: Helps ensure all parties are aligned on the contract’s goals and expectations.

How to Provide a Brief Description:

• Write a concise summary that encapsulates the essence of the contract.
• Mention specific goals or activities covered by the contract.

‍Example:

"This Agreement is for the development and delivery of custom software solutions by XYZ Software Solutions Inc. for ABC Enterprises LLC."

In the next technical article, I will dive into one of my favorite aspects of contract structures: the Preamble in modern contracts, exploring its significance and practical applications.

References

1. Cornell Law School - Contract Basics
2. American Bar Association - Guide to Contract Law
3. Legal Information Institute - Contract Law
4. University of California, Berkeley - Understanding Contracts
5. University of Oxford - Contract Law Principles
6. History of Information - Contract Cover Page Origins
7. Ancient Origins - Roman Legal Documents

Disclaimer: Ozeki is not a law firm, and this blog post does not constitute or contain legal advice. Use of, and access to, this blog material does not create an attorney-client relationship with Ozeki.  In other words, if this were legal advice, a bill would follow.

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