Nickname. Whenever possible, use a defined term that matches the business name of the business or is composed of words from the entity`s name. This is preferred to a fancy abbreviation or acronym. Nevertheless, an acronym is appropriate if the party is known to it, if its name contains that acronym, or if the parties are affiliates (with similar names). Individuals. Individuals are generally defined by their surname without title (i.e. Excluding Mr., Mrs., Mrs.), except in letters of agreement in which the title would normally be included. Professors are often defined by their short title. n. Notice in a written contract to identify one of the persons entering into the contract.
The agreement would read as follows: “Mary McConnell (hereinafter referred to as the Part One Party)”. It is preferable to identify the parties by an abbreviated form of their name (hereinafter referred to as “McConnell”) or as a buyer, seller, owner, trustee or other useful identification. The use of the name helps in the continuation and understanding of the contract and avoids confusion with “the second party party” that identifies another party to the agreement. If you use a functional reference to define a party, the name must specify the party.B functional role in the agreement (for example, seller, licensor, lender). Alternatively, it could depend on the form of the party`s legal entity (company; Enterprises). There are contract authors who prefer to avoid defined terms “paired” that differ only in their last syllable (c.B owner-tenant, licensee-licensor). If you are using a functional reference, omit the specific item (i.e. give preference to the buyer over the buyer). This will make things much easier if you`re using contract assembly applications where replacing the reference with a name reference is very easy, but more difficult if the item is used (i.e.
two replacement algorithms are needed for The and The). However, be consistent in whether or not to use the particular item throughout the contract. A phrase used in a document to avoid repeating the names of the people mentioned in it for the first time. To designate a party in the Agreement, use either the functional reference (e.B. seller, licensee, service provider, lender) or the short name of the party (e.B. Weagree, Shell, Philips, Sony). It is worth referring to one`s own party with its short name and to the other with a functional reference. Do not use alternatively defined terms that refer to the same party (i.e.
not: hereinafter Buyer or Weagree). It serves no purpose and does not facilitate reading (on the contrary, it hides a careless copy and paste from various contractual sources by the author). Define one of the two terms of the introductory clause of the part, immediately after the identification details of each party. Do not include the defined term in the definition article. Definitions of grouped parties. Many contracts exist between groups of counterparties. It makes sense to define each part individually (and don`t forget to use the specifically defined term when referring only to that part) and additionally define each part by grouping the individual parts together. For example, in an asset purchase agreement, there are often multiple sellers (and buyers), one for intangible assets (IP), one for each international tax entity, finance companies for shareholder loans, and often the parent company for certain operating assets. Another example is found in joint venture agreements (or shareholder agreements), where the final holding company is often the main party, while the actual shareholder is a tax-advantaged local entity (or even a shelving company).
In these examples, it is recommended to refer to the seller or ABC on the one hand and the buyer or XYZ on the other hand. If you are a group of affiliates, keep in mind that such processing may also raise issues of joint and several liability for the performance of an affiliate`s obligations. In many companies, this only raises theoretical questions, but it is advisable to treat joint and several liability in a separate clause. If there is joint and several liability, this may trigger questions or notification obligations under (the restrictive covenants of) a framework loan or a facility agreement of that company. Outdated language used to identify one of the parties to an agreement. Modern contractual practice is to identify the parties by abbreviations or by an identifier such as buyer, seller, lessee, lessor, licensee or licensor. 01.02.16 Part of Part I / Part ii Functional References. In general, a contract would be easier to read if the short name is used rather than a functional reference. However, functional references, such as buyer or shareholder, are appropriate in the following contexts:. .