Did you ever think about a title?

No big deal. The title of a contract is a somewhat arbitrary part of your contracting practice. Giving a contract a title goes without saying. But there is something to say about it. That’s what this blog is about.

Each contract should be given a name (or title). Typically, it is placed prominently on the cover page (if any), at the top of the first page (either as the lead-in to the parties or, if there is no cover page, as a true title) and probably also in the footer of each page. On the cover and first page it is often printed in bold and all-capital of first-capital letters (even though it is not referring to a definition as capitalized terms otherwise do). The word agreement in the title is more common than the term contract. There is no difference in meaning.

Choosing a title. The title of a contract should simply reflect the nature or central purpose of the agreement, indicating whether it is a license, confidentiality agreement or other contract. The title should be concise: rather than Agreement for the Development, Implementation and Maintenance of Software use Master Software Services Agreement. However, the chosen title should not be meaningless, such as Agreement (without anything else). Do not give overly specific titles: a title should enable future users of a contract management system to identify the right contract (from amongst various contracts as part of one transaction) or to retrieve it in search of a useful precedent for another transaction of similar nature or purpose. The title should not describe the transaction from both perspectives, as in Agreement of Sale and Purchase. In order to avoid that (the in-house counsel of) the other party is alerted by a title suggesting that the contract is rather one-sided (i.e., presumably, a Sales Agreement is seller-friendly) use a more neutral alternative (e.g., Supply Agreement).
Do not include the party names in the title. However, mentioning parties may be preferable in exceptional cases: Sony Ericsson Shareholders Agreement. Avoid the use of abbreviations (jargon); rather than to SW refer to software.
If so desired, you can add a subtitle on the cover sheet (e.g., Share Purchase Agreement – related to the sale of Johnson Distribution Services). The subtitle should not be repeated on the first contract page or in the footers. Financial agreements such as major term loans or facility agreements often mention the principal amount as a subtitle (the LMA[1] model agreements recommend that the loan amount is used adjectivally and placed immediately above the contract title).

Agreements, amendments and addenda. Amendments, supplements and addenda should be entitled Amendment, Supplement or Addendum, respectively, possibly extended by its chronological amendment number and if desired also by the word agreement (e.g., Amendment Agreement IV). A subtitle could be added to identify the amended agreement.
Restated agreements. Sometimes, a contract does not anymore reflect the way the parties work together or it is amended so often that the complete picture is scattered over various amendments or addenda. Also, long term agreements such as successful joint ventures, sometimes provide for a renegotiation after an initial term. In such circumstances, it may well be desirable both to redraft the entire agreement and to emphasize that the existing commercial relationship is continued without inconsistencies or interruptions. To emphasize consistency with past practice, the new agreements would get a suffix Restated in their title (e.g., Restated Joint Venture Agreement). For example, a restatement of a joint venture arrangement would emphasize that the parties are bound by a high level of good faith rooted in a historically grown exceptional level of mutual trust. Similarly, a restatement may support disussions with a third person that a post-divestment contractual arrangement is in fact a continuation of previously not-documented intra-company transactions.
Letter agreements. A letter agreement amending or renewing an existing agreement should not refer to the agreement in the subject line since the amended or extended agreement would be identified in the first sentence.

[1]           The Loan Market Association (LMA) is a leading provider of recommended loan documentation and establishment of financial market practices. Their authoritative standard form precedents are referred to as ‘LMA‘.

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