Now therefore … the parties agree

A familiar funny phrase that initiates the provisions of an agreement is that therefore the parties agree what follows.

This blogpost addresses the whereabouts of it and of its common law counterpart.

A familiar funny phrase illustrative for the difference between contracts governed by a common law system and European continental contracts are the so-called ‘words of agreement’:

NOW, THEREFORE, in consideration of the premises and the mutual covenants set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto covenant and agree as follows.

The phrase is loaded with common law elements: consideration, as a requirement for the validity and enforceability of any unilateral promise or obligation (i.e., in most cases this is the (purchase) price); this consideration is suggested to be present in all parts of the agreement and whatever may be related but outside the contractual words; this consideration is anyhow sufficient for the obligations to which it pertains; whatever the nature of the consideration is, it is received; and, together with some redundant and archaic other wording, the phrase ends with a step-up to the contract provisions themselves.

In contracts governed by a European continental legal system (or a law historically based on the Napoleonic-Roman or Germanic legal tradition), it would be more than sufficient to write:

NOW THEREFORE, the Parties agree as follows:

or any other convenient header distinguishing the parties and the background description (e.g., Agreement:, or nothing at all). The words now therefore should be included only if the words of agreement are preceded by a preamble.

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