Schedules, annexes, appendices – structuring issues

In this second blog post about schedules, annexes, exhibits and attachments, I will discuss where to place them; and how to deal with ‘schedules to schedules’.

Where to place (in or out)? Also the policy for including matters into a schedule varies. English law firms tend to move elaborate clauses or case-specific clauses to schedules (and place the signature block on the last page of the contract but before any schedules). The background to this is probably that standardised parts of a transaction should be separated from customised parts, especially if the annexed clauses are operational rather than subject to negotiation; it also reflects the modular nature of modern contracting, also visible in contract assembly (as this is Weagree’s other product). Obviously, moving such provisions to a schedule improves the readability of what remains. U.S. legal practice tends to keep as much as possible in the main agreement (i.e. resulting in bulky articles containing warranties).

Schedules to schedules (annexes to schedules). If a transaction becomes complex (and hence the master or umbrella agreement contains several sub-agreements), those sub-agreements will likely contain schedules as well. Although there is no limit of the number of schedules which can be contained within scheduled documents; a document structure with more than three levels is not usual. Common examples of multi-layered transaction documents are:

  • a share or asset purchase agreement contains a schedule with all the seller’s warranties; whereas such a warranties schedule will contain factual details and lists of assets, intellectual property rights and material contracts in annexes attached to the warranties schedule;
  • the same applies to the disclosure schedule, which is usually a schedule to the share or asset purchase agreement, and which will itself have annexes in which the disclosed court proceedings, claims, intellectual property infringement claims, disputed patent registrations or building renewal plans are attached;
  • a joint venture agreement may have a business contribution agreement as a schedule, such contribution will take the form of a share or asset transfer agreement and, accordingly, any warranties will be addressed in an attachment to the contribution agreement.

Naming of schedules to schedules. Embedding schedules into schedules raises the naming question again. It is a good idea to use a different naming convention for these embedded schedules. For example, it is a good idea to refer to the schedules to the main agreement as schedule and to call the attachments to those schedules an annex (or exhibit).

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