A preliminary statement in a contract or deed explaining the reasons for entering into it or the background of the transaction, showing the existence of particular facts.
Recitals are the statements made at the beginning of a contract. They typically state the reason for the agreement or facts about the parties that lead to the agreement. Historically, recitals have begun with “Whereas”. This, of course, is going away. Recitals are factual statements about the agreement that explain the agreement. Examples are:
The need the agreement is going to meet. (e.g. Company A needs a software engineer to write code for its new software application.)
The identity of the parties to the agreement. (e.g. John Doe is a software engineer who specializes the type of software to be created by Company A.)
The purpose of the agreement. (e.g. The parties desire to join their business ideas together in the joint venture that is the subject of this agreement.)
Recitals are important because they help to outline the intentions of the parties. It helps the reader understand the rest of the contract if the intentions are clear.