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What does now therefore mean in a contract?
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Now Therefore Meaning
You’re looking at a draft contract and you see the phrase “now, therefore…” and wonder what it means.
What does now therefore mean in contracts?
“Now therefore” is a phrase typically used right after the contract preamble where you outline some key background information relating to the contract and what the parties are trying to achieve.
For example, a contract preamble can start as follows:
Whereas Party A is a company specializing in software development;
Whereas Party A wishes to retain Party A’s services for custom software development;
Now, therefore, the parties agree as follows:
As you can see, following the short preamble, the now therefore is a phrase used to commence the first formal provision of the contract.
Whereas
At the beginning of most contracts, particularly commercial contracts, you’ll find a series of clauses beginning with the term “Whereas”.
The whereas clauses are part of the contract recitals or preamble where the contracting parties present certain factual background or context as to why they are entering into a contract.
Typically, the parties include a short provision explaining who they are and what is the overall objective of the contract.
For example:
WHEREAS Party A is a writer;
WHEREAS Party B wishes to mandate Party A to write original content for the publication of a book;
WHEREAS the Parties wish to outline their agreement in writing;
NOW, THEREFORE, the Parties hereby agree to the following terms and conditions:
In this example, the recitals present the parties and quickly outlines the objective of the agreement.
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WHEREAS Party A is a writer;
WHEREAS Party B wishes to mandate Party A to write original content for the publication of a book;
WHEREAS the Parties wish to outline their agreement in writing;
NOW, THEREFORE, the Parties hereby agree to the following terms and conditions:
Now, Therefore
Now therefore is a phrase that is included in a contract right after the recitals and before the commencement of the main contract language.
The “now, therefore” phrase will also be omitted if the contract does not have a preamble or recitals.
However, if a preamble is included in the contract, the main method is to transition between the recitals and the body of the contract.
Here is an example of a settlement agreement between the US Department of Housing and Urban Development with a few entities:
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Now Therefore Examples
Let’s look at a few examples of now therefore in contracts to better illustrate how it is used.
Example 1
WHEREAS Company A, a Delaware corporation, hereinafter referred to as the “Corporation,” proposes to file with the Securities and Exchange Commission an annual report on Form 10-K;
NOW, THEREFORE, each of the undersigned hereby constitutes and appoints Ms. Jane Doe as the attorney for the undersigned to execute and file such annual report, and thereafter to execute and file any amendment or amendments thereto, hereby giving and granting to said attorney full power and authority to do and perform each and every act and thing whatsoever requisite and necessary to be done.
Example 2
WHEREAS, the undersigned is the Treasurer of the Trust;
NOW, THEREFORE, the undersigned hereby constitutes and appoints Person 1, Person 2, and Person 3 as attorneys for him and in his name, place and stead, and in his capacity in the Trust, to execute and file any Amendment or Amendments to the Trust’s Registration Statement, hereby giving and granting to said attorneys full power and authority to do and perform all and every act and thing whatsoever requisite and necessary to be done in and about the premises as fully to all intents and purposes as he might or could do if personally present at the doing thereof, hereby ratifying and confirming all that said attorneys may or shall lawfully do or cause to be done by virtue hereof.
Example 3
WHEREAS Company A is a general contractor;
WHEREAS Company B is specialized in electrical work;
WHEREAS Company A wishes to mandate Company B in the context of a certain office building construction;
NOW, THEREFORE, the parties hereby agree to the following terms and conditions:
Example 4
Here is an example of a Professional Services Agreement where the parties have included the recitals and the now therefore phrase:
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Now Therefore FAQ
What is the now therefore meaning?
Now therefore is a legal phrase used to transition between the contract recitals and the body of the contract.
Typically, a contract will start with several Whereas Clauses where some background information is provided.
Then, to transition from the Whereas Clauses to the body of the contract, you’ll some “Whereas now, therefore” or “Now, therefore”.
Do you have to use now therefore clause in your contract?
You don’t have to use the “now therefore” in your contract.
Generally, this phrase can be omitted altogether if the contract does not have any recitals.
However, if you have recitals, you can simply transition between your recitals and the body of the contract by saying, “The Parties therefore agree as follows:”.
Every contract professional’s primary objective is to keep the contract simple and easy to understand.
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What comes after now therefore in a contract?
Immediately after Now Therefore is generally the first clause of the contract or the commencement of the contract body.
In the contract body, the parties will substantively outline their contractual rights and duties.
Takeaways
So there you have it folks!
What does “now therefore” mean in a contract preamble?
Now therefore is a phrase used in contracts right after the preamble and right before the main body of the contract.
Although “now therefore” sounds strange and perhaps confusing, it continues to be used in contracts as it has been done so for ages.
Now that you know what now therefore means, good luck with your contract!
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