2 Named parties, effective date, consideration, recitations

Desired Result

The initial sections of the license should lay out the basic information about the contract and, when relevant, situate the terms within the context of other documents that may be relevant to the current agreement. The goal of these sections is to ensure that a contract is properly formed between the licensor and licensee and that everyone is on the same page about what terms apply to the content being licensed.

Essentials of the Law

Most contracts will begin with a statement defining who the parties to the contract are, along with the effective date of the agreement.  A standard version of this language can be found in the Desired Language section below.  The parties to the agreement should be the legal entities that are engaging in the contractual relationship.  For your institution, that will usually be the legal name and official address of the institution, and for the licensor it will generally be the corporate name and address of the company.  This section will also usually define terms, identified in parentheses and quotation marks, to use as shorthand throughout the document to refer to the contracting parties and the agreement itself – for example: (the “Agreement”), (hereafter, the “Licensee”), or (“Licensor”).

The effective date of the agreement should also be included in the preliminaries.  The effective date is the date that the contract starts and becomes enforceable.  Generally this will be the date that the final signatory to the agreement has signed it, but it may also be a future date when access is designated to begin, or may in some situations be back-dated to a prior date.  Since access and payment obligations will generally be tied to the effective date of the agreement, it is important that the effective date is included and is accurate.

A final part of this preliminary language will generally include a “recitation of consideration.”  “Consideration” is the formal term for the exchange of goods or services necessary to form a contract. Each party is receiving something (access to eresources and payment, respectively), and that makes the agreement a contract that can be enforced in a court of law, rather than simply a gift that could be revoked by the giving party.  Consideration is usually self-evident in contracts, however it is a historical norm in contracting to state that acceptable consideration has been given in order to show that both parties agree that they are forming a contract and intend to be bound. Examples of this language can be found below.

In some contracts you may also see a “recitations” or “recitals” section early in the contract, or a series of clauses that start with “whereas.”  These clauses are not obligatory, but are common in some styles of contracting and generally set the context for the contract. They can state the intentions and background of the agreement and generally are not legally binding on their own, but may be used to aid in the interpretation of the contract terms in the event of a dispute.  Your goal if presented with recitation clauses should be to ensure that they are accurate in any representation of facts or intentions, and that all expressed intentions are then included in the later substantive portions of the contract.

Desired Language

Named Parties, effective date

This License Agreement, along with [list any schedules or attachments] (the “Agreement”), is made effective as of [enter date] (the “Effective Date”) between [enter publisher’s official corporate name, street address, city, state, postal code, and country] (the “Licensor”) and [enter licensing institution’s official corporate or entity name, street address, city, state, postal code, and country] (the “Licensee”). ^[1]

Consideration

In consideration of the mutual promises this Agreement contains, and other valuable and sufficient consideration, the Licensor and Licensee agree as follows:^[2]

In consideration of the mutual promises contained herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows: ^[3]

Tricks and Traps

Generally, this is a pretty straightforward part of the contract.

You may need to check with your general counsel or administration to determine the legal entity that should be the named party. Note that some institutions are more multilayered than others.  For most university libraries, for example, the contracting party will be the university rather than the university library, even if the library is the unit within the university that entirely handles the contract negotiation.

It is also important to ensure that the effective date of the agreement is recorded accurately. It can be surprisingly easy to forget to come back and fill in the effective date once you get to the finalizing stages of license negotiation.  Don’t do that!  Licenses have a long lifespan, and the effective date can be relevant long into the future.  Your future self or successors will appreciate clear recordkeeping of effective dates.

It is also worth double checking that all relevant amendments and attachments are referenced and incorporated into the agreement, particularly if you are carrying forward substantive amendments that have been previously negotiated.  For more about this, see the Master Agreement and Amendments section of this guide.

Consideration is not likely to be a contentious issue in eresource contracting.  It is important that you understand the concept and the use of the term in your contracts, however.  This is an instance where the legal term of art differs from the standard modern meaning, which can sometimes lead to misunderstandings.

Recitations are also unlikely to be problematic, but you should read them carefully for accuracy and avoid relying on them for substantive requirements of the contract.  If there is anything in the recitals that reflects the substantive requirements for the contract, you should ensure that it is also reflected in legally binding clauses.

Importance and Risk

It is important to have the information about the contracting parties and effective date be accurate in the agreement.  The named parties are the legal entities that will be bound by the terms of the contract and .  While errors in this section are unlikely, they could present outsized difficulties if they were inaccurate and you ever had to litigate a contract dispute with this vendor.  If consideration and recitations are present in the contract, they should be accurate.