Prior or Contemporaneous Agreements: Understanding the Importance in Business Agreements
When entering into a business agreement, it is important to understand the significance of prior or contemporaneous agreements. These agreements can have a significant impact on the interpretation and enforcement of the terms of the agreement.
What are Prior or Contemporaneous Agreements?
Prior or contemporaneous agreements refer to any agreements that were made between the parties before or at the same time as the current agreement. These agreements can include written contracts, oral agreements, and even emails or other communications between the parties.
Why are Prior or Contemporaneous Agreements Important?
Prior or contemporaneous agreements can have a significant impact on the interpretation and enforcement of the terms of the current agreement. They can provide important context and background information that can help to clarify the parties’ intent and understanding.
For example, if a party is claiming that a particular term in the current agreement should be interpreted in a certain way, the existence of a prior or contemporaneous agreement that uses similar language could support that interpretation.
On the other hand, if there is a prior or contemporaneous agreement that contradicts the terms of the current agreement, it could undermine the parties’ understanding and create confusion around the intent of the agreement.
How Should Prior or Contemporaneous Agreements be Addressed in Business Agreements?
When drafting a business agreement, it is important to address the issue of prior or contemporaneous agreements explicitly. The agreement should include a provision that addresses any prior or contemporaneous agreements and specifies how they should be interpreted in relation to the current agreement.
This provision should also address any conflicts or contradictions between the prior or contemporaneous agreements and the current agreement. It should clearly state which agreement will take precedence in the event of a conflict and how any inconsistencies will be resolved.
In addition, it is important to conduct due diligence before entering into a business agreement to identify any prior or contemporaneous agreements that may exist. This can help to avoid potential conflicts or misunderstandings down the road.
Conclusion
Prior or contemporaneous agreements can have a significant impact on the interpretation and enforcement of the terms of a business agreement. It is important to address these agreements explicitly in the agreement itself and to conduct due diligence to identify any existing agreements that may impact the current agreement. By doing so, parties can ensure that the terms of their agreement are clear and enforceable.