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Rule 1.110(303.3) 'Whereas' clause of contract is prefatory, not binding.
“Whereas” clauses should be used to explain why the resolution is necessary, and should also provide some background on the issue that the resolution takes a stand on.
The contract might start with a Whereas clause like this: 'Whereas, the parties wish to collaborate in the development of new technology...'. This Whereas clause is setting out the purpose of the contract: to set up a partnership for developing technology.
A “submission agreement” (also called an “agreement to arbitrate”) is a written agreement between two parties that establishes the use of arbitration to settle a dispute (or any and all disputes) that may arise between them.
'Whereas' is often used in legal documents and proclamations it means 'that being the case' or 'in view of the fact'.
A submission agreement will contain details of the dispute and the issues between the parties, and record that it is being referred to arbitration. It will then contain the same essential details as an arbitration clause, such as the legal seat and number of arbitrators.
The seat and venue of arbitration should be specifically mentioned. Language of Arbitration: The clause should specify the language in which the arbitration will be conducted if parties speak different languages. This is crucial for ensuring that all parties can effectively participate in the process.
The dispute resolution clause shall state the manner in which any dispute between the parties shall be solved. Where the parties agree to arbitrate any disputes under the SCC Rules, we recommend that the SCC Dispute Resolution Clauses are included in the contract.
We noted that arbitration clauses are made before any dispute arises. Submission agreements, however, are agreements to arbitrate made after the dispute has arisen.