• August 11, 2010

It is a convention of many contractual agreements to begin with a title, a very brief sentence identifying the contracting parties and the date, followed by “recitals,” followed by “the agreement.” ¬†“Recitals” often are numbered and start with “Whereas,” as in, “Whereas the Party A has a broken car, Whereas Party B is a mechanic…”

In a case decided this week by the Minnesota Court of Appeals (Bjorkman, Schumaker, Larkin, in an opinion by Bjorkman), the Court of Appeals reversed the Hennepin County District Court (John Q. McShane, J.), holding that “Recitals are not a part of the contract and are not legally binding.” ¬†Therefore, even though the recitals muddled up the obligations and terms of an underlying loan agreement in the CMIC case, the guarantor’s agreement was crystal clear, unambiguous, and enforceable.

Another win for one of the most prominent, if not THE most prominent Twin Cities appellate specialist, Kay Nord Hunt of the Lommen Abdo firm.

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