Take Care: Headings Can Affect Contract Interpretation
As a general practice, section headings should be used to identify the general subject matter of each contract provision, making it easier for the reader, writes Julie Brook for CEBblog.
“Section headings are very useful for ease of reference. They enable the reader to skim an agreement when searching for a particular provision or group of provisions,” she explains. “But headings can be a trap for the unwary—courts have used them to interpret the parties’ intent when a provision is ambiguous or misleading.”
She offers some advice on how the contract drafter can avoid the unintended consequences of headings.
