The requisite of any contract is its preamble. It contains general information about the document and its sides. Incorrectly formatted preamble can turn into serious problems in the future.
What is the preamble of the treaty
The preamble should be understood as that section of the agreement that combines the name, number, date and place of its conclusion, as well as information about its participants. In the main part of the preamble, it is necessary to list the full names of the parties, their names according to the text of the agreement, as well as information about the persons signing the agreement, indicating their powers.
An example of the main text of the preamble of a purchase and sale agreement is the following wording: “Alpha Limited Liability Company, hereinafter referred to as the“Seller”, represented by Director Sergey Petrovich Ivanov, acting on the basis of the company's charter, on the one hand, and Limited Liability Company responsibility "Omega", hereinafter referred to as the "Buyer", represented by the director Ivan Ivanovich Sidorov, acting on the basis of the company's charter, on the other hand, entered into this agreement as follows."
If the person concluding the contract acts on the basis of a power of attorney, the preamble must indicate its data (number, date, as well as by whom it was issued). In the case when an individual entrepreneur is a party to the contract, his registration data are indicated in the preamble.
When concluding a contract with an individual, the preamble must contain the data of his passport. It can be used to determine whether an individual is a resident or non-resident. The amount of tax withheld from his income depends on this.
What mistakes can lead to in the design of the preamble
There are several common mistakes when filling out the preamble to a treaty. In the case of fraudulent schemes, the preamble to the agreement often indicates the inaccurate powers of the person authorized to conclude a transaction on behalf of the other party. As a result, the injured party usually cannot present any claims to the counterparty, since all responsibility rests with the dishonest person who signed the contract. Therefore, before signing an agreement, it is necessary to verify the authority of the person with those specified in the preamble.
Often in the preamble, the parties indicate their name, which is not typical for contracts of this type. For example, in contracts for work, the parties, instead of "Customer" and "Contractor" refer to themselves as "Customer" and "Executor". As a result, the parties may experience confusion both in the execution of the contract and at the stage of possible litigation.
When concluding an agreement with an individual entrepreneur, some indicate him in the preamble as a simple individual. As a result, the party paying income to such an entrepreneur involuntarily becomes a tax agent. In order to avoid this, it is necessary to clearly state in the preamble that the contract is concluded with an individual entrepreneur. In addition, in the conclusion of the contract, where there is a place for the details of the parties, it is necessary to indicate the registration data of the entrepreneur.
It is important to indicate the place of conclusion of the contract correctly when making foreign economic transactions. It can influence the choice of the country's legislation, which will govern the relationship between the parties.