After discussing the basic elements of contracts, the title and the parties, let's proceed to the next portion you usually see in contracts - the preamble, better known as the"Whereas Clauses." Some contracts contain "Whereas Clauses," which are found between the designation of the parties and the terms/conditions. These three components (Title, Parties and "Whereas Clauses") usually look like this:

ACME, INC., a corporation duly organized and existing under and by virtue of the laws of the Philippines, with office address at XYZ Avenue, Quezon City, represented by its President and Chief Executive Officer, FRED PINOY, hereinafter referred to as the "EMPLOYER".

 

-  and  -

        
JUAN DE LA CRUZ, Filipino, of legal age and with address at ABC Street, Quezon City, hereinafter referred to as the “EMPLOYEE”.

WHEREAS, the COMPANY is in need of a programmer and the EMPLOYEE possesses the necessary education and professional skills in accordance with the standards and/or qualifications set by the COMPANY;

WHEREAS, the EMPLOYEE has applied for the position and fully agreed to the terms and conditions stated herein;

NOW, THEREFORE, for in consideration of the foregoing, the parties freely and voluntarily enter into this Agreement under the following terms and conditions:

 

What's the significance of the "Whereas Clauses"?

Well, nothing extraordinary, really. The "Whereas Clauses" don't add to the terms and conditions, or the nature, of the contract. It is, however, a tool that can be used in case there is an ambiguity or controversy as to the terms and conditions, or even the nature, of a contract. In other words, it's a tool in the interpretation of contracts. Used in relation to other rules in the interpretation of contracts, it may help in determing the intent of the parties.