Do the Exhibits Really Matter?
Updated: May 17, 2020
Lawyers often draft contracts with attached exhibits to simplify the contract language by moving details out of the body of the contract and into the exhibits. For example, an asset purchase agreement might have separate exhibits to include a list of assets being purchased, a list of excluded assets being retained by the seller, and a list of contracts being transferred to the buyer. The exhibits are an integral part of the contract.
If the exhibits are so important, why do many contracting parties sign contracts with blank exhibits? Perhaps no one thinks the exhibits are important. Perhaps the parties are so focused on negotiating the contract that they run out of time to pull together the exhibits before signing. Perhaps the parties think it's too difficult to pull together the exhibits, so they just skip it. Perhaps the parties think that everyone knows what is meant to be included in the exhibits. Or, perhaps the parties think they will get the exhibits together after the contract has been signed (unlikely). Whatever the reason, failing to complete the exhibits before signing is extremely risky because significant details of the agreement are being left out.
If you are negotiating a contract that will include attached exhibits (or schedules), then treat the exhibits with the same importance you are treating the rest of the contract and make sure the exhibits are completed and attached before you sign. Otherwise, you risk entering into an agreement that doesn't contain all the details you need.