Your client processes biometric data and needs a rather unusual indemnity that runs from the customer to the vendor if the customer's end users bring claims under state privacy laws. You draft the clause. It's tailored, defensible, and your client signs off. Then the counterparty's counsel sends it back, redlined to oblivion, with a note that says "this is non-standard."
The problem is not that the clause is non-standard. It is unexplained.
Contracts don't show their work. The operative text says what the parties must do, but it never says why. That silence is where negotiation friction lives. A provision that looks aggressive in isolation often looks reasonable once you understand the business rationale behind it.
DC Toedt, Redline (redline.net) member since 2013, floated an idea in a discussion on selling reverse indemnity to counterparties that deserves more attention than it gets: the use of footnotes. Attach a footnote to the operative clause explaining why it's drafted the way it is. Not a recital. Better than a side letter. A footnote, right there on the page, tethered to the provision it explains.
This works in two contexts. In negotiations, a footnote preempts the "this is non-standard" objection by showing the counterparty's lawyer the reasoning before they reach for the red pen. But it also works upstream, in initial template drafting. When you're building a client's standard form and a particular clause reflects that client's specific risk profile or industry practice, a footnote baked into the template does that explanatory work before any counterparty ever sees it.
The instinct might be to put that context in the recitals. Recitals are fine for high-level commercial background, but they sit at the top of the agreement, separated from the provisions they're meant to explain. Courts treat them as generalized interpretive aids that are not permitted to alter contract meaning. In Quick v. Plastic Solutions of Texas, Inc., 270 S.W.3d 173 (Tex. App. 2008), the court stated the rule plainly: recitals "generally will not control a contract's operative clauses" and may only be "looked to in determining the proper construction of the contract and the parties' intent." Same principle in England: in Blackpool Football Club (Properties) Ltd v JSC Baltic International Bank [2018] EWCA Civ 732, the Court of Appeal read the contract's recitals as interpretive context, not independent obligations.
A footnote is also an interpretive aid. But it has an advantage that a recital does not: it's tethered to the specific provision it explains. A recital in a preamble provides generalized commercial context. A footnote provides clause-specific justification, physically attached to the operative language. That proximity makes it harder for a court to sever the explanation from the obligation, and harder for a counterparty to ignore.
Footnotes in contracts are rare, not because they're a bad idea but because nobody thinks to use them. The format conventions of contract drafting calcified decades ago, and footnotes weren't part of the template. There's no rule against them, and the dual advantage of preempting objections and building the evidentiary record makes them a useful tool in commercial drafting.
