Opinion ID: 76376
Heading Depth: 3
Heading Rank: 1

Heading: The Whereas Clause

Text: 12 Whetstone argues that the first whereas clause's reference to Kraft NA's subsidiaries operates to bind Kraft UK to the Settlement Agreement. That clause states: WHEREAS, Kraft or one of its subsidiaries have been involved in the production and marketing of a `Chocolate Orange' confectionery product which is sold in a particular container (the `Kraft Trade Dress'). (Emphasis added). Whetstone argues that the purpose of the agreement was to redress the perceived invasion of rights possessed by Kraft or one of its subsidiaries. They allege that the Settlement Agreement included the first whereas clause to make clear that Kraft NA entered into the agreement as the manufacturer of the product. Thus, Whetstone maintains that Kraft NA, as the parent corporation of Kraft UK, entered into the agreement on behalf of itself as well as all of its subsidiaries who were manufacturing Terry's Chocolate Orange at the time it entered into the Settlement Agreement. Although some scenarios would allow Kraft NA to bind its subsidiaries, including Kraft UK, 8 such is not the case here. 13 First, the whereas clause is a true statement of the facts. Kraft UK is a subsidiary of Kraft NA and does produce and market Terry's Chocolate Orange. Consequently, the whereas clause accurately states Kraft NA's production system, but does not suggest that Kraft NA entered into the Settlement Agreement as a manufacturer. Rather, Kraft NA is an importer of Terry's Chocolate Orange and has a nonmanufacturing interest in protecting its own trade dress rights. See 15 U.S.C. § 1125(a). 9 Moreover, whereas clauses are not binding when the contract is otherwise unambiguous. Johnson v. Johnson, 725 So.2d 1209, 1212-13 (Fla. Dist.Ct.App.1999). They are merely prefatory recitations of the facts that lead the parties to enter the agreement. Id. 14 General principles of corporate law also dictate a conclusion that the whereas clause does not operate to bind Kraft UK. Corporations are separate legal entities and contracts made by a parent corporation do not bind a subsidiary merely because one corporation owns all of the stock of the other corporation. St. Petersburg Sheraton Corp. v. Stuart, 242 So.2d 185, 190 (Fla.Dist.Ct.App.1970); see Peacock v. General Motors Acceptance Corp., 432 So.2d 142, 143 (Fla.Dist.Ct.App.1983). The agreement, according to its terms, was between Kraft NA and Whetstone. Absent facts that would allow us to disregard Kraft UK's status as a separate entity, Kraft NA, acting as an importer alone, has no ability to bind Kraft UK, a separate entity, without Kraft UK's permission. See Southeast Capital Inv. Corp. v. Albemarle Hotel, Inc., 550 So.2d 49, 51 (Fla. Dist. Ct.App. 1989) (citing Dania Jai-Alai Palace, Inc. v. Sykes, 450 So.2d 1114 (Fla. 1984)); Peacock, 432 So.2d at 144 (discussing the circumstances under which the corporate form can be disregarded for torts committed by a related entity).