Chapter 10 Contracts.pptx Chapter 10 Contracts.pptx

Chapter 10 Contracts.pptx

1. IMPORTANT DATES ASSSIGNMENT S – May 24 (Fri) MIDTERM – May 31 (Fri) FINAL EXAM: June 7 ( Fri )

2. Contract Preparation and Drafting CHAPTER 10

3. PREPARING TO DRAFT A CONTRACT You should take a number of steps before you begin drafting a contract, including obtaining facts, directions, and instructions, and organizing information. Once that is done, a draft is prepared, reviewed, and revised before it is presented to the other party. It will then be further revised as the party's reform and refine their positions during negotiations.

4. 1. OBTAIN INSTRUCTIONS Get Get all the necessary facts, including relevant documents such as collateral contracts or floor plans for a lease of commercial space Read Read any existing file matter, it may highlight important issues Understand Understand both parties' goals

5. 2. USE A CHECKLIST TO REVIEW FACTS A PRECEDENT HELP ENSURE THAT YOU HAVE OBTAINED ALL THE RELEVANT FATCS AND IDENTIFIED ALL OF THE LEGAL ISSUES Take care with precedents, though, because a precedent will rarely fit your case exactly . A precedent should not be used as a substitute for hard critical thought about the facts and issues of the case

6. 8. CREATE A LOGICAL SEQUENCE OF HEADINGS AND SUBHEADINGS Sequence the headings and subheadings in a logical way. In doing this you are creating an outline that can also form the basis for a table of contents for the contract. Try to do this without referring to a precedent, and use the precedent later to see if you have missed anything. You may want to write out the categories and headings on index cards, shuffle them at random, and start to lay them out, organizing and reorganizing them into a sequence that seems logical and coherent.

7. 8. CREATE A LOGICAL SEQUENCE OF HEADINGS AND SUBHEADINGS The sequence should use a logical approach, but most commonly, important matters come first: price and primary obligations of the parties followed by representations, conditions precedent, contract administrative matters, definitions, schedules, and appendixes. If there appear to be too many headings, determine whether some can be logically grouped as subheadings of a main heading. You are now ready to prepare a first draft of the contract.

8. DRAFTING A CONTRACT

9. BE PREPARED TO WRITE THE 1ST DRAFT IN ONE SITTING Writing the first draft in one sitting gives you some assurance of consistency and that you have included all of the necessary information.

10. 1. REVIEW PRECEDENTS CAREFULLY If you have a precedent, review it carefully and critically for appropriate language. Check to see whether the language used has been judicially interpreted. For whom was the precedent used: a client in the same position as your client or someone in the same position as the other party? Look at the precedent as though it came from the other party and examine it critically in that context, being prepared to reject or modify unsuitable provisions and to add suitable ones

11. 1. REVIEW PRECEDENTS CAREFULLY Remember that there are benefits to using precedents: they provide you with checklists, you may be able to use wording someone else has crafted that has with- stood judicial challenge, and you may be alerted to legal issues or problems you had not anticipated. Don’t be lulled into following a precedent that seems to be close to what you want— read it carefully and do not simply leap at it without thinking critically about it. Beware of including words, terms, or phrases that you do not understand— remember to research before you look at and adopt a precedent.

12. 2. DRAFT THE PROVISIONS OF THE AGREEMENT

13. 3. REVISE THE DRAFT If you mark a hard copy of the draft, use a red pencil so you can easily spot corrections. Enter the corrections from the hard copy of each draft after each revision. This will ensure that you always have a clean copy of the latest revision. Drafts should be given to the supervising lawyer and discussed with the client. Do not delete or throw out earlier drafts. Instead, number and date them.

14. 3. REVIEW THE DRAFT As revising continues through the period of negotiations with the other party, the content of a revision may become important if there is a disagreement as to what was decided, or, if after the contract is completed, there is a dispute about the meaning of a term. Previous revisions may show how a particular term was drafted and what it was meant to do. The drafts may even become evidence in interpreting the contract under exceptions to the parol evidence rule

15. COMMON LANGUAGE & DRAFTING PROBLEMS When you draft a contract, whether you have a precedent or not, exercise great care with the language. While plain language drafting makes the job easier than it used to be, you should be aware of a number of common writing problems. While some of the more common problems are identified below, you will still need to be familiar with and be prepared to use standard texts on interpretation and drafting.

16. STRUCTURE & PURPOSE OF A LEGAL SENTENCE All sentences consist of a subject, the person or thing being discussed, and a predicate, the part of the sentence that says something about the subject.

17. USING ACTIVE VOICE The legal actor who is performing the legal action must be identified so that everyone reading the document knows who is to act. This is done by using the active voice so that the reader knows who is to receive a benefit or perform an obligation. There are times, however, when you may not be able to identify the actor or when you will want to maintain uncertainty.

18. Recitals A part of a contract, at the beginning, that recites facts that establish the background of the parties and their purpose in entering into the contract

19. Fact situation or context The subject of a legal sentence tells you who is to act, and the predicate says what he or she is to do. The fact situation, or context, tells you in what circumstances the action in the predicate will take place. At times the context is implicit and clear, but at other times specifying the context can simplify meaning.

20. TERMS OF ART Words, phrases, or technical terms that have a fairly pre cise, specific legal meaning, often as a result of being interpreted and defined in previous court decisions

21. Drafting & Negotiating “the Deal”