Contract Drafting Class 9 Tues. Feb 14 University of Houston Law Center D. C. Toedt III

Common contract screw-ups

Common contract screw-ups “8. The contract that is signed by both parties but with manuscript revisions initialled [sic] only by one party or by neither party.” [From “Top 10 howlers when preparing contracts for signature,” by the IP Draughts blog at http://goo.gl/Km6Dw.]

Valentine’s Day syntactic sins

True love …. Man has big trust fund for his kids Sued for killing another in car accident Adopts girlfriend so she’ll share ($70MM) in trust fund BUT: Is their relationship now incestuous – and thus illegal? Hat tip: ProfessorBainbridge.com

Florida incest statute 826.04 Incest. …. "Sexual intercourse" is the penetra-tion of the female sex organ by the male sex organ, however slight …. Quaere: 1. What did the drafters (presumably) intend for “however slight” to modify? 2. Could this have been better phrased?

Pretentiousness

Some pretentious expressions How could these be improved? Attains the age of Cease Commence Does not operate to do X

Lexicon

Channel-stuffing Sales people “sell” product to distributors who really can’t resell the product Why do this? Usually give distributor a return right in a (secret) side letter Bad business practice – screws up inventory planning, incurs extra costs Can be securities fraud

Lexicon review DSO – what is it?

Drafting exercise: Stark 6-1 (read Stark ch. 6)

Stark Exercise 6-1: DCT sample answer Much of this is “style” preference I like a complete sentence (contra Stark) A good title is “License Agreement” Date: Item 3 of Stark facts (or April 21) Date: “As of” is good, but optional Bold-faced names are easier to spot when scanning through lots of contracts States of incorp.: Item 11 of Stark facts Defined terms for parties are a good idea for later use in the document “Licensor” and “Licensee” – confusing? (But including them allows copy-and-paste from other documents) Some students included background facts; those are recitals, not part of the preamble This License Agreement (“Agreement”) is entered into as of February 9, 2012, by RALPH PRODUCTS, LP, a Virginia limited partnership (“Ralph LP” or “Licensor”); and MERCHANDISERS EXTRAORDINAIRE, INC., an Oregon corporation (“Merchan-disers” or “Licensee”).

Dell Master Purcha-sing Agrmt (Z&B pp. 236 et seq.)

End of class