Contract Drafting Class 11 Tues. Feb 21 University of Houston Law Center D. C. Toedt III

Sort into teams for next two weeks

Common contract screw-ups

When spell-checker isn’t enough … Sprinkle pasta dish with … salt, and … freshly ground black people Copies pulped - $18K down the drain

Drafting strategies

Letting sleeping dogs lie … Jan 2010: CoCo’s contract lawyers might have chosen not to ask for a 11:35 pm start time guarantee …

Plain English (cont’d)

Passive voice exercise 1. There is a considerable range of expertise demonstrated by the spam senders.

Passive voice exercise 1. There is a considerable range of expertise demonstrated by the spam senders. BETTER: “The spam senders demonstrated a considerable range of expertise.” BETTER STILL: “Evidently some spammers are experts – others, not so much.”

Representations and Warranties, cont’d

Review: Pros and cons of reps and warranties Representation  Not strict liability – must also prove scienter (intent or recklessness), plus justified reliance  “As of” date  Punitive damages, rescission  Burden of discovery, pre-trial motion practice Warranty  Strict liability – scienter & reliance not relevant  Can survive for months / years  Fewer hassles with discovery, pre-trial motions

CBS v. Ziff-Davis – sale of magazine division Rep/warranty re financial statements Due diligence: Accounting problems Lawsuit: Misrep. + breach of warranty (really: litigating the price afterwards) Holding:  No misrep.: Reliance not justified  BUT: Warranty claim succeeded Parties settled after appellate holding

Warranty claims: RELIANCE PROOF

Warranty claims: SCIENTER PROOF

Stark Exercise 9-1, Examples 1-7

End of class