1. Principles of Effective Contract Drafting
Endi Piper

2. Overview

3. Why Study Contract Drafting
Contract negotiation and drafting
is an exercise in selling.
Selling the parties on executing the
documents, now;
2. Selling the parties on voluntary
performance, after execution; and
3. Selling a court or other entity on
performance after voluntary
performance has ceased.

4. Purpose of a Contract Contracts attempt to articulate:
The rights and obligations of the
parties;
Provisions for events or contingencies
that while not expected, may occur.
Provisions that avoid any
undesired default provisions of any
applicable law.
Remedies and means of enforcing
or avoiding the rights and
obligations.

5. Role of the Attorney
Counselor to client
Advocate
Planner
Negotiator

6. Important Principles of Contract Law
1. Mutual assent – intent to contract. There must be a “meeting of the minds.”
2. Offer and acceptance.
3. Consideration – bargain for exchange.
4. Conditions – precedent and subsequent.
5. Representations, warranties, covenants and conditions.
6. Conclusion of a contract – expiration, termination, rescission.

7. Exercise #1 – Bobby Cool Rims and the Vintage 1954 Rolls Royce

8. The Deal Time Line
Most transactions follow a standard time line or chain of events.
General rule of thumb is that simple transactions take a shorter
period of time than longer transactions.

9. The Goal of Drafting – Precise Documents
Four elements of precision:
Accuracy.
Completeness.
Exactness.
Able to withstand hostile, critical
review.

10. The Form of Transactional Documents
Title
Introductory paragraph
Preambles/Recitals
Definitions or defined terms
Core substantive provisions
Representations, warranties,
covenants, indemnities,
guarantees, releases
Events of default and remedies
Boilerplate
Signature block
Exhibits and attachments

11. Characteristics of Plain English Drafting
1. Short sentences.
Definitive, concrete, everyday
language.
3. Use the “active” voice.
4. Use tabular presentation.
Separate paragraphs and sections
with headings for individual or
different concepts.
Avoid the use of “legal jargon,”
Latin or other foreign terms.
7. Avoid the use of double negatives.

12. The Drafting Process Investigate the facts.
Investigate applicable law as needed.
Develop a contact list and task schedule by deadlines and
responsible party.
Prepare initial drafts, use precedents and templates where
appropriate.
Circulate drafts for comments and revise as necessary.
Negotiate and memorialize the final definitive documents.
Execution of documents.
Closing.
Post Closing adjustments and clean-up.

13. Who Drafts the Contract
Contract usually drafted by
the party with the most
leverage
Can control which issues are
addressed
Can control the pace of the
transaction

14. Drafting the Contract – Where to
Start

15. Drafting the Contract Involves…
Determining what the parties agreed to
Putting those terms into
words

16. Talk to your Client Are there any relevant documents?
What is the deal?
Are there any relevant documents?
Letters or correspondence?
Financial statements? Etc.
Ask detailed questions about
conversations with the other party
Possibly have an initial conversation
with the other party…what do they
believe are the primary deal points?

17. Use of Precedent

18. Use Precedent? Why or Why Not?
Saves Time
Contains Standard Terms
WHY NOT?
Hard to find perfect match
Precedent may be poorly drafted
May not contain necessary Standard
Terms
**Make sure the precedent was the first
draft and does not contain negotiated
terms

19. Use Precedent or Draft from Scratch?
Depends On:
1. Type of Transaction
2. Experience of the Attorney
How much time Attorney
has to draft

20. Prepare the First Draft
Draft based on information you have
Use precedent or draft from scratch
Discuss all questions/issues with client
while drafting to make sure draft mirrors
deal points
Re-draft after speaking with client
Send to client to review and possibly
redraft again before sending to other
party
Always send contract to other party
“subject to review of client”

21. Reviewing First Draft if From the Other Party
Review and have comments/questions
for your client
Review entire contract with Client
Prepare red lined mark-up for other
party
Include reasons for changes if
necessary
Review with other party in meeting or
via phone

22. Exercise #2: Halle Berry Independent Contractor – Use of Precedent
Vukani wants Halle Berry to provide
marketing services in the United
States.
You represent Halle Berry. In groups
of 3, go through the precedent and
make a list of what you would
change prior to sending to Vukani.
We will then discuss your proposed changes in each paragraph as a group.