1. Jack Friery UCSD Extension © 2007 1 Jack Friery

2. Groucho: "That's in every contract, that's what you call a sanity clause." Chico: "You can't a fool-a me. There ain't no sanity clause --Groucho and Chico Marx in A Night at the Opera (Movie) © 2007 Jack Friery 2

3. "The party of the first part..." is hereinafter called: "the party of the first part..." and "The party of the second part..." is hereinafter called: "the party of the second part... --Groucho and Chico Marx in A Night at the Opera © 2007 Jack Friery 3

4. Read and interpret the contract as a whole Dont throw anything out Give ambiguous terms their reasonable and effective meaning Ordinary termsordinary meaning Technical termstechnical meaning Trade practice & prior dealings may interpret Common sense is part of the contract © 2007 Jack Friery 4

5. Order of preference if necessary: Negotiated terms over standardized terms Specific terms over general terms Written over typewritten terms Typewritten over pre-printed terms Contra proferentem if all else fails: Interpret against the drafter © 2007 Jack Friery 5

6. Description of the parties Whereas clauses Defined terms & definitions Capitalize defined terms Be consistent with terms Effective date © 2007 Jack Friery 6

7. Anti-assignment Indemnity Covered events (Negligence? Intentional acts?) Proportion Cap on liability Severability clause © 2007 Jack Friery 7

8. Choice of law Disputes process Preliminary negotiation? Establish time limit. Mediation? Arbitration? Where? Process? Binding or non-binding © 2007 Jack Friery 8

9. Warranty Duration, notice, warranted events, remedies Only modify in writing Publicity & disclosure Breach & remedies Consequential damages? © 2007 Jack Friery 9

10. Termination & duration Force majeure Survival provision (proprietary data, disputes) Integration clause © 2007 Jack Friery 10

11. © 2007 Jack Friery 11