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Transactional Lawyering
University of Dayton School of Law
Fischer, John A.

 
Trans. Drafting
Prof:    Fischer
Class Notes
 
 
Fri Jan, 8         Introduction to Contract Concepts & the Role of the Transactional Lawyer
Read: Stark, Chapters 1-4 (pp. 3-44), Chapter 32, pp. 505-512 (including margin notes)
 
As the lawyer we want both parties to feel like they have won, often the parties will be working together in the future and forming a hostile relationship from the onset is not desirable
 
Contract Building Blocks
A K = an agreement between 2 parties
Commercial Contract = a K between parties for a business purpose
                As opposed to a consumer K = K binding a consumer and the supplier of goods/services
                A-symmetrical bargaining power is becoming a hallmark of Commercial Contracts
 
K law provides protection in the event that things go wrong and reduce likelihood of fraud
 
Imposing duties/forbearance on parties to a K
                Duty = must act
                Forbearance = must not do X
This can be achieved through warranties/covenants/rights/conditionsà CONSEQUENCS
 
 
Contract Causes of Action MASTER THESE BITCHES
1.       Covenants/Rights
a.        Covenant = promise to do or not to do something à duty to perform
                                                               i.      SHALL à covenant à when to use if a party’s name does not precede shall à shall = wrong
                                                                                                                                       i.      The exterior of the premises shall be maintained by the LL
1.       The LL shall maintain the exterior of the premises
                                                                                                                                      ii.      An action to enforce this Agreement shall be permitted to be filed in the Ohio SC
1.       Each part shall file an action to enforce this Agreement in the Ohio SC
                                                                                                                                    iii.      The arbitrators shall render a decision promptly
1.       shall is wrong b/c arbiters =/= party
                                                              ii.      Difference between will and shall à will denotes something that will happen in the future
                                                                                                                                       i.      The Car shall maintain itself in good condition until Closing
1.       The Car =/= a party to K
                                                                                                                                      ii.      The Closing will take place on Sept 1, 2016
1.       The use of WILL = correct b/c closing = future event
                                                                                                                                    iii.      Buyer will pay seller $10K for the Car
1.       b/c this is a covenant à use shall
                                                                                                                                    iv.      The Seller’s Mechanic shall certify that the Car is in Good Condition
1.       Trying to bind a non-party
                                                                                                                                      v.      The Seller will provide the Buyer w/ the Car’s owner’s manual w/in 2 wks of delivery of the Car to the Buyer
1.       b/c this = covenant à use Shall as mandatory lang.
2.       FOR GOD SAKE AVOID
a.        Is responsible for
b.       Agrees to
c.        Will
d.       Must
e.       Promises to
f.         Should
g.        Is entitled to
b.       Right = a party’s entitlement to the other party’s performance of a covenant. A right = flip side of covenant
c.        Party A has a duty à Party B has the right/benefit of party A’s non-/performance
                                                               i.      We will draft duties NOT rights
2.       Representations & Warranties
a.        Warranty = a promise that if the statement in the representation is false, the maker of the statement will indemnify the other party for any dmgs suffered b/c of false statement
b.       Representation = statement of fact as of a moment in time intended to induce reliance  
3.       Conditions Precedent
a.         
4.       Statements of discretionary authority
5.       Declarations = definition or a policy
 
Draft in the active voice in order to assign responsibility; SUBJECT, VERB, OBJECT
                Example:                “The Tennant shall keep the Premises in good repair.”
Passive =                The Premises (object) shall be kept (verb) in good repair by the Tenant (subject)
At the Closing, the Buyer shall be provided with $5,000 by the Seller as the Initial Down Payment on the Purchase Price for the Car.
At the Closing, the Seller shall pay the Buyer $5,000 as the Initial Down Payment on the Purchase Price for the Car.
                                We have drafted the duty and added the ACTIVE VOICE
 
Prior to the Move-In Date, the LL shall put a new lock on the Tenant’s back door
                Word choice, but yes this is in active voice (change PUT à install)
 
The Property shall be insured.
                Shall rule who is shall binding?  à The Tennant shall insure the property
 
To satisfy the notice requirement, a delivery method approved by the LL must be used.
Passive (be used)  “To satisfy the notice requirement the tenant shall use a delivery method approved by
  the LL.”
 
The Seller shall deliver the Car to the Buyer on the Delivery Date.
                Correct
 
Remedies for Breach of Covenant
1.       Remedies at law
a.        $
2.       Remedies at equity
a.        Specific performance
 
Representations and Warranties
Warranty = a promise that if the statement in the representation is fals

the buyer’s residence.
                Therefore Buyer can either:                                                             the buyer cannot perform another action
                                A: Deliver the car to the exhibit
                                B: Require the Seller to pick the car up at the Buyer’s rez
 
EXAMPLE: If the Mechanic’s Inspection reveals that the Car needs significant work to restore it to Good Condition, then the Seller may pay the Mechanic to perform the work prior to the Closing or reduce the Purchase Price by the amount of the Mechanic’s estimated costs to restore the Car to Good Condition
 
Declarations
The parties agree to a statement of fact
The fact is established for purposes of the contract and, generally, a party cannot dispute the fact
 
EXAMPLE: Neither party has stated the fact to induce the other party to act.  A party cannot sue on a declaration.  No rights or remedies are associated with it. 
                In other words, no party can sue on a Declaration
 
EXAMPLE:  “Mechanic” means a skilled worker whose primary duty is to inspect, diagnose, and repair automobiles.
                This declaration is a definition
EXAMPLE: This agreement is governed by Ohio law.
                Always a good agreement to have.
 
 
Building blocks =
1.       Covenants
a.        shall
2.       Representations and warranties
a.        Represents and warrants
3.       Conditions precedent
a.        If/then + verb construction or must
4.       Discretionary authority
a.        May
5.       Declarations
a.        Definitions or other verb for different type of declaration
 
Build a K by translating the terms of the deal into the K concepts
 
Covenant = promise to do/not do something creates a duty to perform
Right = the flip side of covenant. A right entitles a party to the other’s performance
Representation and Warrantee =  a promise that if the statement in the representation is false, the maker of the statement will indemnify the other party for any dmgs suffered b/c of false statement
Representation = statement of fact as of a moment in time intended to induce reliance
Conditions precedent =a state of facts that must exist b4 the party is obligated to perform
Discretionary authority gives the party a choice or permission to act sometimes it is discretionary
Declaration = fact to which both parties agree