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Contract Drafting
University of Pennsylvania School of Law
Barr, Sharon

 
Contract Drafting _ Sharon Barr_ 2017 Spring



Car exercise
Buyer:
What else – the condition of the car; delivery (registration, licence, insurance); feature of the car
liability
Accident happen to the car before
Any lense on the car before (mortgage only applies to real estate)
Check if the car meet the description of the seller
Seller:
Payment method (bank loan —> credibility
Damages if payment is not meet, prepay
If there is any warranty the buyer want (a written guarantee, issued to the purchaser of an article by its manufacturer, promising to repair or replace it if necessary within a specified period of time)
WARRANTY

What is the market rate of the car → negotiation
If you are seller, what you want to represent the car? As little as possible; while buyers want manufacturing representation etc. information
Instalment deal – seller is on the weaker part (the seller give, then the buyer leave)
Don’t transfer money before the final deal, always have the money when the deal breaks out
Remedy: either in the contract or in the law such as in lease or consumer protection

Contract concept:
Representation and warranty- statement of facts (age, features etc.) + a representation that receiver is relying on e.g the buyer saw the car but find out the deal says a car with another color [representation is facts, warranty is saying what you said is true] Warranty: [ different from warranty in consumer protection concept] > Technical definition: a promise that a statement is true
> Real world definition: a promise that the maker of a statement will pay damages to the recipient of the statement if the statement isn’t true and the recipient suffers damages
>There is no reliance component
Representation
> statement of fact at the moment in time
>intended to cause reliance (justifiable reliance is required for a cause of action)
Covenant – promise to pay and deliver goods
E.g the seller shall not do anything to the car prior to delivery
When drafting, always think of what remedy if covenant is broken
Right – flip side of the covenant which create obligations on the party
In drafting, focus more on covenant than right — the tenant has a right to —> the landlord shall
Discretionary authority – optional, “may”- if one party is harmed by the contract, he/she may do .. [remedy] Either party may terminate the Agreement at any time…
Conditions to an obligation and the obligation[conditions before obligation arises: asking the landlord to paint before you pay the rent] Condition to discretionary authority and the discretionary authority
Condition to a declaration and the declaration
Declaration: statement of policy or statement of background that does not crea
Definitions: “Purchase Price” means $200,000
Definition kicked into action: The Buyer shall pay the Seller the Purchase Price at the Closing
Law of Ohio govern all matters arising under or relating to this Agreement, including torts.

Part of an Agreement (decoration):
Preamble: title, parties, and date
Recitals: background to the contract
Reciprocal promises: pro

means war, flood …” for the performing party. Thus if your client is performing party, you might argue to define the term in this way to allow room for arguments] Force Majeure Event is exclude performance
When deadline are critical, there will be widely discussed force majeure event.

[Definition of terms shall be put after words of agreement. In longer contract, may be put separately in another document ]it is not advisible to put into a sentence like Seller possesses technical information and know-how relating to the production and manufacture of food products which look similar to the thin, crispy crust of “french bread” from which the dough has been removed (the “Products”)… Here it is not clear where “product” refer to.
[list the defined terms alphabetically]
[shall is used only between parties since it creates obligations. If a definition is equal to its meaning, uses means e.g: “Mechanical Failure” means..
If a definition includes its meaning, uses includes (think through whether any exclusions are appropriate” e.g. “Breach” includes a cross-default. Opposite: excludes

Choose an appropriate word e.g: E-book for electronic books, not just books.

Do not put definition within definition better to put them separately.