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Business Transactions Drafting
West Virginia University School of Law
Cowan, Barton Z.

Bus Trans Draft Jan 9, 2007

Consider the linguistics and non-linguistics aspects of drafting
Knowing the audience for whom the doc is intended
Goal as a drafter is to produce precise non ambiguous docs – docs that will be understandable to the audience. Both to the att’y and the lay person.
K precision – accurate, complete (address all reasonable), exact (contains no ambiguity)

FIVE CHARACTERISTICS THAT LEGAL WRITING SHOULD POSSESS:

Accuracy
Clarity
Concision
Simplicity
Tone

The role of a K commercial lawyer is different from the role of a litigator, b/c all commercial transaction involves 2 parties trying to reach a common goal. The thought process of a commercial att’y differs from that of a litigator.

Recommended Book to buy for this class – A Manual of Style for K Drafting: Kenneth A. Adams

Page 145 Exercise 3 – ltr from old college roommate about cousin who made promise

Charlie’s ultimate objective is to get Lucinda to stop moving the ball whenever he is about to kick the ball.

Chapter 1
Important pt is the 5 characteristics

The Use of Plain English: some regulations that requires plain English, some states require this in insurance policies, in NY it requires this in ever contract (using words of common and everyday meaning), SEC adopted a plain English rule (must not contain any legal jargon)

****Good Legal Writing is Writing in Plain English****

Jan 11, 2007
Exercises 1 and 2 are due next Tuesday Jan 16, 2007

Basic form of a K doc:

Title – ALL CAPS, in center of page, identify type of K, no more than 3 words
Intro Paragraph – introduces the parties and date of agreement, identifies the title of agreement. It is not numbered.

This confidentiality agreement (“agreement”) dated June 12, 1995, between Cooper Inc, incorporated in Delaware with its principal place of business in NYC at 1313 mockingbird lane, NY, NY and James Smith(“Smith”), an individual, at 1212 Bluebird lane, Bklyn, NY

Recitals (Backgrounds) – “WHEREAS” clauses don’t use whereas. Some K but not all uses this.

Facts that will help reader understand and grasp the nature of the transaction, .be sure your recital are accurate. Avoid the temptation to recite everything. This should be brief.
Each recital should be written in plain English
You should put a letter or number before each recital. Prof prefers letters

Transition Clause – “The Parties Agree” “The Parties Agree as Follows” only time in the K where you need to say the parties agree, there is no reason to keep saying the parties agree.
Definition – Most lawyers put this a section one of the K, after the transition clause, not every K need definition clause
Core Substance Provisions – Seller sales to Buyer, and Buyer purchases from Seller 10K widgets
Representations, Warranties, Guarantees, Covenants
Events of Default and Remedies
Boiler Plate – Notices, Governing Law
Transitions K
Signature Block

a. General provisions come before specific provisions

Rules in K come before exceptions
Every concept needs a separate section or subsection
When you are drafting from scratch your agreement has to be based upon the legal principles and needs of your client.

List the facts and points that need to be in the contract,
next outline what the K might look like rearranging what you have already written,
next evaluate you have properly presented the matters that outline to position of each party,
look to make sure you have the key points of the transaction (try to see if you have properly captured the parties objectives)
call the client to see if they have any additional input
then draft the doc, set it aside a day or two, get away from your first draft
carefully review then send it to the client, sometimes (but you want to avoid this) you want to send it to opposing counsel (include a note stating that this draft has not been approved by your client)
almost always to your client advantage to prepare the first draft, that way the items that your client considers important will be worded most favorably in your client favor
in most cases if the other side prepare the first draft they will not focus on all the important items nor will they focus on your client’s best interest.

i. When you do the 1st draft don’t create a doc that is so one sided that you lose the deal for your client

sin in K drafting, it leads to law suits.

Vague – when the meaning of a word is fuzzy you cannot precisely determine it. Has some advantages as a drafting technique.

In this situation with Charlie and Lucinda vagueness can be a problem

Abstract v. concrete
Abstract concepts cautionly b/c they tend to be vague
You have to develop an organization for the K

Division – organization is very important, your sub-classes all have to add up to a single class, it is a fundamental intellectual tool.
Classification – where you put things
Sequence – putting things in the right order

If you have a K that is poorly organized it is going to be very difficult to understand, it will become an obstacle, the K will not be user friendly.

If both parties are going to be making considerations than you can have sections that tells Lucinda’s duties and Charlie’s duties. The boiler plate provisions will come to the end

What are the steps
Determine the objectives that the client wants: What does the client want to establish
Try to understand the broader factual and legal concept in which this
Identify Audience
Research the law
Determine what should be in the K, get the necessary facts
Conceptualize the facts
Organization

Exercise 1
Location of Business – delivered to business on date and at time.
This offer may be accepted only in a signed writing, delivered

Exercise 2
FAA (Federal Arbitration Act) govern arbitration
Don’t draft an arbitration provision unless you know your client wants on
Make sure that your client understands what it means to have this provision and what it means to go to arbitration
Arbitration clause itself will be construed by the arbitrator
An arbitration provision needs to say where the arbitration will be held
Where it can be enforced