contract drafting class 7 tues feb 7 university of houston law center d. c. toedt iii
TRANSCRIPT
![Page 1: Contract Drafting Class 7 Tues Feb 7 University of Houston Law Center D. C. Toedt III](https://reader035.vdocuments.site/reader035/viewer/2022062619/551832bb5503469d318b50b1/html5/thumbnails/1.jpg)
Contract DraftingClass 7Tues Feb 7
University of Houston Law Center
D. C. Toedt III
![Page 2: Contract Drafting Class 7 Tues Feb 7 University of Houston Law Center D. C. Toedt III](https://reader035.vdocuments.site/reader035/viewer/2022062619/551832bb5503469d318b50b1/html5/thumbnails/2.jpg)
In the news …
![Page 3: Contract Drafting Class 7 Tues Feb 7 University of Houston Law Center D. C. Toedt III](https://reader035.vdocuments.site/reader035/viewer/2022062619/551832bb5503469d318b50b1/html5/thumbnails/3.jpg)
Common contract f***-ups
![Page 4: Contract Drafting Class 7 Tues Feb 7 University of Houston Law Center D. C. Toedt III](https://reader035.vdocuments.site/reader035/viewer/2022062619/551832bb5503469d318b50b1/html5/thumbnails/4.jpg)
Common contract f***-ups
“10. The contract that is signed with an illegible signature and no information is given as to who has signed or their position within the organisation.”
[From “Top 10 howlers when preparing contracts for signature,” by the IP Draughts blog at http://goo.gl/Km6Dw.]
![Page 5: Contract Drafting Class 7 Tues Feb 7 University of Houston Law Center D. C. Toedt III](https://reader035.vdocuments.site/reader035/viewer/2022062619/551832bb5503469d318b50b1/html5/thumbnails/5.jpg)
Drafting exercise: Stark 18-5
![Page 6: Contract Drafting Class 7 Tues Feb 7 University of Houston Law Center D. C. Toedt III](https://reader035.vdocuments.site/reader035/viewer/2022062619/551832bb5503469d318b50b1/html5/thumbnails/6.jpg)
Microsoft NDA – general provisions
![Page 7: Contract Drafting Class 7 Tues Feb 7 University of Houston Law Center D. C. Toedt III](https://reader035.vdocuments.site/reader035/viewer/2022062619/551832bb5503469d318b50b1/html5/thumbnails/7.jpg)
Assignment of K – Port of NY & NJ
![Page 8: Contract Drafting Class 7 Tues Feb 7 University of Houston Law Center D. C. Toedt III](https://reader035.vdocuments.site/reader035/viewer/2022062619/551832bb5503469d318b50b1/html5/thumbnails/8.jpg)
Section 4(g) – assignment of K
QUESTION: Are most contracts ordinarily assignable if K doesn’t say otherwise?A. Yes
B. No
C. Yes, with some exceptions IP licenses Special situations (e.g., unique capabilities /
personal trust & confidence)
![Page 9: Contract Drafting Class 7 Tues Feb 7 University of Houston Law Center D. C. Toedt III](https://reader035.vdocuments.site/reader035/viewer/2022062619/551832bb5503469d318b50b1/html5/thumbnails/9.jpg)
Assignment of K (Z&B pp. 23-26)
QUESTION: Why might a party want to restrict the other side’s assignability? (Think of both business reasons and “because I can” reasons.)
![Page 10: Contract Drafting Class 7 Tues Feb 7 University of Houston Law Center D. C. Toedt III](https://reader035.vdocuments.site/reader035/viewer/2022062619/551832bb5503469d318b50b1/html5/thumbnails/10.jpg)
Assignment of K (Z&B pp. 23-26)
QUESTION: Why might a company wantto refuse to agree to an assignment-consent requirement in a draft contract? A. Don’t want to have to get consent to spin off a
division or other future M&A deals
B. Requirement would cause tax problems
C. Might want to move contract rights to affiliate
D. Requirement would cause antitrust problems
![Page 11: Contract Drafting Class 7 Tues Feb 7 University of Houston Law Center D. C. Toedt III](https://reader035.vdocuments.site/reader035/viewer/2022062619/551832bb5503469d318b50b1/html5/thumbnails/11.jpg)
Assignment of K (Z&B pp. 23-26)
QUESTION: Why might a software vendor want its customers to be able to assign their license agreements? Hint: If a customer had to pay a large fee for consent to assign, what might it decide to do instead? Would the vendor’s competitors have anything to “contribute” to the customer’s thinking process?
![Page 12: Contract Drafting Class 7 Tues Feb 7 University of Houston Law Center D. C. Toedt III](https://reader035.vdocuments.site/reader035/viewer/2022062619/551832bb5503469d318b50b1/html5/thumbnails/12.jpg)
Assignment of K (Z&B pp. 23-26)
FACTS: You’re entering into a contract with an agency of the State of New York.
QUESTION: Is there any way around the state-law assignment-consent requirement? Hint: See NY State Finance Law art. 9, § 138
![Page 13: Contract Drafting Class 7 Tues Feb 7 University of Houston Law Center D. C. Toedt III](https://reader035.vdocuments.site/reader035/viewer/2022062619/551832bb5503469d318b50b1/html5/thumbnails/13.jpg)
Assignment of K (Z&B pp. 23-26)
CONTRACT PROVISION: “Customer may not assign this Agreement, including for example by operation of law (for example, as the result of a merger), without Vendor’s prior written consent.”
[Questions follow on subsequent slides]
![Page 14: Contract Drafting Class 7 Tues Feb 7 University of Houston Law Center D. C. Toedt III](https://reader035.vdocuments.site/reader035/viewer/2022062619/551832bb5503469d318b50b1/html5/thumbnails/14.jpg)
Assignment of K (Z&B pp. 23-26)
CONTRACT PROVISION: “Customer may not assign this Agreement, including for example by operation of law (for example, as the result of a merger), without Vendor’s prior written consent.”
QUESTION: If Customer merges with another company without consent, is the merger void?
![Page 15: Contract Drafting Class 7 Tues Feb 7 University of Houston Law Center D. C. Toedt III](https://reader035.vdocuments.site/reader035/viewer/2022062619/551832bb5503469d318b50b1/html5/thumbnails/15.jpg)
Assignment of K (Z&B pp. 23-26)
CONTRACT PROVISION: “Customer may not assign this Agreement, including for example by operation of law (for example, as the result of a merger), without Vendor’s prior written consent.”
QUESTION: What if the contract provision were like Microsoft NDA § 4(g) [Z&B p. 20]?
![Page 16: Contract Drafting Class 7 Tues Feb 7 University of Houston Law Center D. C. Toedt III](https://reader035.vdocuments.site/reader035/viewer/2022062619/551832bb5503469d318b50b1/html5/thumbnails/16.jpg)
Assignment of K (Z&B pp. 23-26)
CONTRACT PROVISION: “Customer may not assign this Agreement, including for example by operation of law (for example, as the result of a merger), without Vendor’s prior written consent.”
QUESTION: What additional language might Customer want to negotiate, and why? (Hint: See the subheading “Assignment with transfer of business assets” at http://goo.gl/26MEx.)
![Page 17: Contract Drafting Class 7 Tues Feb 7 University of Houston Law Center D. C. Toedt III](https://reader035.vdocuments.site/reader035/viewer/2022062619/551832bb5503469d318b50b1/html5/thumbnails/17.jpg)
Third-party beneficiaries (Z&B p. 20 § 4(b); pp. 27-28)
FACTS: 1. Sam signs a contract to sell Betty his car for $2,000. 2. Betty fails to pay. 3. As a result, Sam can’t pay his rent. 4. Sam’s landlord sues Betty as 3PB.
[Questions follow on subsequent slides]
![Page 18: Contract Drafting Class 7 Tues Feb 7 University of Houston Law Center D. C. Toedt III](https://reader035.vdocuments.site/reader035/viewer/2022062619/551832bb5503469d318b50b1/html5/thumbnails/18.jpg)
Third-party beneficiaries (Z&B p. 20 § 4(b); pp. 27-28)
FACTS: 1. Sam signs a contract to sell Betty his car for $2,000. 2. Betty fails to pay. 3. As a result, Sam can’t pay his rent. 4. Sam’s landlord Larry sues Betty as 3PB.
QUESTION: Betty files MSJ - what result?
A. MSJ denied – Larry was a 3PB
B. MSJ deferred for further discovery
C. Betty wins – Larry was only incidental 3PB
![Page 19: Contract Drafting Class 7 Tues Feb 7 University of Houston Law Center D. C. Toedt III](https://reader035.vdocuments.site/reader035/viewer/2022062619/551832bb5503469d318b50b1/html5/thumbnails/19.jpg)
Third-party beneficiaries (Z&B p. 20 § 4(b); pp. 27-28)
FACTS: 1. Sam signs a contract to sell Betty his car for $2,000. 2. Betty fails to pay. 3. As a result, Sam can’t pay his rent. 4. Sam’s landlord Larry sues Betty as 3PB.
QUESTION: What result if K said “Betty will pay $500 to Larry to take care of Sam’s back rent and the remaining $1,500 to Sam ….”?
![Page 20: Contract Drafting Class 7 Tues Feb 7 University of Houston Law Center D. C. Toedt III](https://reader035.vdocuments.site/reader035/viewer/2022062619/551832bb5503469d318b50b1/html5/thumbnails/20.jpg)
Review: No-oral-modification provisions (Z&B pp. 70-71)QUESTION: In a contract under NY law for the sale of 1,000 widgets, will a court enforce a no-oral-modification provision?
A. No – past contract can’t prevent parties from agreeing to an amendment
B. Yes – NY statute expressly validates
C. Maybe, if no proof of estoppel
![Page 21: Contract Drafting Class 7 Tues Feb 7 University of Houston Law Center D. C. Toedt III](https://reader035.vdocuments.site/reader035/viewer/2022062619/551832bb5503469d318b50b1/html5/thumbnails/21.jpg)
Review: Signature line
How would the signature block for Microsoft be written?
![Page 22: Contract Drafting Class 7 Tues Feb 7 University of Houston Law Center D. C. Toedt III](https://reader035.vdocuments.site/reader035/viewer/2022062619/551832bb5503469d318b50b1/html5/thumbnails/22.jpg)
End of class