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2023 Business Drafting Workshop: LLCs
Reps and Warranties | Breach, Remedies, and Dispute Resolution | Conditions, Discretionary Authority, & Declarations | Annotated Covenants
Contract Drafting Building Blocks: Reps and Warranties
Sample Stock and Goodwill Purchase Agreement
Contract Drafting Building Blocks: Breach, Remedies, and Dispute Resolution
I often describe contract drafting as a “creative process.” A statement that has drawn unbelieving looks from many past students. But drafting a contract presents the opportunity to create a private body of law between two or more parties. That private body of law, along with any other applicable statutes, regulations, and common law, dictate how the parties will work together to achieve some common goal. To draft that document appropriately and in a way that helps the parties reach the goal, the lawyer has to think through the process of each party’s performance – the who, what, when, where, and how of each obligation, condition, or discretionary action. Once that process is complete, the lawyer drafts those obligations, conditions, and discretionary actions in a way that memorializes the parties’ intentions. I have also often told students that a major perk of a transactional practice (for me at least)is that your clients are typically happy to be working with you. They haven’t hired you because they are fighting with someone or at the beginning stages of litigation. Instead, the client is embarking on a new deal or relationship. Very often, one that brings sought-after potential and opportunity for the client. And in this situation, they are happy to have you on board.However, while we prefer to focus on the positive aspects of the transaction, we also know that part of that creative process includes consideration of what can go wrong. It is inevitable that a percentage (hopefully a very, very small percentage) of contracts we draft will end up in some type of dispute or litigation. Relationships go south or economic circumstances change for the parties, and the contract should address those potential situations. We have to think through what constitutes a default, when is termination of the agreement allowed, what are the consequences of that termination (both monetary and nonmonetary), and what are the remedies the parties may seek– specific, common law, or both.
Contract Drafting Building Blocks: Conditions, Discretionary Authority, & Declarations
Sample Stock and Goodwill Purchase Agreement
Annotated Covenants
Set forth below is a typical covenants section that would appear in a stock purchase agreement. Note that these covenants assume that defined terms are set forth in the rest of the agreement.
Contract Drafting
This paper is comprised of excerpts from Waks, Whitlock, Texas Practice Guide—Business Transactions,Chapter 1, Contracts (Thompson Reuters, 2022). Section references are to the particular section from the Chapter where the excerpted material is located.
The Miscellaneous Section of a Contract
In this day of computers, forms, electronic drafting assistants, and Google searches, very few if any attorneys start a contract from scratch each time. This paper presents certain issues that can arise in connection with the miscellaneous sections of a contract from a trial attorneys’ perspective. What are some of the red flags for when the miscellaneous sections of a contract should be treated as “deal points” and when are they just “belt and suspenders”? When are these clauses merely boilerplate, and require no variation from the prior version, form or sample used?
How To Interpret a Complex Business Contract
The purpose of this paper is to suggest a methodology for interpreting a complex business contract (or any contract, for that matter) by interpreting it as a whole, rather than solely by seizing upon certain language within the contract. This paper assumes that the reader has from law school and legal practice become familiar with basic principles of contract formation, drafting and interpretation. An easy-to-read and excellent resource book on these topics is Charles M. Fox, WORKING WITH CONTRACTS: WHAT LAW SCHOOL DOESN’T TEACH YOU (Practicing Law Institute (2nd ed. 2008), available inexpensively at Amazon.com and from numerous other sources. The author illustrates the process by reference to a hypothetical, complex business transaction in which an existing contract places many restrictions on the ability of a party to that contract to do other transactions (directly or through its subsidiaries), including the hypothetical transaction. The task is to identify the salient contractual provisions in the existing, restrictive contract, interpret it as a whole, and reach conclusions regarding the intent of the parties to the restrictive contract. The purpose of the task is to determine whether or not a proposed new transaction would be permitted.
Business Drafting To Maintain the Separate Property of the Involved Entities
Any attorney assisting his or her client with estate planning documents needs to be aware of the potentially hidden land mines associated with marital property issues. This is particularly true because divorce professionals often find themselves unraveling, or attempting to unravel, a myriad of trusts and entities formed by clients with the help of their estate planning attorneys. This paper addresses the marital property issues that can arise in various estate planning documents and also describes some of the challenges that divorce professionals may make to trusts and entities and how to limit the effectiveness of those challenges.