Search results
41 results
Sort by:
Contract Drafting
This article is a short but comprehensive guide into all aspects of contract drafting.
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.
Dealing with Drafting Deadlocks
Two of your law school classmates decide to form a company, and it sounds great. Bill and Paul have the same business idea – making custom pet bandanas and selling them at the farmers market every Saturday. They both put the same amount of money into the business, and launched their little pet accessory business as an LLC. You hear bits and pieces through the school newsletter, but it seems they are doing really well selling at the Redmond farmer’s market. Next thing you know, Bill wants to start selling at the Seattle Sunday farmers market, just a little way away. However, you hear that Paul doesn’t want to drive that far and has blocked Bill’s decision. It is a 50/50 company, and Bill and Paul agreed to make decisions about the business together even though they never wrote out a formal agreement. Without Paul’s consent, the business can’t expand to Seattle, and stylish pets in the urban oasis may need to go without the latest in Kraken accessories.For Bill and Paul, foregoing an LLC Operating Agreement sounded like a good idea at formation – they couldn’t imagine ever disagreeing about how to run the business! - but now that Paul vetoed Bill’s business decision, bandanas have piled up because Bill can’t sell at the Sunday market. Bill could make a lot more money from selling at the other market, and the workers he hired to make the extra bandanas and collars (he expanded production to collars without Paul’s consent) need to be paid. This is a problem.It's a good thing you also went to law school with Bill and Paul, and even better that you did pretty well in your Business Entities class and went to work in Delaware after graduation.
Drafting & Negotiating Complex Commercial Agreements
Supply chain disruptions have taken center stage in the news cycle in the wake of the COVID-19 pandemic, bringing commercial agreements into the international spotlight. In this volatile commercial environment, attorneys have a unique opportunity to bring order to chaos by providing valuable legal insight into their clients’ procurement and supply chain relationships. This article identifies several key considerations for drafting and negotiating complex commercial agreements specifically through the lens of potential supply chain issues. For simplicity’s sake, this article focuses primarily on customers and suppliers, but attorneys should also pay close attention to the various other parties in the overall supply chain network, such as raw materials providers, distributors, resellers, and logistics and warehousing providers. Generally, the party purchasing goods or services is referred to as the “customer” and the party providing goods or services is referred to as the “supplier” throughout this article, but other defined terms may be a better fit for different types of agreements (e.g., “Client” or “Purchaser” may be used for the party purchasing goods or services, and “Service Provider” or “Seller” may be used for the party providing goods or services). This article does not contain an exhaustive list of provisions that should be included in a commercial agreement. Complex commercial agreements are just that – complex! – and should be specifically tailored to the business arrangement between the parties. However, the standard elements addressed in this article should generally apply across a variety of types of agreements.
Boilerplate Provisions
Black’s Law Dictionary defines “Boilerplate” as: “Language which is used commonly in documents having the same meaning; used to describe standard language in a legal document that is identical in instruments of a like nature.” Boilerplate language certainly serves a purpose to reduce transaction costs and avoid protracted negotiation over what, in many instances, are standard terms. But, too often, lawyers rely on this common usage of the term “boilerplate” when examining, or rather glossing over, relatively customary contractual provisions such as recitals, statements of consideration, and the ever-dangerous miscellaneous section. Like other contractual provisions, mere reliance on form boilerplate provisions can yield unintended and often unfavorable results. Therefore, attorneys are cautioned to review these provisions with the same care as they would review the remaining terms of a given contract.
Drafting Contracts to Avoid Ambiguity
This paper will discuss the nature of ambiguous provisions in contracts, how the courts perceive and dispose of them, and, most importantly, some tips on how to avoid common ambiguities in contract drafting. There are many stylistic imperatives to avoiding ambiguities, from the use of simple language in contracts to the reorganization of sentence structure. This article will focus on specific legal issues that arise in contracts that are particularly susceptible to ambiguities and the attention and adjustments lawyers can make to resolve them.
When is a Forfeiture Clause a Non-Compete?
For Texas lawyers who draft non-competes for employers, there are two essential things to remember. First, putting the non-compete in the form of a forfeiture clause won’t necessarily avoid the requirements of the non-compete statute. Second, regardless of what you call it, it is unlikely that a Texas court will enforce a forfeiture clause that functions as an unreasonably broad non-compete. So you might as well make the scope of the discouraged competition reasonable.
It's Not Safe Out There: Consideration of Contract Terms that Avoid or Limit Liability and Legal Expense
This is the PowerPoint slide deck for the presentation.
Letters of Intent
It is important for an attorney to understand the legal and other ramifications of negotiating and drafting an LOI, and to counsel his or her clients on the impact of those ramifications on the transaction.
Boilerplate Provisions
Black’s Law Dictionary defines “Boilerplate” as: Language which is used commonly in documents having the same meaning; used to describe standard language in a legal document that is identical in instruments of a like nature. (9th ed. 2009). Boilerplate language certainly serves a purpose to reduce transaction costs and avoid protracted negotiation over what, in many instances, are standard terms. But, too often, lawyers rely on this common usage of the term “boilerplate” when examining, or rather glossing over, relatively customary contractual provisions such as recitals, statements of consideration and the ever-dangerous miscellaneous section. Like other contractual provisions, mere reliance on form boilerplate provisions can yield unintended and often unfavorable results. Therefore, attorneys are cautioned to review these provisions with the same care as they would review the remaining terms of a given contract.
The Seven Deadly Sins of Boilerplate: "Cut and Paste Can Get You Sued"
The focus of this article will be upon seven boilerplate provisions that can present significant difficulties for the practitioner. Those “standard” sections at the end of a contract may look like the same provisions you have seen in hundreds of contracts, but those tried and true, cut and pasted provisions often create, rather than resolve, problems. The fallout from improperly drafted (and typically neglected) boilerplate provisions, can determine the enforceability of a contract, the value to be received, and the remedies available to the parties.
Drafting and Enforcing Complex Indemnificaion Provisions
The purpose of this article is to assist transactional and litigation attorneys negotiate and draft customized, and therefore more effective, indemnification provisions in a wide range of situations, and also to spot certain litigation issues that may arise out of indemnification provisions. This article will identify issues and provide the strategies and suggested language that can act as a starting point to protect the client’s interests in the area of the duty to defend, advancement of defense expenses and indemnification in complex transactions and litigation. This is not a survey of the substantive law of indemnification in every state and federal jurisdiction. While selected published opinions will be mentioned and occasionally discussed, this article will not focus on case law. Instead, the article is intended to be a practical guide that illustrates real-world strategies, tactics and techniques to be used when negotiating and enforcing defense, advancement and indemnification provisions.
Non-Compete Non-Solicit Breach of Fiduciary Duties
This article is a set of cases that examine various aspects of non-competition clauses in agreements, non-solicitation, and breaches of fiduciary duties.
Drafting Contracts (and Everything Else) to Avoid Ambiguity
This paper is so brief a collection of ideas about drafting contracts that it really constitutes little more than a random collection of personal pet peeves. In applying these suggestions, remember that rules – at least many of them – were made to be broken.
7 Deadly Sins of Boilerplate: How Cut-and-Paste Can Get You Sued
Those “standard” sections at the end of a contract may look like the same provisions you have seen in hundreds of contracts. But those tried and true, cut and pasted, provisions can often create, rather than resolve, problems. The fallout from improperly drafted (and typically neglected) boilerplate provisions can determine the enforceability of a contract, the value to be received by a party, and the remedies available to the parties.
General Contract Provisions
This article provides an overview of certain general contract provisions typically included in a purchase agreement entered into in connection with an acquisition or disposition transaction. First, it will discuss the indemnification obligations of the parties in such a transaction. Next, it will address the choice of law and choice of jurisdiction provisions that the parties can include in the purchase agreement and the implications of each such provision. After that, the article will analyze the dispute resolution alternatives that the parties can choose to include in the purchase agreement. Finally, the article will provide an overview of representation and warranty insurance, which can be purchased by a party to the transaction.
Serving Your Clients After the Deal: Drafting Tips from a Litigator to Transactional Lawyers
Complex transactions are documented as a transaction is set to begin, when the parties are optimistic and cooperative. Almost all complex transactions will include clauses that relate to dispute resolution, a concept that may be obscured by the wave of optimism. Often, these kinds of clauses are an afterthought to the dealmakers (your client and the counter-parties). And after you have spent countless hours drafting the “real” substance of the transaction documents, you may be inclined to use boilerplate language to round out the documents. But thoughtful and careful drafting of language related to dispute resolution will save your clients time, money, and anxiety if the deal goes awry, which will enhance the likelihood that the client returns to you to advise on the next transaction. In this article, I will discuss how you can serve your clients’ interests by giving sound advice regarding arbitration, jurisdiction, choice of law, attorney’s fees, and other issues that are sure to arise if a once-promising transaction gives rise to actionable legal disputes.
The (Surprising Complex) Art of Drafting Arbitration Clauses
Parties often view arbitration as a concept distinct from litigation. For commercial disputes, however, arbitration and litigation have several similarities. Each is a form of dispute resolution; each employs a neutral person to resolve differences, whether factual or legal; each depends upon rules that are (generally) developed before the dispute arises. And when all is said and done, at least one party is going to be unhappy with the result because, like litigation, arbitration is a zero-sum game: at the end of the day someone loses. But there are differences. Despite the increasing frequency with which parties contract to arbitrate their potential disputes, rather than litigate them, parties rarely give sufficient consideration to how that arbitration will work. Their image of arbitration as a non-litigation panacea that will save time and money in the event of future disputes is often shattered when they realize that they put too little thought into how to shape resolution of those future disputes. That lack of planning often causes arbitration to cost more than, and take longer than, the default litigation would have required. In arbitration, parties lose many of the procedural safeguards provided by the judicial process. See, e.g. Glazer’s Wholesale Distr. v. Heineken USA, Inc., 95 S.W.3d 286 (Tex. App.—Dallas 2001), judg’t vacated and remanded by agreement (Tex. July 3, 2003). This paper will provide an overview of the law of arbitration and identify some considerations for attorneys who counsel clients about whether arbitration might be an appropriate dispute resolution vehicle for their relationship and how to shape their arbitration framework. It will also discuss special considerations for the drafter of an arbitration clause when the parties’ transaction is international.
Construction Clauses and Presumptions in Business Agreements
All of us want to prepare clear, accurate and complete agreements for our clients. Understanding a bit more about the construction of agreements under Texas common law may help us do so and may also help our clients avoid disputes. The use of Construction Clauses – relatively standard “miscellaneous” clauses in our agreements – may help us and our clients accomplish these goals.
Checkmate: Early Moves Define Negotiation Outcomes
Chess while grandmasters a match may report last hours, that, the board is set in the first few moves. Players send strategic signals early and then work for hours to implement their plan while taking account of, but not being controlled by, their opponent’s moves. They relentlessly run their plan. Effective negotiators also send strong strategic signals in their first few moves. Since litigators are used to weaving simple stories from complex- ity and constantly threading evidence through the ultimate questions for the fact finder, they are already experts at strategic planning. Those skills are the grist of a successful negotiation. The question is whether, through research, we can draw insights about negotiation strategies that can help lawyers add value for their clients in real time.