Real World Document Drafting - A Dispute-Avoidance Approach
Chapter One
Introduction • Description of Subject Matter • Authority References in this Book • Perpetuation of Legal Form • Adversarial Aspects of Transactional Document Drafting • How Lawyers Read Documents • Structure, Purpose and Use of This Book • Negotiation Component
Chapter Two
Preliminary Considerations • Who Is Your Client? • Understanding the Deal and Your Client's Goals and Perspective • Letters of Intent, Memoranda of Understanding and Term Sheets • Related Documents • Preparation of First Draft: Control of Drafting Process • First Draft Advantages • Reasons Not to Prepare First Draft • Responses to Initial Draft Received from Other Side • Sources of Forms • Transaction Phases • Confidentiality Agreements • Check Lists • Drafting Economics: Precision Is Not Cheap • Incorporation by Reference and by Presumption • Format and Organization of Document • Date of Document • Identification of Parties • Recitals • Headings • Legalese • Definitions • Paragraph and Section Direct and Cross-References • Standard Rules of Construction • Formal Requirement • Internal Consistency • Say What You Mean and Mean What You Say • Retention of Drafts in Progress • Significance of Negotiation History • Document Appearance • Counterparts • Schedules and Exhibits • Describing Time Periods• Good Drafting Practices • Review and Editing • Use of Litigated Provisions • Use of Latin and Foreign Words and Expressions • Use of Word-Processing Programs • Amendments • Dealing with Remote Risks
Chapter Three
Ambiguities • What Is an Ambiguity? • Types of Ambiguities • Joint or Several Use of Conjunction “And” • Resolution of Ambiguities • Words and Phrases to Avoid • Additional Limitations • Misplaced Phrases • Adverbs, Adjectives and Transitive Verbs • Prepositions • Conjunctive-Disjunctive Confusion: “And/Or” • Singular v. Plural: Ambiguous Plurals • Active v. Passive Voice • Intentional Vagueness • Punctuation • Contra Proferentem: Ambiguities Interpreted Against Drafter • Specific Words and Terms
Chapter Four
Litigation Issues and Traps • Formal Requirements for an Enforceable Contract • Contract Construction and Interpretation • Explicit Provision for Best Efforts or Other Levels of Performance • Good Faith and Fair Dealing • Integration (Merger) Provisions: Post-Execution Oral Modifications • Best Evidence: Admissibility of Facsimile Copies • Contracts of Adhesion • Unconscionability • Illegality • “No Default” Conditions • Closing Conditions • Conditions v. Obligations: Conditions Precedent • Forfeiture • Is There an Obligation to Negotiate in Good Faith? • Statute of Frauds • Expressio Unius Est Exclusio Alterius: Limitation v. Illustration • Ejusdem Generis: Confusing Specific with General • Strict v. Liberal Construction • Use of Different Phrases to Convey Identical Concept • Handwritten v. Typed Provisions • Typed v. Printed Provisions • Rule of Last Antecedent • Rule of Adopting Construction That Favors Validity • Contra Proferentem: Ambiguities Interpreted Against Drafter • UCC Article 2 • Performance Standards • Substantial Performance • Illusory Contracts
Chapter Five
Achieving Clarity • Words and Expressions to Avoid • Use of “Aforesaid,” “Hereinafter,” “Hereby,” “Hereof” and “Herein” • “Forthwith" • “Terms and Conditions” • “Because” • “Willful” • “Said” • “Up To” • “Any,” “Every” and “A” • “With Cause,” “For Cause” Or “For Reasonable Cause” • Couplets: Repetition • Avoidance of Run-on Sentences • Use of Word “Shall”: Discretionary or Mandatory • Use of Term “So Long As” • Flexible Words and Phrases • Legal Words and Terms of Art • Compound Prepositions
Chapter Six
Defaults and Remedies: Forfeitures • Need for Declaration of Default • Notice of Default With Opportunity to Cure; • Structure of Default Provisions • After Notice Failure to Cure Breach Ripens • into “Event of Default” • Exercise of Specified Remedies Subject To Notice • and Opportunity to Cure • How Is Notice of Default to Be Sent? • Actual Receipt Requirement • Exclusive Method Provisions • Presumption of Delivery and Proof of Delivery • Use of Facsimile Delivery • Electronic Tracking of Delivery • Return Address on Envelope • Residential Delivery Concerns • Multiple Notices • Contents of Notice • Notice Given by Third Party • Issues Regarding Notice and Cure Provisions • The Yellowstone Situation • Protection of Defaulting Party • Notice Formalities • The “Incurable Default” • Cumulative Remedies and Doctrine of Limitation of Remedies • Background • Drafting Approaches - Cumulative Remedy Provisions • Specific and Substitutional Remedies • General Damages • Incidental Damages • Consequential or Special Damages • Background • Drafting Approaches • Punitive Damages • Liquidated Damages • Background • Drafting Approaches for Liquidated Damages • Additional Remedies
Chapter Seven
Boilerplate and Other Specific Provisions • What Is Boilerplate? • Defaults and Remedies: Forfeitures • Time of the Essence • Severability • Force Majeure • Termination and Renewal • Alternative Dispute Resolution • Choice of Law and of Venue • “Conditions” v. “Covenants” v. “Provisos” • Indemnification • Consent and Approval Provisions • Computational Provisions • Third-Party Beneficiary Provisions • Dealing with Options • Non-Disclosure Undertaking: Confidentiality Agreements • Modification and Amendment Provisions • Rights of First Refusal and of First Offer • Representations and Warranties • Notice Provisions • Market-Shift Protection Devices • Limitations on Liability for Breach • Contractual Limitations of Action Periods • Exculpatory Provisions • Due Diligence Provisions • Waiver of Jury Trial • Further Assurances • Anti-Waiver Provisions • Assignment, Delegation, Assumption and Novation • Succession
APPENDIX I LETTER OF INTENT TERM SHEET PROVISIONS
APPENDIX II YELLOWSTONE PROVISION
APPENDIX III GENERIC DEFINITIONS
APPENDIX IV INDEMNIFICATION
