Business Law & Order - April 21, 2014 - Contracts 101

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Business Law & Order - April 21, 2014 - Contracts 101

  1. 1. CONTRACTS 101 SPARK LAW & ORDER BY RUSS BROWN R.D. BROWN, PLC RDBROWN@RDBROWNLAW.CO M Negotiation and Drafting
  2. 2. What is a Contract  a: a binding agreement between two or more persons or parties ; e spe cially one legally enforceable  b: a business arrangement for the supply of goods or services at a fixed price -Merriam-Webster
  3. 3. Have you agreed to a contract? How many people think they are party to a contract?
  4. 4. Examples
  5. 5. Examples  Credit Card Agreement
  6. 6. Examples  Credit Card Agreement  Signed agreement related to a job
  7. 7. Examples  Credit Card Agreement  Signed agreement related to a job  Online agreement when starting a Facebook or email account
  8. 8. Examples  Credit Card Agreement  Signed agreement related to a job  Online agreement when starting a Facebook or email account  An agreement to buy something from a friend
  9. 9. Examples  Credit Card Agreement  Signed agreement related to a job  Online agreement when starting a Facebook or email account  An agreement to buy something from a friend  Buying something from a store
  10. 10. Facebook terms and conditions  Switch to Firefox
  11. 11. Civil Legal Duties
  12. 12. What does it mean to Contract? Contracts are about:
  13. 13. What does it mean to Contract? Contracts are about:  Bargaining
  14. 14. What does it mean to Contract? Contracts are about:  Bargaining  Coming to an agreement
  15. 15. What does it mean to Contract? Contracts are about:  Bargaining  Coming to an agreement  Being willing to be legally bound to your side of that agreement, as long as the other party is bound to theirs
  16. 16. Elements of contracting  Offer  Acceptance  Consideration
  17. 17. Elements of contracting  Offer  Acceptance  Consideration  These are the basic elements, but contract law can get a lot more complicated
  18. 18. Offer  An offer is an invitation to make a contract
  19. 19. Offer  An offer is an invitation to make a contract  Examples?
  20. 20. Offer  An offer is an invitation to make a contract  Examples?  Displaying a take it or leave it contract online  Bidding on ebay  Putting a price tag on an item in a store
  21. 21. Offer  An offer is an invitation to make a contract  Examples?  Displaying a take it or leave it contract online  Bidding on ebay  Putting a price tag on an item in a store  Offers can go back and forth (but don’t have to) until…
  22. 22. Acceptance  The point at which one party agrees to the other parties offer  Examples  Clicking that you accept the online contract  Winning an ebay auction  Buying the item from the store
  23. 23. Consideration  Generally, courts will only enforce a contract if both sides are getting something.  What each side gives the other is called consideration.
  24. 24. Is this a contract? In each of the following examples, ask yourself if there is mutual consideration?
  25. 25. Is this a contract?  You order a book of Amazon.com. Your credit card is charged, but no book ever shows up.  Was there a legally enforceable contract?
  26. 26. Is this a contract?  You order a book of Amazon.com. Your credit card is charged, but no book ever shows up.  Was there a legally enforceable contract?  Yes, you agreed to pay Amazon.com money and they agreed to send you a book.
  27. 27. Is this a contract?  Last year, your uncle promised you an iPhone for your 18th birthday. When you turned 18, he gave you his old broken basic cell phone.  Was there a legally enforceable contract?
  28. 28. Is this a contract?  Last year, your uncle promised you an iPhone for your 18th birthday. When you turned 18, he gave you his old broken basic cell phone.  Was there a legally enforceable contract?  No, while your uncle made a promise, he did not receive any consideration in return. Consideration has to be more than good feelings.
  29. 29. Is this a contract?  You signed up for a week long summer basketball camp which cost $100. You paid and went to the camp. When you got to the camp, they just had you watch football movies all day.  Was there a legally enforceable contract?
  30. 30. Is this a contract?  You signed up for a week long summer basketball camp which cost $100. You paid and went to the camp. When you got to the camp, they just had you watch football movies all day.  Was there a legally enforceable contract?  Yes. You agreed to pay money to the camp and they were supposed to give you basketball training.
  31. 31. Negotiation and drafting activity  We are going to negotiate and draft a contract  Negotiating and drafting contracts is something that a lot of lawyers do—including hopefully me.  The goal is to come to an agreement.  This requires each side to compromise, so that they can get what they really want—to make a deal.
  32. 32. When drafting be sure to  Include all the terms  Don’t be afraid of creative solutions  Use specific binding language:  “Shall” not “Will”  X shallpay Y $10.  Y shallwash X’s car.  Not:  X willpay Y $10.  Y willwash X’s car.
  33. 33. Good Drafting Techniques  Plain Language  Include a Preamble  Offerand Acceptance  The MirrorImage Rule  Binding Offers Versus Invitations to Bargain  Revocability of  Consideration  Authorized Representation  ProperGrammar
  34. 34. Types of University Contracts  Affiliation and International Program Agreements  Athletic-Specific, or Student-Specific Contracts (non- procurement in nature).  Interagency Cooperation Agreements (IAC) & Inter-local Agreements  Museum and Exhibit Agreements  Prof. Service Agreements (for individuals not organized as a business)  Procurement Contracts; Vendor Services  Sponsored Research Contracts and Sponsored Projects  University-Provided Services
  35. 35. Major Areas within Every Contract Parties Effective Date and Terms Statement of Service (SOS) Pricing Performance Standards Warranties Remedies Risk Allocation Boilerplate Signatures
  36. 36. Common Contractual Terms Three commonly negotiated/contentious provisions: 1. Warranties 2. Indemnification [protection against loss or liability from 3rd party claims] 3. Liability & Damages [legal responsibilities]
  37. 37. Government Contracting
  38. 38. Questions?

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