Victoria Pynchon—she of the Settle It Now Negotiation Blog—asked me the following question:
While I was practicing, it was common for the opposition to put signature lines on settlement agreements for the attorneys’ signatures. I always refused to sign these, saying, “I’m not a party to this contract and I don’t think my signature adds anything […]
I often come away from a seminar having learned something new.
For example, a participant at my recent Vancouver seminar asked me what I thought of the phrase dated for reference, as used in the introductory clause. I confessed that I hadn’t previously encountered it.
After I arrived home, I searched on Lexis for use of the […]
I don’t include in the introductory clause the address of a party that’s a legal entity. That’s because the introductory clause serves to distinguish a given party from any other person or entity with that name. For a legal entity, that’s accomplished by giving its jurisdiction of organization or its registration number; you don’t also […]
Special thanks to reader Tony for reminding me of a usage that had slipped my mind: becoming party to a contract with respect to only certain provisions.
For example, in an acquisition, the buyer’s parent might be party to the acquisition agreement solely to guarantee the buyer’s obligations or solely to undertake to pay a termination […]
In the past year, 265 contracts filed as “material contracts” on the SEC’s EDGAR database contained a provision stating that the recitals were true and accurate. Here’s an example:
The above recitals are hereby made a part of this Agreement and the Borrower acknowledges and agrees that each of the recitals is true and correct.
That’s not […]
Here’s yet another issue regarding the introductory clause that I haven’t previously written about: How, if at all, should you address in the introductory clause the fact that performance under the contract will be by a division of a company?
You could ignore it. After all, the company will be on the hook, not the division, […]
Here’s another fresh extract from the manuscript of MSCD2. It’s from the section “The Title,” and it addresses at greater length something I mention in MSCD 2.3:
And don’t feel obligated to track the terminology of state statutes. For example, statutes in Nevada, New York, and other states use the term “plan of merger.” As a […]
I’ve snickered at the notion of contracts under seal, but I’ve never studied the topic. Here’s what I found out:
In medieval England, a seal—consisting of wax attached to a writing and bearing an impression—served as a marker to identify the parties to an agreement. As literacy increased, signatures slowly replaced seals as identifying markers.
And the […]
In this comment to an October 2007 post, reader Michael Fleming said the following:
Speaking of things we find in the introductory clause—How about some research and commentary into the British drafting habit (or is it a requirement???) of including the “company number” as part of the name of the corporate party (e.g., “Top Hat, Ltd., […]
Last year I drafted the following introductory clause to a merger agreement:
This merger agreement is dated March 23, 2006, and is between DARIUS TECHNOLOGIES, INC., a California corporation (“Parent”), SWORDFISH ACQUISITION, INC., a California corporation and a wholly-owned subsidiary of Parent (“Sub”), TROMBONE SOFTWARE, INC., a Delaware corporation (“Target”), and the stockholders of Target, namely […]
Way back in this August 2006 post I described how select information is often pulled out of the body of a commercial contract and placed at the top. In my post I expressed reservations about this practice, but the commenters set me straight.
I referred to this practice as “the box,” given that the abstracted information […]
In this March 2007 post I discussed language to use, and language not to use, when making an ancillary document—including a web page—part of a contract without physically attaching it. (I subsequently invented the term “virtual attachment” to describe any such ancillary document.)
What prompted that post was a case that held that saying that the […]
Consider the following purpose recital, plucked from an agreement filed last month on the SEC’s EDGAR system:
WHEREAS, in connection with the transactions contemplated by the Asset Purchase Agreement, Buyer desires that Seller Manufacture (as defined herein) and supply certain Products to Buyer, and Seller desires to Manufacture and supply such Products to Buyer in accordance […]
Here’s a point that I don’t make in MSCD but will be sure to make in MSCD2: Don’t use in the recitals defined terms that are defined later in the contract.
The job of the recitals is to introduce the transaction. If you put in the recitals a defined term that’s defined later, you force the […]
Via Ray Ward of the (new) legal writer, I learned that Lowering the Bar had a take on the saga of the contract written in blood.
I’d previously heard about this story but I didn’t think it had much bearing on what I do—my notion of what falls under the rubric “contract drafting” isn’t broad enough […]
In this blog post, I described how in certain circumstances you might want to date a contract by having the parties date their signatures rather than by including a date in the introductory clause. I also mentioned how adopting that approach would require that you use a different concluding clause than the one you’d use […]
I recently reviewed for a company a draft settlement agreement that had been prepared by outside counsel retained by the company. I thought the draft needed help. In particular, I found the recitals bloated and vague:
RECITALS
A. As of the date of this Settlement Agreement a dispute exists between AcmeTek and Widgetz regarding the contracts made between […]
One of the pleasures of contract drafting is that the parties are as a general matter left to their own devices. Of course you have to structure any given transaction in a way that takes into account legal, tax, regulatory, or other considerations, but as a rule how you do that is up to you.
But […]
My background is in drafting for deals rather drafting commercial agreements. (By “commercial agreement” I mean, vaguely enough, a form agreement relating to the supply of goods, services, or technology to customers.) But in my consulting activities, I’ve recently been dealing exclusively with commercial agreements.
Because any given commercial agreement will likely be entered into dozens […]
It’s commonplace for drafters to assume that unless they say so explicitly, schedules and exhibits attached to a contract don’t constitute part of that contract. Here’s an assortment of contract language reflecting this assumption:
Schedule A constitutes a part of this agreement.
All exhibits referenced in this agreement are made a part of this agreement.
The exhibits and […]
In MSCD (¶¶ 2.64–71) and a Business Law Today article on the subject, I recommend strongly that drafters dispense with the traditional recital of consideration.
The traditional recital of consideration is the consideration language that clogs the lead-in to the body of the contract in a majority of contracts. The language varies, but here’s an example […]
Embassy Suites Portland Downtown
Grand Hyatt Seattle
AMA Exec. Conference Center
Windows on Minnesota
Downtown Harvard Club of Boston
The Manhattan Club at Rosie O’Grady’s
University Club of San Francisco
