Contracts Negotiation and Drafting
What is a Contract • a: a binding agreement between two or more persons or parties ; especially one legally enforceable • b: a business arrangement for the supply of goods or services at a fixed price -Merriam-Webster
Have you agreed to a contract? How many people think they are party to a contract?
Examples
Examples • Credit Card Agreement
Examples • Credit Card Agreement • Signed agreement related to a job
Examples • Credit Card Agreement • Signed agreement related to a job • Online agreement when starting a Facebook or email account
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
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
Facebook terms and conditions • Switch to Firefox
Civil Legal Duties
What does it mean to Contract? Contracts are about:
What does it mean to Contract? Contracts are about: • Bargaining
What does it mean to Contract? Contracts are about: • Bargaining • Coming to an agreement
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
Elements of contracting • Offer • Acceptance • Consideration
Elements of contracting • Offer • Acceptance • Consideration • These are the basic elements, but contract law can get a lot more complicated
Offer • An offer is an invitation to make a contract
Offer • An offer is an invitation to make a contract • Examples?
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
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…
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
Consideration • Generally, courts will only enforce a contract if both sides are getting something. • What each side gives the other is called consideration.
Is this a contract? In each of the following examples, ask yourself if there is mutual consideration?
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?
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.
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?
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.
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?
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.
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.
When drafting be sure to • Include all the terms • Don’t be afraid of creative solutions • Use specific binding language: • “Shall” not “Will” • X shall pay Y $10. • Y shall wash X’s car. • Not: • X will pay Y $10. • Y will wash X’s car.
Chris Brown’s new record deal • Following the recent news reports of his arrest for Domestic Violence, Chris Brown’s record label decides not to renew his record deal. • Chris Brown has found a new record company—Song & Dance Records—interested in signing him to a new recording deal. • Chris Brown’s agent, who is trained as a lawyer, is negotiating the terms of the deal with a lawyer for Song & Dance. • After agreeing on the terms, they will draft a contract to bring to their respective clients—Chris Brown and Song & Dance executives.
Record deal terms • Royalties of music sales • Duration of deal (number of albums) • Termination • Optional (if you have time): • Cash advance (upfront money taken away from future royalties) • Exclusive agreement (can Chris Brown record an album with a different label) • When the next album will released • Money for production
