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

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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