NUST E-MBANUST E-MBALegal Environment of Legal Environment of

BusinessBusiness

08 June 201008 June 2010

This class is much like real lifeThis class is much like real life

You will be tested first and taught later.You will be tested first and taught later.Be prepared.Be prepared.The only difference between this class and The only difference between this class and

life is that you cannot erase the patterns life is that you cannot erase the patterns you have drawn in life (OR CAN YOU).you have drawn in life (OR CAN YOU).

However, here you will have the However, here you will have the opportunity to diminish or all together opportunity to diminish or all together erase mistakes made during class.erase mistakes made during class.

LawLaw

Law is in general based on reasoning.Law is in general based on reasoning. Social systems evolved and developed laws and Social systems evolved and developed laws and

legal structures pursuant to their needs.legal structures pursuant to their needs. Laws generally categorized as Civil and Laws generally categorized as Civil and

Criminal. Criminal. Criminal Laws are punitive and penal in nature.Criminal Laws are punitive and penal in nature. Civil Laws primarily are compensatory not penal.Civil Laws primarily are compensatory not penal.

Civil v. CriminalCivil v. Criminal

Plaintiff or complainant in civil cases, is not Plaintiff or complainant in civil cases, is not especially interested in sending the defendant to especially interested in sending the defendant to jail. Primary interest is compensation or a jail. Primary interest is compensation or a specific order instructing the defendant to do or specific order instructing the defendant to do or refrain from doing a particular act. refrain from doing a particular act.

Plaintiff in civil matters is typically an individual Plaintiff in civil matters is typically an individual or a legal fiction / a corporation / company. or a legal fiction / a corporation / company. However, A State may be a plaintiff.However, A State may be a plaintiff.

In Criminal cases, the State is always involved. In Criminal cases, the State is always involved. The interest of the State is paramount. The interest of the State is paramount.

Is this a course on Law?Is this a course on Law?

This is not a course on law.This is not a course on law.Thou shall not become lawyers.Thou shall not become lawyers.This course is being conducted to This course is being conducted to

enhance your appreciation of legal enhance your appreciation of legal structures and mechanisms necessary for structures and mechanisms necessary for making institutions more productive, making institutions more productive, thereby resulting in increased revenue and thereby resulting in increased revenue and benefit to yourself and your organization.benefit to yourself and your organization.

However, this is not Economics.However, this is not Economics.

What are we trying to achieve?What are we trying to achieve?

Develop an appreciation for certain core Develop an appreciation for certain core concepts of law indispensable for making an concepts of law indispensable for making an informed business graduate. informed business graduate.

To develop capacity to appreciate law, legal To develop capacity to appreciate law, legal structures and the legal environment of structures and the legal environment of business.business.

Develop the reading habit.Develop the reading habit. Enhance writing skills.Enhance writing skills. Effective communication will help you throughout Effective communication will help you throughout

your lives.your lives.

IntegratingIntegrating

Law, economics, and public policy to make the Law, economics, and public policy to make the M.B.A.’s:M.B.A.’s:

Well rounded.Well rounded. Capable of representing your organization Capable of representing your organization

before commercial sector institutions.before commercial sector institutions. Serve in Pakistan or abroad.Serve in Pakistan or abroad. Note: Economics, Law, and sound policies Note: Economics, Law, and sound policies

combined are perhaps the simplest way to combined are perhaps the simplest way to sustainable progress and Economic sustainable progress and Economic Development.Development.

Course contentCourse content

Law in general.Law in general.Legal environment which is likely to further Legal environment which is likely to further

business.business. Issues with legal structures existing in Issues with legal structures existing in

Pakistan.Pakistan.

Specific AreasSpecific Areas

Contract LawContract LawCompany LawCompany LawCompetition LawCompetition Law Intellectual PropertyIntellectual PropertySales of GoodsSales of GoodsTransfer of Property Transfer of Property

GradingGrading (NOT FINAL)(NOT FINAL)

Total possible points are 100.Total possible points are 100.10 points for Quizzes10 points for Quizzes15 points are for assignments15 points are for assignments30 midterm30 midterm45 points for final exam45 points for final examATTENDING CLASS AND PREPARING ATTENDING CLASS AND PREPARING

REGULARLY SHALL BE BENEFICIAL.REGULARLY SHALL BE BENEFICIAL.

Reading MaterialsReading Materials Contract from West’s Legal Environment of Contract from West’s Legal Environment of

Business. Business. Company Law Handbook Sweet & Maxwell. Company Law Handbook Sweet & Maxwell.

Companies Ordinance 1984. Companies Ordinance 1984. Agency.Agency. C.C.P Ordinance and Merger guidelines / Basic C.C.P Ordinance and Merger guidelines / Basic

over view of Anti-trust Laws.over view of Anti-trust Laws. Intellectual Property Laws: Copyrights, Intellectual Property Laws: Copyrights,

Trademarks and Patents downloadable from the Trademarks and Patents downloadable from the I.P.O. web-site.I.P.O. web-site.

Banking Law of Pakistan. Banking Law of Pakistan.

Favorite QuotesFavorite Quotes

Genius is one percent inspiration and 99 Genius is one percent inspiration and 99 percent perspiration. We hope to inspire percent perspiration. We hope to inspire you, perspiration is the opportunity cost.you, perspiration is the opportunity cost.

The only constant in life is change. Please The only constant in life is change. Please don’t be averse to positive change.don’t be averse to positive change.

Contract Law 1Contract Law 1

08 June 201008 June 2010

Contract law: General conceptsContract law: General concepts

Different from criminal law which controlsDifferent from criminal law which controls

Behavior through punishment.Behavior through punishment. Different from tort law which controls behaviorDifferent from tort law which controls behavior

Which is less “bad” through liability includingWhich is less “bad” through liability including

punitive damage. punitive damage. Contract law simply makes the individual wholeContract law simply makes the individual whole Rare occasion when court may order a Rare occasion when court may order a

breaching party to perform their promise. breaching party to perform their promise. Specific PerformanceSpecific Performance

GeneralGeneral

A contract is not needed when people getA contract is not needed when people getalong; only when things go wrong and break along; only when things go wrong and break down. down. – – When enforcing the contract, the text of theWhen enforcing the contract, the text of thecontract is all one has. . . Ever heard some one contract is all one has. . . Ever heard some one say ‘hamari Zaban hoyee hai / Gentleman’s say ‘hamari Zaban hoyee hai / Gentleman’s Agreement” Agreement”

• • Clarity of language, grammar, obligations andClarity of language, grammar, obligations andexpectations is critical – understand everything inexpectations is critical – understand everything inthe agreement before signing!!the agreement before signing!!

What is a Contract?What is a Contract?

A contract is a promise or set of promises A contract is a promise or set of promises to do (or not do) something. – Creates to do (or not do) something. – Creates legal duty legal duty to perform the promise which is to perform the promise which is enforceable through the Courts or by enforceable through the Courts or by alternate means.alternate means.

Any transaction in which the parties make Any transaction in which the parties make a legally enforceable promise is a contract.a legally enforceable promise is a contract.

The title of the document is of no The title of the document is of no consequence.consequence.

Format Format

May be in writing, by word of mouth May be in writing, by word of mouth (orally) by conduct, or by any combination (orally) by conduct, or by any combination of such words and actions.of such words and actions. ..

Contract law = foundation of all commercialContract law = foundation of all commercial

activitiesactivities

Wide range of contracts:Wide range of contracts:

e.g. simple consumer contracts to e.g. simple consumer contracts to construction contracts, sale and purchase construction contracts, sale and purchase agreements in conveyancing transactionsagreements in conveyancing transactions

FunctionFunction

Designed to provide stability and Designed to provide stability and predictability, as well as certainty, for both, predictability, as well as certainty, for both, buyers and sellers in the marketplace.buyers and sellers in the marketplace.

Reduction of transaction costs.Reduction of transaction costs.Necessary to ensure compliance with a Necessary to ensure compliance with a

promise or to entitle the innocent party to promise or to entitle the innocent party to some form of relief.some form of relief.

ContractContract

A contract is a:A contract is a:Promise or set of promises,Promise or set of promises,For breach of which,For breach of which,The law provides a remedy, orThe law provides a remedy, orThe performance of which the law in some The performance of which the law in some

way recognizes as a duty.way recognizes as a duty.Objective Theory of Contacts. Objective Theory of Contacts.

Circumstances to determine intent of Circumstances to determine intent of parties.parties.

Formation of a Contract:Formation of a Contract:Offer and AcceptanceOffer and Acceptance

To create a binding contract, there must be (toTo create a binding contract, there must be (toevidence mutual assent):evidence mutual assent):– – An offer of termsAn offer of terms– – An acceptance of that offerAn acceptance of that offer– – Once an offer is accepted, mutual assent is presentOnce an offer is accepted, mutual assent is presenta binding contract may have been formeda binding contract may have been formed-Consideration-Consideration-Capacity-Capacity-Intention to create legal obligations-Intention to create legal obligations

NOTE GENERAL RULE: If the other party modifies one or more NOTE GENERAL RULE: If the other party modifies one or more of the proposed terms, the offer is not accepted and no of the proposed terms, the offer is not accepted and no contract is created. Rather, a new “counteroffer” is made that contract is created. Rather, a new “counteroffer” is made that may be accepted or rejected by the original offerormay be accepted or rejected by the original offeror..

Requirements of the OfferRequirements of the Offer

Offeror’s serious intention.Offeror’s serious intention.Definiteness of terms.Definiteness of terms.Communication to Offeree.Communication to Offeree.

In other words offer is a signification of In other words offer is a signification of willingness expressed by one party to the willingness expressed by one party to the other to enter into a contract on stated other to enter into a contract on stated terms.terms.

Intention of the offerorIntention of the offeror

Contract is judged by what a reasonable person Contract is judged by what a reasonable person in the Offeree’s position would conclude about in the Offeree’s position would conclude about the offer.the offer.

Offers made in anger, jest, or undue excitement Offers made in anger, jest, or undue excitement are usually not offers (legally speaking).are usually not offers (legally speaking).

Expressions of opinion are not offers.Expressions of opinion are not offers. Statements of Intention or preliminary Statements of Intention or preliminary

negotiations are not offers.negotiations are not offers. Advertisements, Catalogues, Price Lists, and Advertisements, Catalogues, Price Lists, and

Circular are treated as Invitations to negotiate Circular are treated as Invitations to negotiate and not as offers.and not as offers.

Formation of a Contract:Formation of a Contract:Offer and AcceptanceOffer and Acceptance

Duration of Offer: Once an offer is made, itDuration of Offer: Once an offer is made, itremains open for a “reasonable” time unless theremains open for a “reasonable” time unless theofferor provides a specific time period forofferor provides a specific time period foracceptance.acceptance.

If the offer is accepted within that reasonable time, aIf the offer is accepted within that reasonable time, alegal contract is created even if offeror had secondlegal contract is created even if offeror had secondthoughts prior to the acceptance!thoughts prior to the acceptance!

Acceptance is the:Acceptance is the: Voluntary act by the Offeree that,Voluntary act by the Offeree that, shows assent (agreement),shows assent (agreement), to the terms of an offer.to the terms of an offer.

““Mirror Image” Rule.Mirror Image” Rule.

Tip: In negotiations, state “terms must beTip: In negotiations, state “terms must beaccepted by XXXX date” at the bottom of email oraccepted by XXXX date” at the bottom of email orletterletter

Revocation of offerRevocation of offer

To revoke an offer of terms, To revoke an offer of terms, the offeror the offeror must clearly and directly revoke offer to must clearly and directly revoke offer to the other party.the other party.

If you realize the terms you proposed may If you realize the terms you proposed may not work, not work, immediately immediately send an email send an email clearly stating they are no longer offered.clearly stating they are no longer offered.

A revocation of offer is effective upon A revocation of offer is effective upon receipt.receipt.

ConsiderationConsideration

Consideration for a promise must be either:Consideration for a promise must be either: Legally detrimental to the promisee, or Legally Legally detrimental to the promisee, or Legally

beneficial to the promisor.beneficial to the promisor.

““Legal Value” is a “Bargained for Exchange”:Legal Value” is a “Bargained for Exchange”: Promise,Promise, Performance, orPerformance, or Forbearance.Forbearance.

Case 9.4:Case 9.4: Hamer v. SidwayHamer v. Sidway (1891). (1891).

Hamer v. SidwayHamer v. Sidway, 124 N.Y. 538, , 124 N.Y. 538, 27 N.E. 256 (N.Y. 1891).27 N.E. 256 (N.Y. 1891).

Facts:Facts: William E. Story and his nephew, William E. Story II, agreed that the uncle would pay his William E. Story and his nephew, William E. Story II, agreed that the uncle would pay his nephew $5000 if the nephew would refrain from drinking, using tobacco, swearing, and playing cards nephew $5000 if the nephew would refrain from drinking, using tobacco, swearing, and playing cards and billiards for money until he turned 21. When the nephew turned 21 his uncle sent him a letter that and billiards for money until he turned 21. When the nephew turned 21 his uncle sent him a letter that indicated that the nephew had earned the $5000 and that he would hold the money with interest until indicated that the nephew had earned the $5000 and that he would hold the money with interest until the nephew became capable of taking care of it responsibly. The nephew accepted the terms. The the nephew became capable of taking care of it responsibly. The nephew accepted the terms. The uncle died twelve years later without having transferred the funds to his nephew.uncle died twelve years later without having transferred the funds to his nephew.

The nephew assigned the funds to Louisa Hamer (P) who brought suit against the executor of the The nephew assigned the funds to Louisa Hamer (P) who brought suit against the executor of the uncle’s estate, Franklin Sidway (D). At trial judgment was entered in Hamer’s favor which was uncle’s estate, Franklin Sidway (D). At trial judgment was entered in Hamer’s favor which was reversed on appeal in Sidway’s favor. Hamer appealed.reversed on appeal in Sidway’s favor. Hamer appealed.

Issue:Issue: Is forbearance from permissible legal conduct sufficient consideration to create a valid and Is forbearance from permissible legal conduct sufficient consideration to create a valid and enforceable contract?enforceable contract?

Holding and Rule:Holding and Rule: Yes. The mere abstention from a permissible legal conduct is sufficient Yes. The mere abstention from a permissible legal conduct is sufficient consideration to make a promise based on that forbearance a valid contract. Consideration is not consideration to make a promise based on that forbearance a valid contract. Consideration is not measured as a benefit to the promisor. When an offer is ambiguous regarding whether acceptance measured as a benefit to the promisor. When an offer is ambiguous regarding whether acceptance shall be in the form of performance or an exchange of promises, determining if the offeror was shall be in the form of performance or an exchange of promises, determining if the offeror was indifferent to whether acceptance be by performance or promise is accomplished by interpreting the indifferent to whether acceptance be by performance or promise is accomplished by interpreting the language of the offer under the circumstances in which it was made. The court held that in this case, language of the offer under the circumstances in which it was made. The court held that in this case, the language of the offer made it clear that the uncle sought acceptance by performance and not by the language of the offer made it clear that the uncle sought acceptance by performance and not by a promise to perform.a promise to perform.

D contended that the contract was invalid because it lacked consideration and that there is no D contended that the contract was invalid because it lacked consideration and that there is no consideration unless the promisor is benefited. The court stated that consideration may consist in consideration unless the promisor is benefited. The court stated that consideration may consist in either a some right, interest, profit, or benefit to one party, or some forbearance, detriment, loss, or either a some right, interest, profit, or benefit to one party, or some forbearance, detriment, loss, or responsibility given, suffered, or undertaken by the other. It is immaterial whether the consideration responsibility given, suffered, or undertaken by the other. It is immaterial whether the consideration does in fact benefit the promisee or a third party or is of substantial value to anyone. Refraining from does in fact benefit the promisee or a third party or is of substantial value to anyone. Refraining from something that one is entitled to do is a sufficient detriment to create an enforceable contract.something that one is entitled to do is a sufficient detriment to create an enforceable contract.

Disposition:Disposition: Reversed in favor of Hamer (P). Reversed in favor of Hamer (P).

Adequacy of ConsiderationAdequacy of Consideration

A Court will not question the fairness of A Court will not question the fairness of the bargain if legally sufficient.the bargain if legally sufficient.Law does not protect a person for entering Law does not protect a person for entering

into an unwise contract.into an unwise contract. In extreme cases, a court may find that a In extreme cases, a court may find that a

party lacks legal capacity or that contract was party lacks legal capacity or that contract was unconscionable. unconscionable.

ConsiderationConsideration Both parties must agree to give up something ofBoth parties must agree to give up something of

value to create a legally enforceable contract.value to create a legally enforceable contract.““Something of value” defined broadly: can be time,Something of value” defined broadly: can be time,money, ability to perform a different project, ability tomoney, ability to perform a different project, ability tosue, etc.sue, etc.

““Illusory contracts” where one side can get out atIllusory contracts” where one side can get out atanytime is not enforceable. (termination for convenience anytime is not enforceable. (termination for convenience with no notice period).with no notice period).

Gifts v. Contracts:Gifts v. Contracts: In a gift, a donor gives funds/equipment and theIn a gift, a donor gives funds/equipment and the

university can do whatever it wants with the donationuniversity can do whatever it wants with the donationNo consideration = no contractNo consideration = no contract

No Consideration whereNo Consideration where

Preexisting Duty: General Rule: Preexisting Duty: General Rule: Promise to Promise to do what one already has a legal duty to do does do what one already has a legal duty to do does not constitute legally sufficient consideration. not constitute legally sufficient consideration.

Past Consideration is no consideration Past Consideration is no consideration because the bargained-for exchange because the bargained-for exchange element is missing.element is missing.

PurposePurpose

• • Cannot be against public policy / Law.Cannot be against public policy / Law.– – e.g., e.g., A contract to manufacture illegal A contract to manufacture illegal

drugs is not enforceable!drugs is not enforceable!A contract to kill someone cannot be A contract to kill someone cannot be

enforced in a Court of Law.enforced in a Court of Law.

Mutual AssentMutual Assent

• • Principle: Both parties must intend to enter into aPrinciple: Both parties must intend to enter into acontract, and must intend to agree to the (same)contract, and must intend to agree to the (same)material material terms Called a “meeting of the minds”terms Called a “meeting of the minds”

Contracts can be created once all key terms are Contracts can be created once all key terms are agreed agreed

How is it determined? – By the How is it determined? – By the outward outward conduct/words conduct/words of a party, not internal state of of a party, not internal state of their mind. Don’t say “sounds good” when you their mind. Don’t say “sounds good” when you are not sure. Tell other side you need time to are not sure. Tell other side you need time to think and will get back to them. Joking can result think and will get back to them. Joking can result in serious problems.in serious problems.

Written ContractsWritten Contracts Contracts do not necessarily need to be in writing toContracts do not necessarily need to be in writing to

be legally bindingbe legally binding Only certain contracts must be written, including but not Only certain contracts must be written, including but not

limited to contracts related to real estate. If a writing is limited to contracts related to real estate. If a writing is not required, one can form an enforceable contractnot required, one can form an enforceable contractover the telephone, in person, or by conduct (i.e., over the telephone, in person, or by conduct (i.e., starting to perform).starting to perform).

Writing can be a contract, or an email/fax/letter Writing can be a contract, or an email/fax/letter exchange that creates the terms when put together.exchange that creates the terms when put together.

Your words/conduct when negotiating!Your words/conduct when negotiating!

Contract TermsContract TermsImpliedImplied

Good faith and fair dealingGood faith and fair dealing Implied WarrantiesImplied Warranties Modification of terms implied by conductModification of terms implied by conductof parties– of parties– Make sure a term like “No waiver by eitherMake sure a term like “No waiver by eitherparty of any default of this Agreement may beparty of any default of this Agreement may bedeemed a waiver of any subsequent or similardeemed a waiver of any subsequent or similardefault.” and an “entire agreement” clause is indefault.” and an “entire agreement” clause is inyour contract!your contract!

Interpreting a ContractInterpreting a Contract

Two parties may interpret the same contractTwo parties may interpret the same contractlanguage differently.language differently.

Did the phrase “final report summarizing allDid the phrase “final report summarizing allresearch results” mean:research results” mean: A 60 page discourse?A 60 page discourse? A 10 page executive summary?A 10 page executive summary?

One bottom line sentence?One bottom line sentence?Especially important when it comes to specialized Especially important when it comes to specialized

agreements.agreements. How would a Court sort through an agreement?How would a Court sort through an agreement?

Interpretation by CourtsInterpretation by Courts Interpretation of ContractsInterpretation of Contracts

Apply the plain meaning of the word or phraseApply the plain meaning of the word or phraseDictionary definition; common usage definitionDictionary definition; common usage definition

If appropriate, apply course of performance;If appropriate, apply course of performance;Course of Dealing; Usage of Trade (custom) toCourse of Dealing; Usage of Trade (custom) tohelp interpret the termhelp interpret the term– – Performance—how the parties have been performing thePerformance—how the parties have been performing theagreement in issueagreement in issue– – Dealing—how the parties have behaved in the past Dealing—how the parties have behaved in the past – – Custom—how the applicable industry or field generally behavesCustom—how the applicable industry or field generally behaves

Interpretation of ContractsInterpretation of Contracts

If both parties have different interpretations,If both parties have different interpretations,

the courts will favor the interpretation of thethe courts will favor the interpretation of the

non-drafting party non-drafting party

Simple fix by inserting following term inSimple fix by inserting following term in

back of contract:back of contract:

““This Agreement shall be deemed to be This Agreement shall be deemed to be jointly drafted by both parties and, in the jointly drafted by both parties and, in the event of a dispute, shall not be construed event of a dispute, shall not be construed against either party.”against either party.”

EstoppelEstoppel

Estoppel Estoppel is a legal doctrine which is meant to is a legal doctrine which is meant to complement the requirement of consideration in complement the requirement of consideration in contract law.contract law.

In general it protects a party which would suffer In general it protects a party which would suffer a detriment if:a detriment if:

The defendant/Sponsor has done or said The defendant/Sponsor has done or said something to induce an expectation something to induce an expectation

• • The plaintiff relied (reasonably) on theThe plaintiff relied (reasonably) on theexpectation...and would suffer detriment if that expectation...and would suffer detriment if that expectation were false.expectation were false.

AnalysisAnalysis

1). Do we have a contract ?1). Do we have a contract ? Capability to contractCapability to contract Meeting of the minds (offer and acceptance)Meeting of the minds (offer and acceptance) ConsiderationConsideration Lawful PurposeLawful Purpose Written requirementWritten requirement oror

Estoppel – DetrimentalEstoppel – Detrimental The analysis…The analysis…2.) Is Sponsor estopped from withdrawing?2.) Is Sponsor estopped from withdrawing? Did Sponsor do or say something to induce the Did Sponsor do or say something to induce the

institution’s actionsinstitution’s actions Should the Sponsor reasonably have expected Should the Sponsor reasonably have expected

that institution would undertake actions based that institution would undertake actions based on the inducement Was the institution on the inducement Was the institution reasonable in interpreting that the activities were reasonable in interpreting that the activities were endorsed by sponsor and would be subject to endorsed by sponsor and would be subject to compensation and finally;compensation and finally;

Will institution suffer detriment upon a Will institution suffer detriment upon a determination of “no contract.”determination of “no contract.”

ReasonableReasonable

Underlying driver is reasonablenessUnderlying driver is reasonablenessSubjectiveSubjective Industry PracticeIndustry PracticeCommunicationCommunicationProvableProvable

A word on MOUs. . .A word on MOUs. . .

MOUMOU

Purpose – signifies the intent of the parties toPurpose – signifies the intent of the parties to

undertake joint activities that may lead to a laterundertake joint activities that may lead to a later

binding agreement.binding agreement. Examples:Examples: International cooperationInternational cooperation Often simply “feel good” documents – purpose Often simply “feel good” documents – purpose

is ceremonial to formally acknowledge a is ceremonial to formally acknowledge a relationship common in many Asian and relationship common in many Asian and European Business culturesEuropean Business cultures

““Non-Binding” Agreements/MOUsNon-Binding” Agreements/MOUs

• • Unintended consequences: The MOU has all theUnintended consequences: The MOU has all theelements required to become a legally bindingelements required to become a legally bindingcontract, even though the government or entity did not contract, even though the government or entity did not intend it to be!intend it to be!

– – Tip: Review all MOUs with the assumption that theyTip: Review all MOUs with the assumption that theyare legally binding; assure your organization can perform are legally binding; assure your organization can perform all terms.all terms.

– – If a later agreement is anticipated, make 100% sureIf a later agreement is anticipated, make 100% sureyour organization can live with the terms; very difficult toyour organization can live with the terms; very difficult tomodify a term you agreed to in an MOU when youmodify a term you agreed to in an MOU when youmove to the formal agreementmove to the formal agreement

Some clauses to consider Some clauses to consider – “– “Neither party shall have any obligation to perform under thisNeither party shall have any obligation to perform under this

Agreement unless and until adequate and appropriate funding isAgreement unless and until adequate and appropriate funding issecured”secured”

– “– “This MOU shall expire either in six months or upon execution of aThis MOU shall expire either in six months or upon execution of aResearch / sales / investment agreement between the parties, Research / sales / investment agreement between the parties, whichever occurs sooner” (called a “sunset” provision)whichever occurs sooner” (called a “sunset” provision)

– – Agree to perform activities only “to the extent consistent withAgree to perform activities only “to the extent consistent withapplicable TDAP policies, practices and procedures. . .”applicable TDAP policies, practices and procedures. . .”

““This MOU is not intended to be legally binding but rather, is aThis MOU is not intended to be legally binding but rather, is areflection of the parties mutual intent to execute a [Joint Venture] reflection of the parties mutual intent to execute a [Joint Venture] agreement which includes, but is not limited to, the terms of this agreement which includes, but is not limited to, the terms of this MOU.”MOU.”

– – Make sure there is a term and termination procedures! Very Make sure there is a term and termination procedures! Very common for a first draft to be silent on how long it lasts.common for a first draft to be silent on how long it lasts.