Flashcards: Contract Drafting, Spring 2017

This document is under construction. See the detailed table of contents in the top right corner, or jump to the shorter questions. REVISED: Fri. May 5, 2017, 5:20 a.m.

1 Longer questions

1.1 Effective date is different


According to Professor Toedt, in most circumstances, the best way to state the effective date of a contract that is different from the date(s) that the contract is signed is:
A. In the preamble: "This Agreement is entered into on [DATE]."
Select this:
B. In the preamble: "This Agreement is entered into on the latest date signed as written in the signature blocks below, to be effective as of [DATE]."
Select this:
C. In the preamble: "This Agreement is entered into on [DATE]."
Select this:
D. None of the above.
Select this:
Commentary:

1.2 Affiliates as parties

FACTS: (1) Your client ABC Inc. has asked you to review a contract drafted by XYZ Corporation. (2) The preamble of the contract states that the parties are (i) ABC Inc. and (ii) XYZ Corporation and its Affiliates. (3) In the definitions section, the contract defines the term Affiliate.
TRUE OR FALSE: This contract structure is unobjectionable.
Answer:

1.3 Affiliates as beneficiaries

FACTS: (1) Customer Corporation negotiates a master purchase agreement with Vendor Inc. The agreement specifies the pricing that Vendor will honor, during the agreement term, for Customer's orders for particular goods and/or services. (2) Customer wants its various "Affiliates" (defined in the agreement) to be able to place orders at the specified pricing.
QUESTION: To accommodate Customer's desire, which of the following would be the best drafting approach?
A. In the preamble, recite that the parties are "(i) Vendor Inc. … and (ii) Customer Corporation … and its Affiliates (defined below)."
Select this:
B. In the preamble, recite that the parties are Vendor Inc. and Customer Corporation, but state in the body of the agreement that Customer's Affiliates are entitled to place orders at the agreed pricing.
Select this:
C. Both of the above.
Select this:
D. Neither of the above.
Select this:

1.4 Agreement date: The best way


According to Professor Toedt, in most circumstances, the best way to state the date of a contract is:
A. In the preamble: "This Agreement is entered into on [DATE]."
Select this:
B. In the preamble: "This Agreement is entered into on the latest date signed as written in the signature blocks below."
Select this:
C. In or just before the signature blocks: "Date: [DATE]."
Select this:
D. None of the above.
Select this:
Commentary:

1.5 Two-way vs. one-way NDAs

FACTS: (i) Your client Alice has been asked to sign a confidentiality agreement ("NDA") that was prepared by Bob ("The Other Side"). (ii) Neither Alice nor you have any past history with Bob. (iii) The NDA's terms apply equally to the confidential information of both Alice and Bob, not just to the confidential information of only one party or the other. (iv) Alice is in a hurry and asks if it's OK to just sign the NDA, given point (iii) above.
TRUE OR FALSE: You can probably go ahead and tell Alice "yes, it's OK to sign this."
Answer:

1.6 Injunctive relief: Stipulation of irreparable harm

FACTS: A draft NDA, prepared by the disclosing party, includes a injunctive-relief provision that states that if the receiving party breaches the NDA, then the disclosing party will be irreparably harmed and will be entitled to injunctive relief. You are reviewing the draft NDA for your client, which will be the receiving party.
TRUE OR FALSE: In these circumstances, there's probably no need to try to revise or delete this provision.
Answer:

1.7 Injunctive relief: Bond-waiver request

FACTS: A draft NDA, prepared by the disclosing party, includes a injunctive-relief provision that states that the receiving party waives any requirement for the posting of a bond as a prerequisite to the granting of injunctive relief. You are reviewing the draft NDA for your client, which will be the receiving party.
TRUE OR FALSE: In these circumstances, it'd be worthwhile to try to revise or delete this provision.
Answer:

1.8 What constitutes a warranty


TRUE OR FALSE: A contract provision can amount to a warranty even if the provision doesn't use the word warranty.
Answer:

1.9 Must a warranty specify a remedy?

FACTS: A contract states that "Alice warrants that the car is in good condition," but it is otherwise silent about what will happen if the car isn't in good condition.
TRUE OR FALSE: This contract provision isn't really a warranty because it doesn't specify a remedy if the warranty were to be breached.
Answer:

1.10 Notices by regular mail

FACTS: Alice and Bob are entering into a contract, being drafted by Bob's lawyers. The "Notices" provision in the draft contract states: "Any notice required or permitted by this Agreement will be effective three days after being deposited in the U.S. Mail in a sealed envelope that has first-class postage affixed and is addressed to the notified party's address for notice as stated in this Agreement."
TRUE OR FALSE: In these circumstances, it'd be worthwhile to try to revise or delete this provision.
Answer:

1.11 Notarizing a document for recordation

FACTS: (1) The other side's lawyer has drafted a real-estate-related document for her client to sign and deliver to your client, which will then want you to have the document filed for recording in the deed records of a Texas county. (2) The notary certificate after the signature line reads: "Sworn and subscribed to before me, the undersigned authority," with a blank line for the notary to fill in the date.
TRUE OR FALSE: In these circumstances, it'd be worthwhile to try to revise or delete this provision.
Answer:

1.12 Material breach — "takesies"?

FACTS: (1) A contract states that breach of a certain obligation will be considered a "material" breach that will allow the other party to terminate the contract by notice. (2) The obligated party breaches the obligation, whereupon the other party duly terminates the contract and sues for damages. (3) In court, the obligated party admits its breach, but it claims that the breach wasn't material and so the other party shouldn't have terminated the contract.
TRUE OR FALSE: The breaching party might have a very difficult time persuading a court that the breach wasn't material.
Answer:

1.13 A breach that that isn't designated as "material"

FACTS: Alice and Bob are negotiating a contract. One provision in the draft contract obligates Alice to take Action A, but it doesn't state that Alice's obligation is "material."
TRUE OR FALSE: In a lawsuit arising out of the contract, Bob could still try to prove that Alice's obligation to take Action A was in fact "material" and thus that her failure to take Action A constituted a "material breach."
Answer:

1.14 Strategy for non-warranting parties


TRUE OR FALSE: IF: You're drafting a contract for your client Alice; AND: As part of the deal, Bob is to warrant something to Alice; THEN: You'll normally want to use the phrase "Bob represents and warrants," instead of just "Bob represents."
Answer:

1.15 Representations: Language

FACTS: Alice wants to sell her car to Bob. Bob wants the contract to include a representation by Alice that the car has no significant defects.
QUESTION: In most circumstances, which language below for the representation would Alice prefer?
A. Alice represents that, so far as she is aware, without any particular investigation, the car has no significant defects.
Select this:
B. Alice represents that, to her knowledge, the car has no significant defects.
Select this:
Commentary:

1.16 Time is of the essence: Injunctive relief?

FACTS: (1) Alice and Bob enter into a contract that requires Bob to deliver 1 million widgets (a generic product available from a wide variety of vendors) to Alice for a stated price at a specified time. The contract also states that time is of the essence for the delivery. (2) Bob fails to deliver the widgets on time and tells Alice he just can't do it. (3) Alice duly files suit against Bob, in a court having jurisdiction, and moves for a preliminary injunction ordering Bob to deliver the widgets.
TRUE OR FALSE: Even if Alice can prove up irreparable harm and a balance of the equities in her favor, the court is unlikely to grant Alice's motion.
Answer:

1.17 Termination of Agreement: What's left?

FACTS: You are reviewing a contract (the "Agreement") that contains a section on termination of the Agreement.
FILL IN THE BLANK: You should consider whether the Agreement should also include a|an [BLANK] provision to keep alive any provisions that your client might want to continue in effect even after termination of the Agreement, such as (for example) choice of forum, disclaimers of implied warranties, and limitations of liability.
Answer:

1.18 Employment agreement salary amount


In an employment agreement for an executive, the exective's annual salary is preferably stated as follows:
A. $X per year.
Select this:
B. A rate of $X per year.
Select this:
Commentary:

1.19 Interest at 5%

FACTS: (1) You're reviewing a draft contract for a client, Alice. The contract was drafted by Bob's lawyer. Alice is in a hurry to get the contract signed. (2) Among other things, the contract requires Alice to pay Bob for consulting services, with interest on past-due amounts at 5% until paid.
TRUE OR FALSE: In these circumstances, it'd be worthwhile to try to revise or delete this provision.
Answer:

1.20 Dry-erase pens

FACTS: (1) Alice sends Bob — both in Texas — a purchase order for dry-erase pens; the purchase order states in part that Alice has all rights and remedies available by law in case of any defect in the pens. (2) Bob doesn't sign the purchase order, but he returns a confirmation of the order, which says in part that all implied warranties are disclaimed, including the implied warranties of merchantability and fitness for particular purpose. (3) Bob ships what are supposedly dry-erase pens, together with an invoice; Alice timely pays the invoice. (4) Shortly thereafter, Alice discovers that the pens have been mislabeled and are actually permanent markers that ruin Alice's expensive whiteboard. (5) Alice sues Bob for breach of the implied warranty of merchantability. (6) Bob moves to dismiss, citing the implied-warranty disclaimer in his order confirmation.
QUESTION: How will the court likely rule on Bob's motion?
A. Granted, because under the last-shot rule, Bob's order confirmation knocked out Alice's purchase-order terms.
Select this:
B. Denied, because both parties are "merchants" and Alice sent the first document.
Select this:
C. Denied, because the conflicting terms in the parties' documents will drop out under the "knock-out rule."
Select this:

1.21 Negotiation in good faith

FACTS: (1) Alice and Bob, both living and working in the U.S., are negotiating a contract. They've agreed on all the major terms, but they can't quite reach agreement on the interest rate that is to be charged on past-due payments. They decide to "kick the can down the road" by stating in the contract that, starting 90 days later, each party will negotiate in good faith to attempt to reach agreement on the interest rate. (2) When the 90-day period is over, Bob contacts Alice to reopen negotiations about the interest rate, but Alice adamantly refuses even to discuss the matter, even after Bob threatens her with a lawsuit.
TRUE OR FALSE: Bob can recover his foreseeable, non-speculative damages resulting from Alice's breach of her agreement to negotiate in good faith.
Answer:

1.22 Agreements to agree


TRUE OR FALSE: In the U.S., an agreement to agree on something in the future will generally be enforceable.
Answer:

1.23 Letters of intent

REVISED 2017-05-02


In the U.S., which portions of a signed letter of intent ("LOI") will be binding — if any?
A. None
Select this:
B. Only those provisions that the LOI clearly specifies are binding
Select this:
C. Possibly the entire LOI if the LOI does not clearly state otherwise
Select this:
Commentary:

1.24 Conditions precedent


FILL IN THE BLANK: [BLANK] is a colloquial, one-word synonym for "condition precedent":
Answer:

1.25 Conditions precedent


FILL IN THE BLANK: [BLANK] is a colloquial, one-word synonym for "condition subsequent":
Answer:

1.26 Conspicuousness options


In the eyes of a court, for a long contract provision, which of the following might NOT suffice to satisfy a legal requirement that the provision be "conspicuous"?
A. The provision is rendered in all-caps.
Select this:
B. The entire contract is only one page long, the provision is in bold-faced type, and the provision is relatively short.
Select this:
C. The parties' lawyers negotiated the provision in question.
Select this:
Commentary:

1.27 Indemnity financial support


FILL IN THE BLANK: Alice is hiring Bob to do some work in her factory. Her draft of the contract requires Bob to indemnify Alice for any harm that might occur to any of his employees while at Alice's factory. Alice should also consider inserting a provision requiring Bob to enter into and maintain this type of ancillary contract to make sure there is a pot of money available if necessary to support Bob's indemnity obligation.
Answer:

1.28 It's late, it's late, it's late, but not too late (RIP Freddie Mercury)

FACTS: (1) It's Tuesday, May 9, 2017. Your client Alice emails you the (unprotected) Word document of a draft contract that has been prepared by Bob's lawyer. Alice says that on Monday, May 1, she and Bob agreed to the major "deal points" in the draft contract. She has looked over the draft and is satisfied that those deal points are accurately set forth, but she's not sure about certain other provisions in the draft contract. She asks if she and Bob can meet in your office late this afternoon to sign the contract. (2) The signature blocks of the contract include the term, "Date: May 1, 2017"; otherwise, you see no changes worth holding up the deal for.
QUESTION: Which of the following actions would you recommend to Alice as the MOST sensible for you to take to get the contract signed TODAY?
A. Contact Bob's lawyer and ask that he change the date-signed term and resend the Word document to you.
Select this:
B. Open the Word document; change the date-signed term to May 9; print out hard copies for signature; and email Bob's lawyer to advise that you changed the date-signed term.
Select this:
C. Print out hard copies of Bob's Word document and make a pen-and-ink change to the date-signed term, then have Alice and Bob each initial and date the change.
Select this:
D. Have Alice sign the document with the May 1 date-signed term.
Select this:
Commentary:

1.29 Baby, it's you: Most favored customer

FACTS: (1) You represent Alice, a product vendor. Alice is negotiating a long-term sales agreement with Bob, a large customer—think, Tilman Fertita in the TV show "Billion Dollar Buyer." (2) Bob's draft of the sales agreement includes a provision that: (i) represents and warrants that Alice has not given any other customer any better terms than those of the draft sales agreement, and (ii) requires Alice (x) to report to Bob any future deals in which she gives another customer better terms and (y) to give Bob, on a going-forward basis, the benefit of those better terms.
TRUE OR FALSE: In these circumstances, there's probably no need to try to revise or delete this provision.
Answer:

1.30 Reasonable reliance required

FACTS: Alice bought $1 million of widgets from Bob. She is suing him for breach of warranty and for misrepresentation because he allegedly statements about the widgets that allegedly turned out not to be true.
QUESTION: Of the following causes of action, which (if any) require Alice to prove that she reasonably relied on Bob's alleged statements?
A. Breach of warranty
Select this:
B. Misrepresentation
Select this:
C. Both A and B
Select this:

2 Shorter questions

2.1 Notice timing

Adapted from language in an actual contract: "Seller will notify Buyer at least 30 (THIRTY) days before the effective date of any price increase."
TRUE OR FALSE: This is an acceptable drafting style.
Answer:

2.2 Who is a merchant?


TRUE OR FALSE: Under the Uniform Commercial Code, both buyers and sellers can be "merchants."
Answer:

2.3 Attorney malpractice insurance: What type?


Attorney malpractice insurance is an example of a type of coverage that, in the business-insurance context, is normally referred to by this name:
A. Client liability coverage
Select this:
B. Professional liability coverage
Select this:
C. Commercial General Liability coverage
Select this:
D. Umbrella coverage
Select this:
Commentary:

2.4 Indemnitor reliability

FACTS: You represent Alice and are drafting a contract that she and Bob will enter into. The contract is to include an obligation for Bob to defend and indemnify Alice against certain third-party claims.
FILL IN THE BLANK: You should also consider including, in the contract, a requirement that Bob acquire and maintain [BLANK] to increase the chances that enough money will be available to pay for Alice's defense and indemnity.
Answer:

2.5 Indemnity: You expect me to cover THAT?


FILL IN THE BLANK: Under the law in Texas (and some other places), if a contract provision requires Alice to indemnify Bob against the consequences of Bob's own negligence, that provision must be each of these two things or it will be unenforceable:
Answer:

2.6 Amending a contract by substituting new text


FILL IN THE BLANK: An agreement can be amended by setting out the entire agreement anew, as modified; this is referred to as a|an [BLANK] agreement.
Answer:

2.7 Employment offer letters: Binding?


TRUE OR FALSE: A company's offer letter to a prospective employee could become a binding contract, depending on how the letter was worded.
Answer:

2.8 Employment offer letters: Bad form?


TRUE OR FALSE: Most lawyers prefer to draft employment agreements in the form of a conventional-style contract; such lawyers regard letter agreements as being somewhat "bad form."
Answer:

2.9 Employment offer letters: Specific requirements?


TRUE OR FALSE: In most U.S. jurisdictions, a contract drafted in the form of a letter agreement will be binding only if it meets certain specific requirements that don't apply to conventional-style contracts.
Answer:

2.10 Letter agreements


TRUE OR FALSE: A contract could be drafted in the form of a signed letter from one party to the other, to be countersigned by the other party.
Answer:

2.11 Material breach – calling it out


TRUE OR FALSE: For a contract provision to be considered "material," the contract normally must so state.
Answer:

2.12 "Acknowledge" language in a contract

FACTS: A contract between Alice and Bob states that Alice "acknowledges" Bob's Assertion X.
TRUE OR FALSE: In court, Alice might not be allowed to contest Assertion X.
Answer:

2.13 Notarizing: Two types


FILL IN THE BLANK: In the U.S., the two basic forms of "notarizing" a document are:
Answer:

2.14 Notarizing an affidavit


TRUE OR FALSE: An affidavit to be used in court will normally require an acknowledgement certificate signed by a notary public or other authorized officer.
Answer:

2.15 Notary self-help


TRUE OR FALSE: A notary public ordinarily is allowed to "notarize" a document in which he or she is also the signer of the document.
Answer:

2.16 Contract signature by outside counsel?


TRUE OR FALSE: Professor Toedt thinks it would normally be OK for outside counsel to sign contracts on behalf of a client.
Answer:

2.17 Limited partnership signature by general partner?


TRUE OR FALSE: A general partner of a limited partnership has actual authority to sign a contract on behalf of the limited partnership. 
Answer:

2.18 Limited partnership signature by limited partner?


TRUE OR FALSE: A limited partner of a limited partnership, acting in that capacity, has actual authority to sign a contract on behalf of the limited partnership. 
Answer:

2.19 Limited partnership signature through power of attorney?


TRUE OR FALSE: An individual of legal age who holds a written power of attorney from a limited partnership, authorizing that individual to sign a specific contract (or contracts generally) on behalf of the limited partnership, has actual authority to bind the limited partnership to that contract.
Answer:

2.20 Limited partnership signature by all limited partners?


TRUE OR FALSE: A power of attorney, giving someone the authority to sign a contract on behalf of a limited partnership, can be signed by all of the limited partners in lieu of being signed by a general partner.
Answer:

2.21 Limited partnership officers


TRUE OR FALSE: Under Texas law, a limited partnership can have one or more officers, who might have at least apparent authority to bind the limited partnership to a contract.
Answer:

2.22 Limited partner as limited-partnership officer


TRUE OR FALSE: An officer of a limited partnership who also owns a limited-partnership interest in the limited partnership can sign a contract on behalf of the limited partnership.
Answer:

2.23 Contract signature by inside counsel


TRUE OR FALSE: Professor Toedt thinks it would normally be OK for an in-house counsel in a company’s legal department to sign a contract on behalf of another department in the company.
Answer:

2.24 Reps and warranties: Synonyms?


TRUE OR FALSE: The terms warranty and representation are basically synonyms.
Answer:

2.25 Strategy for warranting parties

FACTS: You're drafting a contract for your client Alice; AND: As part of the deal, Alice is to warrant something to Bob.
TRUE OR FALSE: You'll normally want to use the phrase, "Alice represents and warrants," instead of just, "Alice represents."
Answer:

2.26 Warranties: Ipsissimis verbis?


TRUE OR FALSE: A contract provision can have the same legal effect as a warranty even if the provision doesn't use the word warranty.
Answer:

2.27 Passive voice problem


FILL IN THE BLANK: An apartment lease agreement states (in part): "The apartment shall be regularly serviced by a professional pest-control service." This is an example of a|an [TWO WORDS] (not "passive voice"):
Answer:

2.28 Termination of Agreement: Is that the best choice?


TRUE OR FALSE: It's generally OK for a contract to provide for termination of specific rights and obligations instead of for termination of the contract itself.
Answer:

2.29 Employment agreement salary frequency

FACTS: You're drafting an employment agreement for a salaried employee. The parties have agreed on the starting salary, and you've been instructed to put that starting salary into the agreement.
You'll want to state that the salary will be paid:
A. Monthly
Select this:
B. Biweekly
Select this:
C. Per the company’s standard payroll procedures
Select this:
Commentary:

2.30 Employment duration


In nearly all U.S. jurisdictions — unless the employer and employee agree otherwise, or a statute provides otherwise — an employee's employment by a company will be:
A. at will
Select this:
B. month-to-month
Select this:

2.31 You get what you …


FILL IN THE BLANK: You get what you [BLANK], not what you expect.
Answer:

2.32 Do, or do not; there is no try


FILL IN THE BLANK: This category of contract provision is a promise or commitment to do something, or possibly not to do something.
Answer:

2.33 If I'm wrong about this ….


FILL IN THE BLANK: This category of contract provision is a promise to pay the other party's damages (or take other specified action) if a statement about a past-, present-, or future fact proves incorrect.
Answer:

2.34 Hold harmless means what?


FILL IN THE BLANK: In most U.S. jurisdictions "hold harmless" is treated as a synonym for this type of contract term.
Answer:

2.35 Background section displaces this


FILL IN THE BLANK: This archaic introductory section of a contract has been replaced, in modern drafting, by the "Background" section.
Answer:

2.36 Maybe you can be one of us ….


FILL IN THE BLANK: This three-word phrase can be used to cause an external document to be treated as part of a contract.
Answer:

2.37 Attorney fees in Texas: Who d'ya gotta be?


FILL IN THE BLANK: Under Texas law, when a plaintiff successfully asserts a contract claim against a  defendant, if the plaintiff wishes to recover its attorney fees under Tex. Civ. Prac. & Rem. Code sec. 38.001, the defendant must be a[n] [BLANK] or a[n] [BLANK].
Answer:

2.38 Attorney fees: The American Rule


FILL IN THE BLANK: Under the so-called "American rule," this party can recover its attorney fees if it prevails in contract-related litigation if the contract does not say otherwise:
Answer:

2.39 Covenant, or condition, or something else?


Other things being equal: If a contract provision could be construed as either a covenant or a condition, a U.S. court will normally prefer to construe the provision:
A. As a covenant
Select this:
B. As a condition
Select this:
C. No preference between covenant and condition—whichever is supported by the parol evidence
Select this:

2.40 Contract interpretation: Evidence


FILL IN THE BLANK: Testimony and documents concerning the parties' course of dealing, offered in court to support a party's preferred interpretation of a contract provision, would be considered [BLANK] evidence.
Answer:

2.41 Parol evidence: When is it relevant?


FILL IN THE BLANK: In the U.S., courts generally will look to parol evidence to interpret a contract provision only if the provision is [BLANK]:
Answer:

2.42 Arising out of vs. relating to


Which version of this forum-selection language would be the broadest?
A. Any litigation arising out of this Agreement is to be brought in Houston, Texas.
Select this:
B. Any litigation arising out or relating to this Agreement is to be brought in Houston, Texas.
Select this:
C. Any litigation arising out of or relating to this Agreement or any transaction or relationship resulting from it is to be brought in Houston, Texas.
Select this:

2.43 Termination upon bankruptcy

REVISED 2017-05-02

FACTS: On behalf of your client Alice, you are reviewing a draft contract prepared by the attorney representing Bob. The draft includes the following provision: "Bob may terminate this Agreement if Alice files for protection under the bankruptcy laws."
TRUE OR FALSE: This provision will generally not be enforceable in the United States.
Answer:

2.44 Mediation of disputes – binding?


TRUE OR FALSE: Unless the parties agree otherwise, mediation is normally binding.
Answer:

2.45 Arbitration of disputes – binding?


TRUE OR FALSE: Unless the parties agree otherwise, arbitration is normally binding.
Answer:

2.46 Mnemonic: A.T.A.R.I.


FILL IN THE BLANK: What does Professor Toedt mean by "A.T.A.R.I."?
Answer:

2.47 Mnemonic: A.T.P.


FILL IN THE BLANK: What does Professor Toedt mean by "A.T.P."?
Answer:

2.48 Mnemonic: F.R.I.L.L.


FILL IN THE BLANK: What does Professor Toedt mean by "F.R.I.L.L."?
Answer:

2.49 Mnemonic: R.O.O.F.


FILL IN THE BLANK: What does Professor Toedt mean by "R.O.O.F."?
Answer:

2.50 Mnemonic: W.I.D.D.


FILL IN THE BLANK: What does Professor Toedt mean by "W.I.D.D."?
Answer:

2.51 An unrestricted right to unilaterally amend


FILL IN THE BLANK: If a contract provision gives Alice the right to unilaterally amend the contract but does not put certain limits on that right, then the entire contract might be unenforceable because it is "ill" in this way:
Answer:

2.52 Can liability for fraud be disclaimed?


FILL IN THE BLANK: An entire-agreement provision, by itself, won't preclude an aggrieved party from claiming misrepresentation unless the entire-agreement provision includes a disclaimer of this:
Answer:

2.53 Specifying the location for litigation


FILL IN THE BLANK: A drafter whose client didn't have superior bargaining power might not want to include this type of provision, stating where any litigation may (or must) take place:
Answer:

2.54 Promises to reimburse


FILL IN THE BLANK: This type of contract provision is a promise to reimburse a person for any harm the person might suffer from a stated event.
Answer:

2.55 Limitation of liability


FILL IN THE BLANK: If a drafter had is or her "thinking cap" on, he or she could draft this type of limitation of liability (A) as "one size fits all," or (B) as separate limitations for different categories of events.
Answer:

2.56 Excluded damages: Cover charges


FILL IN THE BLANK: In some vendors' contract forms, the list of excluded damages will sometimes include (that is, exclude) this category of damages, of which one of the examples in UCC art. 2-715 is "commercially reasonable charges, expenses or commissions in connection with effecting cover …."
Answer:

2.57 Representations in time


A representation is a statement about facts in this time frame:
A. Past only
Select this:
B. Present only
Select this:
C. Future only
Select this:
D. Past or present but not future
Select this:
E. Past, present, or future
Select this:
F. Present or future but not past
Select this:
G. Past or future but not present
Select this:

2.58 Reps and warranties: Who on earth would want both?


FILL IN THE BLANK: In a normal purchase-and-sale contract, this party will normally want to think about whether a particular statement should be a representation or a warranty (the other party will want it to be both).
Answer:

2.59 Semi-unique remedies for misrepresentation


FILL IN THE BLANK: In a contract case, if Alice successfully proves the elements of misrepresentation, she might be entitled to one or both of these two remedies that might not otherwise be available to her:
Answer:

2.60 Remedies: Unwinding the deal


FILL IN THE BLANK: This remedy for breach of contract — seldom granted unless the contract itself provides for it — basically "unwinds the deal."
Answer:

2.61 The 35-day month


FILL IN THE BLANK: The former CEO of software giant Computer Associates spent nearly ten years in federal prison for engaging in this "35-day month" contract-signing practice to falsify quarterly financial statements.
Answer:

2.62 Interpretation: Tie goes to the non-drafter


FILL IN THE BLANK: Under the rule of contract interpretation known by this Latin phrase, an ambiguity in a provision is resolved against the party that drafted the provision — IF other rules of interpretation don't provide a resolution.
Answer:

2.63 Apples, peaches, and pears, oh my!


FILL IN THE BLANK: Under the rule of contract interpretation known by this Latin phrase, if a contract term says "food, including apples, peaches, and pears" then a court might limit the term "food" to fruits.
Answer:

3 HTML export

[Intentionally blank]