Contract DraftingClass 8Thurs Feb 9

University of Houston Law Center

D. C. Toedt III

Syntactic sins

Preposition-piling“In the richness of the English language, few things can create as much mischief as piling prepositional phrase upon prepositional phrase.

The child says, ‘I saw the man on the hill with the telescope.’ Did the child use the telescope to see the man on the hill? Or did the child see a man — or even a hill — bearing a telescope?”

U.S. v. Rosales-Garcia, No. 10-4224, slip op at 16 (10th Cir. Feb. 7, 2012) (Gorsuch, dissenting)

Preposition-piling

“A newspaper headline heralds, ‘Brothers Reunited after 20 Years on a Roller Coaster.’ Did the brothers recently bump into each other at an amusement park? Or were they the long suffering experimental subjects of some evil genius?”

U.S. v. Rosales-Garcia, No. 10-4224, slip op at 16 (10th Cir. Feb. 7, 2012) (Gorsuch, dissenting)

Common contract screw-ups

Common contract screw-ups

“9. The contract that has a signature block indicating that a particular form of signature is required (eg two signatories or the use of a seal) but these requirements are ignored by the signatory.”

[From “Top 10 howlers when preparing contracts for signature,” by the IP Draughts blog at http://goo.gl/Km6Dw.]

Drafting exercise: Stark 18-5

Exercise 18-5: Legalese In the event of the failure of If the Borrower aforesaid

fails to comply with the terms any term of the aforementioned Note, the undersigned Guarantor waives [notice of acceptance of this Guaranty, diligence, presentment, notice of dishonor, demand for payment, any and all notices] of whatever kind or nature, and the exhaustion of legal remedies available to the Note’s holder.

Stark Ex. 18-5 – further thoughts

“If” clause might not be desirable Be sure what you’re deleting

Presentment ≠ notice Organize your lists sensibly (semicolons

are good) Brevity must co-exist with clarity

Stark Ex. 18-5 – further thoughts

The Guarantor waives: (i) presentment of the Note for payment; (ii) demand for pay-ment; (iii) diligence on the part of the Holder in seeking payment; (iv) the exhaustion of legal remedies available to the Holder in the event of nonpayment; and (v) all notices of any kind, including for example notice of ac-ceptance or of dishonor.

The Uniform Com-mercial Code (see Z&B pp. 219-236)

The Uniform Commercial Code

QUESTION: What is the legal status of the UCC in the United States?

A. Federal statute

B. Interstate compact

C. Template - identical in each adopting state

D. Template w/ state-by-state variations

The Uniform Commercial Code

QUESTION: What article(s) of the UCC govern(s) the sales of goods?

A. Article 1

B. Article 2

C. Article 3

D. Article 4

E. None

The Uniform Commercial Code

QUESTION: What article(s) of the UCC govern(s) the sales of services?

A. Article 1

B. Article 2

C. Article 3

D. Article 4

E. None

The Uniform Commercial Code

QUESTION: To what extent can parties to a contract agree to vary the effect of the UCC?

A. Totally

B. Not at all

C. Cannot disclaim certain obligations

D. Cannot agree to unreasonable terms

The Uniform Commercial Code

QUESTION: Are sales of water subject to the UCC? [Careful ….]

A. Yes

B. No

C. Yes in some circumstances, no in others

D. Yes in some jurisdictions, no in others

The Uniform Commercial Code

QUESTION: Are sales of software subject to the UCC? Explain why or why not.

The Uniform Commercial Code

QUESTION: What is UCITA?

BONUS QUESTION: Who was the driving force behind UCITA? [Hint: You’ve seen him]

The Uniform Commercial Code

FACTS: A contract calls for a software vend-or (i) to license a copy of its standard off-the-shelf “enterprise” software to the customer, and (ii) to allow the customer to call for tele-phone support, if needed, for one year.

QUESTION: Is this K subject to the UCC? Why or why not? (Hint: See Z&B p. 232-35)

The Uniform Commercial Code

QUESTION: Why might a customer want UCC Article 2 to apply to a contract? (Hint: See Z&B p. 235)

Dell Master Purcha-sing Agrmt (Z&B pp. 236 et seq.)See the Word document available at the Web page

End of class