Beyond the Boilerplate

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Beyond the Boilerplate
Presented by Jay LeMoine and Christian
Petersen
March 20, 2012
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Overview

• Drafting Strategies
• Contractual Terms
• Remedies
• Survival

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Aspects of Contract and Terminology

• Clear
• Comprehensible
• Correct

• C

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Aspects of Contract and Terminology

• Critical
• Cool?...

• C

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Dreams Gone Wrong
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Clarity

• Understanding
• context
• intent
• user/reader

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Comprehensible

• Standard Language
• respecting complex concepts
• clear and comprehensible ? simple
• standard usage rather than legalese

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Comprehensible

• Loaded Language
• what do the fancy words mean?
• does the reader understand them?
• is there another way to say it?

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Comprehensible

• The Myths
• tried and true

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Correct

• Getting It Right
• precision of language
• the too hard pile
• does the right have a remedy?
• do you need a remedy?

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Correct

• Getting It Wrong
• the problem with precedents
• the tyranny of time
• the conundrum of cost

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• Key
• Contractual Concepts

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Term and Termination

• After full performance of terms
• In accordance with its terms
• Agreement between the parties
• Reasons outside the contract
• Breach

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Types of Contractual Terms

• Three types of terms
• conditions
• warranties
• innominate (or intermediate) terms

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Types of Contractual Terms

• Characterization depends on the true construction
  of the contract
• Type of term determines remedy

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Conditions

• Most important type of term
• Not conditions precedent or subsequent
• Does it go to the root of the contract?
• Breach gives right to terminate

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Warranties

• The lesser promises in the contract
• Breach does not permit termination
• must continue performing
• Innocent party has right to sue for damages

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Innominate Terms

• Classification of term cannot be done in advance
• Remedy should correspond with consequences
• Did the breach deprive of substantially the whole
  benefit?

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Identifying Conditions

• Legislatively imposed
• Expressed in contract
• Intention of parties

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The End of Fundamental Breach

• Created to address unfairness of exclusion and
  limitation of liability clauses
• Divorced from the intention of parties
• Created confusion
• Tercon

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Repudiation

• words or conduct evincing an intention not to be
  bound by the contract
• Election to treat contract at end
• Must communicate election
• Need not communicate reason/can be wrong
• Parties obligations are at an end

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Anticipatory Repudiation

• Not every anticipatory breach gives election
• Must elect soon but not immediately
• Must give notice
• May change mind - right to terminate vanishes

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Remedies for Breach of Condition

• Innocent party may
• Accept repudiation
• obligations at end
• sue for damages or
• restitution but not specific performance

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Remedies for Breach of Condition

• Affirm contract
• obligations continue
• can sue for damages and/or specific performance
• Waive breach

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Affirmation vs. Waiver

• Waiver excuses the breach
• Estoppel arguments
• Affirmation
• preserves the rights and obligations
• must be ready, willing and able to perform

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Restitution

• Innocent party can claim value of benefits
  conferred on breaching party
• non profitable contracts
• damages are unprovable
• recovery of non-monetary benefits
• Old rule required total failure of
  consideration

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Rescission

• Rescission
• voids contract
• restores parties to the position in which they
  stood before the contract was entered into often
  result of misrepresentation but can be available
  for breach of contract

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Terms that Survive the Breach

• Liquidated damages
• Entire agreement Limitation clauses
• Non-solicitation/non-competition clauses
• Confidentiality clauses
• Enforceable if contract not rescinded

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