This document provides an overview of contracts and contracting. It defines what a contract is, gives examples of common contracts like credit card agreements and online terms of service, and outlines the basic elements of a contract including offer, acceptance, and consideration. The document explains that contracts create legally binding agreements between two or more parties and discusses important concepts like mutual obligations and promises. It also provides guidance on drafting contracts and includes common contractual terms and provisions that are often negotiated, like warranties, indemnification, and liability.
Business Law & Order - April 21, 2014 - Contracts 101
1. CONTRACTS 101
SPARK LAW & ORDER
BY
RUSS BROWN
R.D. BROWN, PLC
RDBROWN@RDBROWNLAW.CO
M
Negotiation and Drafting
2. What is a Contract
a: a binding agreement between two or more
persons or parties ; e spe cially one legally
enforceable
b: a business arrangement for the supply of
goods or services at a fixed price
-Merriam-Webster
3. Have you agreed to a contract?
How many people think they are party to a
contract?
7. Examples
Credit Card Agreement
Signed agreement related to a job
Online agreement when starting a Facebook
or email account
8. 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
9. 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
12. What does it mean to Contract?
Contracts are about:
13. What does it mean to Contract?
Contracts are about:
Bargaining
14. What does it mean to Contract?
Contracts are about:
Bargaining
Coming to an agreement
15. 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
19. Offer
An offer is an invitation to make a contract
Examples?
20. 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
21. 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…
22. 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
23. Consideration
Generally, courts will only enforce a contract if
both sides are getting something.
What each side gives the other is called
consideration.
24. Is this a contract?
In each of the following examples, ask yourself
if there is mutual consideration?
25. 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?
26. 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.
27. 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?
28. 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.
29. 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?
30. 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.
31. 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.
32. When drafting be sure to
Include all the terms
Don’t be afraid of creative solutions
Use specific binding language:
“Shall” not “Will”
X shallpay Y $10.
Y shallwash X’s car.
Not:
X willpay Y $10.
Y willwash X’s car.
33. Good Drafting Techniques
Plain Language
Include a Preamble
Offerand
Acceptance
The MirrorImage
Rule
Binding Offers
Versus Invitations
to Bargain
Revocability of
Consideration
Authorized
Representation
ProperGrammar
34. Types of University Contracts
Affiliation and
International Program
Agreements
Athletic-Specific, or
Student-Specific
Contracts (non-
procurement in nature).
Interagency Cooperation
Agreements (IAC) &
Inter-local Agreements
Museum and Exhibit
Agreements
Prof. Service
Agreements (for
individuals not organized
as a business)
Procurement Contracts;
Vendor Services
Sponsored Research
Contracts and
Sponsored Projects
University-Provided
Services
35. Major Areas within Every
Contract
Parties
Effective Date and
Terms
Statement of
Service (SOS)
Pricing
Performance
Standards
Warranties
Remedies
Risk Allocation
Boilerplate
Signatures
36. Common Contractual Terms
Three commonly negotiated/contentious
provisions:
1. Warranties
2. Indemnification [protection against loss or
liability from 3rd
party
claims]
3. Liability & Damages [legal responsibilities]