16 Questions
What is the primary objective of a drafter when memorializing a business deal in a contract provision?
To translate the business deal into contract concepts
What is the fundamental difference between the analytical skills of litigators and deal lawyers?
Litigators focus on the law, whereas deal lawyers focus on the business deal
What is the role of a drafter in translating a business deal into contract concepts?
To identify the contract concepts that best reflect the business deal
What is the central task of a deal lawyer when drafting a contract provision?
To find the contract concepts that best reflect the business deal
What is the difference between the approach of litigators and deal lawyers when working with facts?
Litigators work with the law to create a persuasive argument, whereas deal lawyers work with the business deal to create contract provisions
What is the outcome of applying the law to the facts in a lawsuit?
A persuasive argument is created
What is the primary focus of a litigator when working on a lawsuit?
The law and its application to the facts
What is the consequence of a deal lawyer's analytical skill in contract drafting?
A contract provision is drafted that reflects the business deal
What is the primary purpose of understanding contract concepts?
To express the parties' business deal clearly and unambiguously
What is the main difference between a representation and a warranty?
A representation is a statement of fact, while a warranty is a promise to indemnify
What is the relationship between a covenant and a right?
A covenant creates a duty to perform, while a right entitles a party to the other party's performance
What is the purpose of a condition in a contract?
To specify a state of facts that must exist before a party is obligated to perform
What is discretionary authority in the context of contracts?
A choice or permission to act, sometimes subject to the satisfaction of a condition
What is the purpose of a declaration in a contract?
To establish a fact or policy for the management of the contract
What is the relationship between the seven contract concepts and the parts of a contract?
The seven contract concepts are integrated into the parts of a contract
What is the benefit of understanding the seven contract concepts in more depth?
It enables you to learn how to assemble them to create a contract and express a contract provision clearly and unambiguously
Study Notes
Understanding Contract Concepts
- There are seven essential contract concepts: representations, warranties, covenants, rights, conditions, discretionary authority, and declarations.
- These concepts form the foundation of every contract and are used to express the parties' business deal.
Defining Contract Concepts
- A representation is a statement of a past or present fact, made as of a moment in time to induce a party to act.
- A warranty is a promise to indemnify the other party for any damages suffered if the statement in the representation is false.
- A covenant is a promise to do or not to do something, creating a duty to perform.
- A right is the flipside of a covenant, entitling a party to the other party's performance.
- A condition is a state of facts that must exist before a party is obligated to perform.
- Discretionary authority gives a party a choice or permission to act, sometimes subject to the satisfaction of a condition.
- A declaration is a fact as to which both parties agree, often a definition or a policy for the management of the contract, and may be subject to the satisfaction of a condition.
Translating the Business Deal into Contract Concepts
- Each contract concept serves a different business purpose and has different legal consequences.
- The analytical skill of determining which contract concept best reflects the business deal is called the translation skill.
- This skill requires drafters to look at each specific agreement of the business deal and translate it into contract concepts.
- The analytical skill of deal lawyers differs from that of litigators, as deal lawyers start from the business deal and use contract concepts to draft contract provisions, whereas litigators work backward from the law to a static set of facts.
Learn the fundamental building blocks of contracts, including the seven essential contract concepts. Understand how to assemble and express them to create a contract.
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