Contract Law Concepts

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Questions and Answers

What is the primary focus of a litigator when analyzing a case?

Translating the business deal into contract concepts

Applying the law to the facts to create a persuasive argument (correct)

Determining the best contract provision for a business deal

Applying the contract concepts to the business deal

What is the outcome of a litigator's analysis in a negligence case?

Creating a persuasive argument for the other party

Translating the business deal into contract concepts

Deciding whether the driver was negligent based on the facts (correct)

Determining the best contract provision for the business deal

What is the key difference between the analytical skills of litigators and deal lawyers?

Deal lawyers start from the business deal, while litigators start from the law (correct)

Litigators create persuasive arguments, while deal lawyers create contracts

Litigators work with contract concepts, while deal lawyers work with facts

Deal lawyers work backward from the law, while litigators work forward from the facts

What is the goal of a deal lawyer when drafting a contract provision?

To memorialize the business deal in a contract provision Signup and view all the answers

What are the 'facts' for a deal lawyer?

The terms of the business deal Signup and view all the answers

What is the primary analytical skill of a deal lawyer?

Translating the business deal into contract concepts Signup and view all the answers

What is the relationship between contract concepts and business deals?

Contract concepts are the building blocks of business deals Signup and view all the answers

What is the result of a deal lawyer's analysis of a business deal?

A contract provision that memorializes the business deal Signup and view all the answers

What is the primary purpose of understanding contract concepts in drafting a contract?

To clearly express the parties' business deal Signup and view all the answers

Which of the following is NOT one of the seven contract concepts?

Obligations Signup and view all the answers

What is the primary difference between a representation and a warranty?

A representation is a statement of fact, while a warranty is a promise to indemnify Signup and view all the answers

What is the relationship between a right and a covenant?

A right entitles a party to the other party's performance, which is a covenant Signup and view all the answers

What is the purpose of a condition in a contract?

To specify the circumstances under which a party is obligated to perform Signup and view all the answers

What is the primary purpose of a declaration in a contract?

To define a fact or policy for the management of the contract Signup and view all the answers

What is the primary difference between discretionary authority and a covenant?

Discretionary authority gives a party a choice or permission to act, while a covenant is a promise to do or not to do something Signup and view all the answers

Why do drafters choose from among the seven contract concepts when memorializing the business deal?

Because each concept serves a different business purpose and has different legal consequences Signup and view all the answers

Study Notes

Contract Concepts

Seven essential contract concepts: representations, warranties, covenants, rights, conditions, discretionary authority, and declarations
These concepts form the foundation of every contract, serving different business purposes with distinct legal consequences

Representations

A statement of a past or present fact made to induce a party to act
Examples: a seller's claim that a property is free of defects or a buyer's statement of their financial capability

Warranties

A promise to indemnify the other party for damages if the representation is false
Example: a seller's warranty that a property is free of defects, promising to compensate the buyer if it's not

Covenants

A promise to do or not to do something, creating a duty to perform
Example: a buyer's covenant to make regular mortgage payments

Rights

The flipside of a covenant, entitling a party to the other party's performance
Example: a buyer's right to receive the property title after fulfilling payment obligations

Conditions

A state of facts that must exist before a party is obligated to perform
Example: a buyer's obligation to purchase a property is conditional upon securing financing

Discretionary Authority

A party's choice or permission to act, sometimes subject to the satisfaction of a condition
Example: a landlord's discretionary authority to terminate a lease if the tenant breaches the agreement

Declarations

A fact agreed upon by both parties, often a definition or policy for contract management
Example: a declaration stating the property's boundaries and any easements

Translation Skill

The analytical skill of determining which contract concept best reflects the business deal
Requires the drafter to translate the business deal into contract concepts to memorialize it in a contract provision

Comparison with Litigators

Litigators take the law and apply it to the facts to create a persuasive argument
Deal lawyers start from the business deal and find the contract concepts that best reflect it

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Description

Learn about the fundamental concepts of contract law, building blocks that express the parties' business deal. Understand how to assemble them to create a contract and express provisions clearly.