Introduction to Contract Concepts

Questions and Answers

To create a persuasive argument

To sway the other party or the court

To determine the legal consequences of a business deal

To memorialize the business deal in a contract provision (correct)

The analytical skill of determining which contract concept best reflects the business deal (correct)

The analytical skill of applying the law to the facts

The negotiation skill of reaching a business deal

The persuasive skill of creating a persuasive argument

They draft contract provisions that memorialize the business deal

They determine the legal consequences of a business deal

They start from the business deal and find the contract concepts that best reflect it

They take the law and apply it to the facts to create a persuasive argument (correct)

The starting point of the analysis Signup and view all the answers

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

The business deal is translated into contract concepts Signup and view all the answers

To sway the other party or the court Signup and view all the answers

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

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

A covenant is a promise to do or not to do something, and a right is the flipside of a covenant Signup and view all the answers

To specify a state of facts that must exist before a party is obligated to perform Signup and view all the answers

A choice or permission to act, sometimes subject to the satisfaction of a condition Signup and view all the answers

A fact as to which both parties agree, generally a definition or a policy for the management of the contract Signup and view all the answers

Because they are the foundation of every contract and necessary to express the parties' business deal Signup and view all the answers

The seven contract concepts are integrated into the parts of a contract to result in a contract Signup and view all the answers

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.

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.

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.