3.4 First part of an agreement

• Part I Contract drafting: matters of style
• 1 General drafting principles
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  • 1.1 Plain English: simple and clear
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    • (a) Short sentences
    • (b) Keep subject and verb together – left-right principle
    • (c) Use the active tense and personalise sentences
    • (d) Delete unnecessary words
  • 1.2 Accuracy
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    • (a) Think analytically and draft ‘MECE’
    • (b) Examples of improved accuracy
  • 1.3 Consistency
  • 1.4 Vagueness and ambiguity
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    • (a) ‘Avoid vague terms’
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      • (i) Vague terms: reasonable
      • (ii) Vague terms: material
      • (iii) Vague terms: substantially
      • (iv) Vague terms: without undue delay
    • (b) Ambiguity
• 2 Matters of style and legal culture
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  • 2.1 Being exhaustive (US-style) or Conceptual (European style)
  • 2.2 Some considerations on contract interpretation
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    • (a) Legal cultures and determinative interpretation factors
    • (b) Statutory guidelines on contract interpretation
  • 2.3 Degrees of binding and non-binding commitments
• Part II Structure and presentation of contracts
• 3 Main contract outline
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  • 3.1 Setting up an agreement
  • 3.2 Presentation styles: European vs. US style
  • 3.3 A cover page and table of contents
  • 3.4 First part of an agreement
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    • (a) The contract title
    • (b) Definition of ‘this Agreement’
    • (c) Date
    • (d) Made or entered into
    • (e) By, between and amongst
    • (f) The contracting parties
    • (g) The parties defined
    • (h) Preamble
    • (i) Words of agreement:
  • 3.5 The body of the agreement
  • 3.6 Blank space after the body of the contract
  • 3.7 Signature blocks, seals and witnesses
  • 3.8 Aspects of signing, and initialling
  • 3.9 Notarisation, legalisation and apostilles
• 4 Structuring the transaction documents
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  • 4.1 Cross references
  • 4.2 Schedules, annexes and exhibits
• 5 Presentation: the look and feel
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  • 5.1 General matters: fonts, spacing, alignment and margins
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    • (a) About fonts: nature and legibility
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      • (i) Letter families
      • (ii) Characteristics: Helvetica, Times New Roman and Garamond
    • (b) About spacing, alignment and margins: readability
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      • (i) Line spacing
      • (ii) Alignment: justified, left aligned, right aligned
      • (iii) Margins
  • 5.2 Layout and numbering
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    • (a) Articles and sections
    • (b) Numbering
    • (c) Indentation
    • (d) Enumerations
    • (e) Bullet points
  • 5.3 Headings and captions
  • 5.4 House style rules
• Part III Drafting contracts and contract clauses
• 6 Typical drafting habits and ‘legalese’
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  • 6.1 Certain funny phrases
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    • (a) For the avoidance of doubt, …
    • (b) ‘…, as the case may be’
    • (c) The issue of ‘include’ and ‘without limitation’
    • (d) ‘Subject to…’
    • (e) ‘Notwithstanding…’
    • (f) ‘Except as otherwise agreed…’
    • (g) …provided, however, that…
    • (h) ‘…from time to time’
    • (i) ‘…not to be unreasonably withheld or delayed’
    • (j) Shall be ‘deemed’
    • (k) ‘Third parties’
    • (l) ‘Hereby’
    • (m) ‘To the maximum extent permitted by law’
    • (n) Intentionally left blank…
  • 6.2 Do’s and don’ts
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    • (a) Think first: and/or
    • (b) ‘In order to’ (avoid explanations)
    • (c) Not shall and will (but only one of them)
    • (d) ‘Said’, ‘such’ and links
    • (e) – Do not write (s) and do not use /
    • (f) ‘The same’ and ‘that certain’
    • (g) Herein, thereof, everywhereof
    • (h) ‘Mutual’ is a pleonasm
    • (i) Do not emphasise the unnecessary
    • (j) Use of ‘when’, ‘if’ and ‘to the extent that’
    • (k) Use of synonyms and hendiadyses
    • (l) Certain vague terms: without undue delay
  • 6.3 Numbers and formulae
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    • (a) Best practice rules on drafting numbers
    • (b) Drafting fractions
    • (c) Ranges of figures
    • (d) References to dates
    • (e) References to time
• 7 Definitions and contract interpretation clauses
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  • 7.1 Definitions and defined terms – best practice rules
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    • (a) Principles related to the use of defined terms in contracts
    • (b) Principles related to the place and presentation of defined terms
    • (c) Principles related to drafting the text of a definition
  • 7.2 Interpretation guidelines for standard words and phrases
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    • (a) Standard words and phrases ‘defined’
    • (b) ‘Subsidiaries’ and ‘Affiliates’
    • (c) ‘Best endeavours’ and ‘commercially reasonable efforts’
    • (d) ‘In the ordinary course of business’
    • (e) An arm’s length away
    • (f) ‘To the knowledge of…’
• 8 Particular types of clauses
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  • 8.1 Conditions, conditional clauses and triggering events
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    • (a) General observations about conditions
    • (b) Subject matters adjacent to conditions
    • (c) Best practice rules on drafting conditions – intro and overview
    • (d) Common conditions
  • 8.2 Covenants
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    • (a) Covenants vs. conditions
    • (b) Covenants in various contracts
    • (c) Covenants in M&A transactions
    • (d) Credit-facility-related covenants
    • (e) Carve-outs and baskets: exceptions to covenants
  • 8.3 Reps and warranties
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    • (a) Warranties – a quick introduction
    • (b) Statements of fact, not obligations
    • (c) Warranties, not representations and warranties
    • (d) A warranty is incorrect (or untrue), but not breached
    • (e) Smoking out the facts
    • (f) Allocation of risk
    • (g) Fitness for purpose and merchantability
    • (h) Bringing down warranties
    • (i) Survival of warranties
    • (j) Disclosures in M&A agreements
    • (k) Warranties in ordinary course business contracts
    • (l) Warranty aspects in major transactions (M&A)
  • 8.4 Limitations of liability and indemnities
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    • (a) Limitations of liability
    • (b) Indemnities
  • 8.5 Confidentiality clauses
  • 8.6 Miscellaneous (‘boilerplate’) clauses
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    • (a) Notices clause
    • (b) Amendments
    • (c) No subcontracting
    • (e) Severability
    • (f) Waivers
    • (g) Entire agreement and merger clauses
    • (h) Further assurance (duty to cooperate)
    • (i) Force majeure
    • (j) Announcements
    • (l) Independent contractors (‘no partnership established’)
    • (k) No termination or dissolution
    • (m) Time is of the essence
    • (n) No general conditions to apply
    • (o) Language (translations)
    • (p) Counterparts
    • (q) Independence of the notary
    • (s) (No) assignment
  • 8.7 Applicable law clauses
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    • (a) International nature
    • (b) Dispense with “…excluding its conflicts of law provisions”
    • (c) Exclude the applicability of the Vienna Convention?
  • 8.8 Dispute resolution provisions
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    • (a) Court or arbitration?
    • (b) Choices of court
    • (c) Arbitration or expert determination?
    • (d) Arbitration institute or ad hoc arbitration?
    • (e) Points of attention in an arbitration clause
    • (f) Mediation, dispute boards and escalation
• Part IV Miscellaneous
• 9 Contract assembly software
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  • 9.1 Contract assembly software generally
  • 9.2 Advantages of contract assembly
  • 9.3 A workflow within contract assembly applications
  • 9.4 Implementing contract assembly
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    • Leading a change to contract automation
    • Contract automation mindmap for implementation of Weagree
• 10 Drafting certain specific types of legal documents
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  • 10.1 Letter agreements and side letters
  • 10.2 Amendments, supplements and addenda
  • 10.3 Shareholder and board resolutions and powers of attorney
• Annex 1 Ten steps to a successful upgrade of your contracts
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  • (a) Step 1: Selection of contracts and scope of contract automation
  • (b) Step 2: Establishing a best practice group
  • (c) Step 3: Collecting and stripping the model contracts and precedents
  • (d) Step 4: Prioritising the model contracts
  • (e) Step 5: Establishing the procedure and setting the agenda
  • (f) Step 6: Preparing handsome proposals for discussion
  • (g) Step 7: Discussing and establishing the model building blocks
  • (h) Step 8: Determining the company’s contract house style
  • (i) Step 9: Identifying approval requirements and business access
  • (j) Step 10: Automating the documents and implementing the workflow
• Annex 2 Document marking conventions
• Annex 3 Contract drafting conventions (sample)
• Annex 4 House style rules (sample)