Corporate & Securities Law

?Closing?

Posted on February 22, 2010
Two stray thoughts: First, does closing mean the moment a transaction is consummated? Or does it refer to the process leading up to that moment, with contracts being finalized and signed, opinions being issued, and funds being sent whizzing through the banking system? I suggest that it means both?in other words, closing is an example of [...

New Article on the Ethics of Contract Drafting

Posted on February 19, 2010
Thanks to the Legal Writing Prof Blog, I learned of an article entitled “The Ethics of Contract Drafting.” It’s by Gregory M. Duhl, associate professor at William Mitchell College of Law. It will be appearing in the Lewis & Clark Law Review, but for those who can’t wait, it’s available on SSRN by clicking here...

A Reminder that Contracts Under Seal Are, Sadly, Still Relevant

Posted on February 19, 2010
In this January 2008 blog post I noted that the requirements for what constitutes a “contract under seal” have been relaxed to the point of ludicrousness. But I also noted that in some states whether a contract is under seal has a bearing on which statute of limitations applies...

More ?Or? Ambiguity

Posted on February 18, 2010
One of the chapters of MSCD that I sweated most over was chapter 10, “Ambiguity of the Part Versus the Whole.” Here’s the first paragraph: Use of plural nouns and the words and, or, every, each, and any can result in ambiguity. In each case, the question is whether it is a single member of a [...

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Excluding Consequential Damages Is a Bad Idea

Posted on February 15, 2010
I have in front of me a contract?it’s for the sale of goods?that contains the following provision excluding certain kinds of damages: Neither party will be responsible or held liable for any consequential, special, or incidental losses or damages...

Business Integrity Launches ContractExpress.com: Q&A with Andy Wishart, CTO of Business Integrity

Posted on February 10, 2010
Longtime readers of this site will be familiar with the name Business Integrity, developer of ContractExpress (formerly DealBuilder) document-assembly software. Fixing contract drafting involves fixing not only language but also process, and fixing the process means using document assembly...

?Specific?

Posted on February 10, 2010
When it occurs in contracts (apart from its use in the phrase specific performance), more often than not the word specific serves no purpose. Consider the following examples, which I harvested at random from the SEC’s EDGAR system: Within 60 days following such request for a review, the Plan Administrator will, after providing a full and fair [...

Update Regarding ?Fraud? and ?Intentional Misrepresentation?: Let?s Get Rid of Them!

Posted on February 06, 2010
Here are some follow-up thoughts prompted by reader Chad’s comment to my recent post on use of the couplet fraud or intentional misrepresentation in indemnification provisions. Chad suggested that although fraud includes intentional misrepresentation, at least three state courts have treated the terms fraud and intentional misrepresentation as synonyms...

General Writing or Contract Drafting: Which Is More Demanding?

Posted on February 05, 2010
Today I came upon yet another article exploring law students’ lack of basic writing skills: Aïda M. Alaka, The Grammar Wars Come to Law School, 59 J. Legal Educ. 343 (2010). (Click here to go to a pdf copy.) Professor Alaka notes that “many, if not most, legal writing instructors have been surprised by the sometimes [...

?Fraud? and ?Intentional Misrepresentation?

Posted on February 05, 2010
The other day a law-firm partner who specializes in M&A called me to discuss the terms fraud and intentional misrepresentation. He noted that it’s commonplace for both terms to be used in specifying exceptions to limits on indemnification. Here’s the sort of provision he was referring to (I haven’t attempted to clean it up): Notwithstanding the above, [...

ECC Capital Corp. Sues Law Firms for Contract-Drafting Malpractice

Posted on February 04, 2010
The following is from this article by Drew Combs on the AmLaw Daily: Latham & Watkins and Manatt Phelps & Phillips are the targets of a malpractice lawsuit filed by ECC Capital Corp., which accuses the firms of botching a deal to sell its mortgage-origination business and a subprime-loan portfolio to Bear Stearns & Co...

LTN Article on the Hidden Perils of Boilerplate

Posted on February 04, 2010
On the Law Technology News website is “The Law of Unintended E-Consequences,” an interesting article by Stanley P. Jaskiewicz, a member of the Philadelphia law firm of Spector Gadon & Rosen. It discusses how boilerplate that is easily skimmed over can end up acquiring unexpected significance...

?Proprietary?

Posted on February 03, 2010
This from reader Chris Lemens: This bugs me. I see a lot of nondisclosure agreements. A typical definition of the information protected by such an agreement includes a notion that the information is “confidential or proprietary.” The “proprietary” part just seems wrong to me...

Kicking the Tires of WestlawNext

Posted on February 01, 2010
Last week I was at West?s headquarters in Eagan, Minnesota, with a dozen or so journalists and bloggers, attending a series of presentations on WestlawNext, the next generation of Westlaw. After some five years of development, it’s being launched today...

When Is an Amendment Not an Amendment?

Posted on January 28, 2010
The following oddity from a reader: When is an amendment not an amendment? When it’s a separate agreement! From the introductory paragraph of a supplier’s attachment to another agreement: IMPLEMENTATION ASSISTANCE AMENDMENT NUMBER ONE TO BASIC LICENSE AGREEMENT NUMBER [redacted] CUSTOMER: [redacted] This Amendment, together with the terms and conditions contained int he Basic License Agreement, dated January ___, [...

What Does ?Prevailing Party? Mean?

Posted on January 27, 2010
Chadwick Busk of The Fine Print blog told me about this item on Lexology (free registration required) by Patrick T. Sharkey of Jackson Walker LLP. I hope Patrick doesn’t mind if I quote extensively from it: A recent Texas Supreme Court decision highlights the importance of thoughtful drafting...

Computer-Assisted Legal Research and the Contract Drafter

Posted on January 27, 2010
Yesterday I spent the day at West?s headquarters in Eagan, Minnesota, with a dozen or so journalists and bloggers being introduced to WestlawNext, the next generation of Westlaw. More about that next week, when WestlawNext is launched. But kicking the tires of WestlawNext caused me to consider how computer-assisted legal research is used in contract drafting...

Once More, With Feeling: Make Your Right Margins Ragged and Use One Space After Punctuation

Posted on January 23, 2010
In chapter 15 of MSCD and in this May 2007 post (which has attracted 32 comments) I explain why using ragged right margins makes word-processing documents easier to read. It’s a no-brainer?you may think that full justification looks “professional,” but typography experts are unanimously in favor of ragged right for word-processing documents...

A Voice in Favor of Ambiguity?

Posted on January 22, 2010
Via Twitter, I came across a blog post entitled “Effective Contract Drafting: A Subversive Manifesto.” It’s by William Carleton, partner at a Seattle law firm. It begins as follows: It’s always best to say what you mean as clearly and as simply as you can, right? Maybe...

D.C. Toedt?s ?On Technology Contracts? Website

Posted on January 21, 2010
If you’re the sort who routinely rummages in the entrials of commercial contracts, you might well find of interest D.C. Toedt’s website On Technology Contracts. D.C. Toedt (pronounced “Tate”) is a business lawyer with an intellectual-property and software-law background...

The Perils of Definedtermitis

Posted on January 14, 2010
“Definedtermitis” is a condition caused by excessive reliance on defined terms. It causes clogging of the arteries of your contracts. Those who succumb to it are referred to as “definedtermites.” Consider an email I received today from a reader: OK, so I thought it was a typo, but it turns out it was intentional...

When Linguists Talk About Contract Language

Posted on January 12, 2010
It’s not only transactional types who are interested in contract language. If you want to see how a different online ecosystem approaches the subject, I suggest you have a look at this post on Language Log and the related comments. I like to think that I stand somewhere between the linguists and the lawyers...

Disclaiming the Warranty of Title in Sales of Goods

Posted on January 12, 2010
Rarely do I have occasion to offer thoughts on drafting under article 2 of the Uniform Commercial Code, which applies to sales of goods. Here are two warranty disclaimers from some equipment purchase agreements I’ve been reviewing: NO OTHER WARRANTY TO CUSTOMER FROM SELLER IS EXPRESS OR IMPLIED...

?In Particular?

Posted on January 11, 2010
Today I had occasion to consider use of the phrase in particular in contracts. Here are some examples, taken from the SEC’s EDGAR system: The Company has taken all reasonable steps to maintain the confidentiality of or otherwise protect and enforce its rights in its confidential information, in particular the trade secrets owned by the Company...

Recharacterizing Representations and Pre-closing Obligations as Conditions

Posted on January 08, 2010
I’m looking for caselaw or commentary on the following issue relating to the parts of a mergers-and-acquisitions contract. If a buyer wants to address in an M&A contract circumstances that are under the seller’s control?for example, whether the seller is in good standing under Delaware law?it would make sense to do so by means of a [...

Q&A with Steven Davidoff, Author of ?Gods at War: Shotgun Takeovers, Government by Deal, and the Private Equity Implosion?

Posted on January 04, 2010
Currently on my nighttable is Gods at War: Shotgun Takeovers, Government by Deal, and the Private Equity Implosion, by Steven Davidoff. Steven is a professor at the University of Connecticut Law School (click here for his faculty bio page) and is the New York Times’s “Deal Professor...

?Guarantees That?

Posted on January 04, 2010
Today I saw the following in a contract I pulled from the SEC’s EDGAR system: SunPower hereby guarantees that, subject to Section 22, it shall supply and deliver each of the Products to the delivery point specified in a given Purchase Order (each, a Delivery Point ) on or prior to the scheduled delivery date therefor [...

The Second Edition of MSCD, One Year Out

Posted on December 31, 2009
December is when the American Bar Association tells its authors how their books did during the year that ended the previous September 30. So a couple of weeks ago I heard how the second edition of MSCD fared during the year starting just four months after its publication in July 2008...

Glenn West Reopens the ?Represents and Warrants? Can of Worms!

Posted on December 30, 2009
You may recall my September 2009 post regarding my correspondence with Glenn West on that deathless subject, the phrase representations and warranties. (If you’re new to this subject, you may want to consult this handy 558-word summary of my analysis...

?Ceteris Paribus??

Posted on December 29, 2009
A reader recently asked me about use of the phrase ceteris paribus in contracts. I was unfamiliar with this phrase?no Latin scholar I?so the first thing I did was consult Black’s Law Dictionary, which told me that ceteris paribus means “other things being equal...

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