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ENGLISH FOR LAW STUDENTS

Structure of a commercial contract

1 February 2012

By Helen Michelle Jrgensen

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COMMERCIAL CONTRACTS

Structure of a commercial contract

Handout 1: the structure and format of the contract

Handout 2: Specimen contract

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Structure of a typical commercial agreement

Objective- logical sequence easy to read

Index- clause numberings and headings, schedules

Parties

Recitals- history and background

Definitions - terms which are long and repeatedseveral times - a shorthand label

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Structure of a typical commercial agreement

Main operative clause - describes the maincomnmercial transaction

Consideration cash/non-cash

Conditions Warranties

Confidentiality

Duration and termination

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Structure of a typical commercial agreement

Miscellaneous clauses/Boilerplate

Schedules

Appendices

Exhibits

Execution blocks

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Structure of a typical commercial agreement:Recitals/Background

Recitals:

History/background

Statements of things that have already been done

Explain matters of fact which are necessary tomake the transaction understandable

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Structure of a typical commercial agreement:Recitals/Background

Use of WHEREASor BACKGROUND clause

Term of the contract or not

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Structure of a typical commercial agreement:Definitions

Terms which are long and repeated several times- a shorthand label

Location of definitions

Introductory wording: Handout 3

Layout Use of capital letters/bold

Order of definitions

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Structure of a typical commercial agreement:Boiler Plate

Handout 4

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What is Boiler Plate

Wording that can be re-used over and over withoutchange?

A template wording?

Boring legal clauses at the back of the contract?

Standard contract clauses that can be usefulwhatever the contract covers?

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What is Boiler Plate

Concerns the basic operation of the contract,rather than the commercial issues

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What is Boiler Plate

Origins in typesetting fornewspapers printing

Or in heavy industry

Legal agreements use

boilerplate clauses

Jargon

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What is Boiler Plate

The term "boiler plate" was later adopted bylawyers to describe those parts of a contract thatare "standard language"

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Examples of Boiler Plate

Further assurance

Assignment

Sub-contracting

Entire agreement

Force majeure

Notice

Governing law

Guarantees Costs

Arbitration/disputeresolution

Service of legal process

Counterparts

Illegality/severence

Waiver

Counterparts

Interpretation

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How much Boiler Plate

Core boiler plate:

Law

Jurisdiction

Dispute Resolution

Notices (?)

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How much Boiler Plate

Sometimes core:

Termination

Confidentiality

Definitions

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How much Boiler Plate

Can be useful to have:

Assignment

Interpreation (?)

Entire agreement (?)

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How much Boiler Plate

Sometimes deal specific:

Waiver

Force majeure

No agency/no partnership

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So, how much Boiler Plate

Short agreement/letter:

As little as possible

Watertight contract/no pressure to keep friendly: full scaleboiler plate (?)

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The end of the contract

Testimonialsignature blocks

Schedules and appendices