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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