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Spring 2013
6364 Contract Drafting - TOEDT- 18673
Added 4-27-12

Professor(s): D.C. Toedt III. (ADJUNCT)

Credits: 3

Course Areas: Business and Commercial Law 

Time: 10:30a-12:00p  TThLocation: 215  TU2

Course Outline: The goal of this course is to help students prepare for a type of assignment they will likely see throughout their careers: that of drafting, reviewing, analyzing, explaining, and negotiating contracts. Students will:
• explore various legal- and business issues that might need to be addressed in various types of contract (see the list below);
• study principles of plain-English drafting for contracts and other legal documents;
• review the etiquette and ethics of contract negotiations;
• survey some legal pitfalls that could lead to jail time for both clients and lawyers, such as backdating contracts, violating antitrust laws, failing to comply with Sarbanes-Oxley Act obligations, paying off foreign officials, etc.
• discuss how to tactfully advise clients (and supervising lawyers) about their options, so as to earn a reputation as a deal-maker, not a deal-breaker;
• compare and contrast the roles of outside- versus in-house counsel in contract negotiations;
• consider ways of positioning the client for future litigation, just in case.

The types of contract to be studied will include some or all of:
• employment agreements for employees and executives
• lease agreements
• distribution agreements
• services agreements
• license agreements
• stock-option agreements
• change-of-control agreements for employees and executives
• arbitration agreements
• settlement agreements
• merger agreements
• letters of intent / memoranda of understanding

As in past years, the course will include several presentations by panels of experienced local lawyers about specific types of contracts, with ample opportunity for Q&A.

A business background is helpful but not required; all necessary business information will be covered in class and/or in reading materials.


ONE HALF of the final grade will be based on (straightforward) written homework problems, which must be turned in on time except with prior approval from the instructor. Some homework problems will be graded carefully for content, while others will be graded on a "turned in / not turned in" basis (which is which will be announced in advance). Homework will generally be discussed in class, often in small groups.

EXAMPLE OF HOMEWORK PROBLEM:

FACTS:
(a) Supplier and Manufacturer — both are Texas corporations doing business in Houston — previously entered into a written master purchase agreement. Under that agreement, Supplier fulfills any purchase orders that Manufacturer submits for electronic components (we’ll call them “widgets”), which Manufacturer incorporates into a line of products that it makes and sells.
(b) The master purchase agreement contains a warranty that each batch of widgets, as delivered, will meet certain written specifications, which are attached as an exhibit to the agreement.
(c) On August 15, 20X2, Manufacturer discovers that a large batch of widgets delivered on July 1, 20X2 is defective. The widgets have already been incorporated into Manufacturer’s products; it costs Manufacturer several hundred thousand dollars to do the “re-work” for those products.
QUESTION: If the master purchase agreement is silent as to the limitation period, what is the deadline for Manufacturer to bring suit against Supplier for breach of warranty? Hint: Compare UCC § 2 725 with Tex. Civ. Prac. & Rem. Code §§ 16.004 and 16.051.
VARIATION: The master purchase agreement between Supplier and Manufacturer requires any lawsuit for breach to be brought within 12 months after the cause of action accrues. QUESTION: Does your answer change? Hint: See Tex. Civ. Prac. & Rem. Code § 16.070.
VARIATION: The master purchase agreement requires Manufacturer to give Supplier notice of any defect in a batch of widgets within 60 days after delivery, otherwise Manufacturer is deemed to have waived any claim of breach of warranty. QUESTION: Does your answer change? Hint: See Tex. Civ. Prac. & Rem. Code § 16.071.
VARIATION: Supplier is a service provider, not a widget maker, and the master purchase agreement is instead a master services agreement. QUESTION: Does your answer change?



Course Syllabus:

Course Notes: This course will be taught by Adjunct Professor D.C. Toedt, III. (His last name is pronounced "Tate.") Quota = 20  

Prerequisites:  

First Day Assignments:

Final Exam Schedule: Take home      

This course will have:
Exam:
Paper:

Satisfies Skills Course Requirement: No
Satisfies Senior Upper Level Writing Requirement: No