NEW YORK BRIDGE THE GAP
DAY ONE AND TWO Prepared in connection with a Continuing Legal Education course presented NSTITUTE at New York County Lawyers’ Association, 14 Vesey Street, New York, NY th th I scheduled for July 12 and July 19 , 2013
Program Faculty:
Natalie Sulimani, Sulimani & Nahoum, PC; Eric Engelhardt, CPA, CFP; CLE Marisa Floriani, Thomson Reuters; Jon Pressment, Haynes and Boone, LLP; Richard Grayson, Law Offices of Richard E. Grayson; Vincent Martorana, Reed Smith LLP; Beth Shapiro, Shapiro, Beilly & Aronowitz, LLP; David Pikus, Bressler, Amery & Ross, P.C.; Danny Mizrahi, Contango IT NYCLA
This course has been approved in accordance with the requirements of the New York State Continuing Legal Education Board for a maximum of 16 Transitional and Non-Transitional credit hours; 6 Skills; 7 Professional Practice; 3 Ethics. This program has been approved by the Board of Continuing Legal education of the Supreme Court of New Jersey for 16 hours of total CLE credits. Of these, 3 qualify as hours of credit for ethics/professionalism, and 0 qualify as hours of credit toward certification in civil trial law, criminal law, workers compensation law and/or matrimonial law. ACCREDITED PROVIDER STATUS: NYCLA’s CLE Institute is currently certified as an Accredited Provider of continuing legal education in the States of New York and New Jersey.
Information Regarding CLE Credits and Certification New York Bridge the Gap July 12th and 19th, 2013; 9:00 AM to 4:30 PM
The New York State CLE Board Regulations require all accredited CLE providers to provide documentation that CLE course attendees are, in fact, present during the course. Please review the following NYCLA rules for MCLE credit allocation and certificate distribution.
i. You must sign-in and note the time of arrival to receive your course materials and receive MCLE credit. The time will be verified by the Program Assistant.
ii. You will receive your MCLE certificate as you exit the room at the end of the course. The certificates will bear your name and will be arranged in alphabetical order on the tables directly outside the auditorium.
iii. If you arrive after the course has begun, you must sign-in and note the time of your arrival. The time will be verified by the Program Assistant. If it has been determined that you will still receive educational value by attending a portion of the program, you will receive a pro-rated CLE certificate.
iv. Please note: We can only certify MCLE credit for the actual time you are in attendance. If you leave before the end of the course, you must sign-out and enter the time you are leaving. The time will be verified by the Program Assistant. Again, if it has been determined that you received educational value from attending a portion of the program, your CLE credits will be pro-rated and the certificate will be mailed to you within one week.
v. If you leave early and do not sign out, we will assume that you left at the midpoint of the course. If it has been determined that you received educational value from the portion of the program you attended, we will pro-rate the credits accordingly, unless you can provide verification of course completion. Your certificate will be mailed to you within one week.
Thank you for choosing NYCLA as your CLE provider!
New York County Lawyers’ Association Continuing Legal Education Institute 14 Vesey Street, New York, N.Y. 10007 • (212) 267-6646
New York Bridge the Gap July 12th and July 19th, 2013 9:00AM – 4:30PM
AGENDA
July 12th:
9:00 AM – 10:40 AM WestLaw Next Marisa Floriani, Thomson Reuters
10:50 AM – 12:30 PM Cyberspace Issues and the Law Natalie Sulimani, Sulimani & Nahoum, P.C. Danny Mizrahi, Contango IT
12:30 PM – 1:00 PM LUNCH
1:00 PM - 2:40 PM How to Protect Your Law License: Tax and Risk Management for Attorneys Eric Engelhardt, CPA, CFP
2:50 PM – 4:30 PM Deposition Practice Jon Pressment, Haynes & Boone, LLP
New York Bridge the Gap July 12th and July 19th, 2013 9:00AM – 4:30PM
AGENDA
July 19th:
9:00 AM – 10:40 AM Avoiding Common Ethical Pitfalls Richard Grayson, Law Offices of Richard E. Grayson
10:50 AM – 12:30 PM Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider Vincent Martorana, Reed Smith LLP
12:30 PM – 1:00 PM LUNCH
1:00 PM – 2:40 PM The Everyday Practice of Law Beth Shapiro, Shapiro, Beilly & Aronowitz, LLP
2:50 PM – 4:30 PM Overview of Matrimonial Practice David Pikus, Bressler, Amery & Ross Continuing Legal Education Institute 14 Vesey Street, New York, N.Y. 10007
New York Bridge the Gap July 12th and July 19th, 2013
COURSE MATERIALS
Section
WestLaw Next 1 Marisa Floriani, Thomson Reuters
Cyberspace Issues and the Law 2 Natalie Sulimani, Sulimani & Nahoum, PC Danny Mizrahi, Contango IT (including materials excerpted from CLE lecture given by Natalie Sulimani, Sulimani & Nahoum, PC, and Raj Goel, Brainlink)
How to Protect Your Law License: Tax and Risk Management for Attorneys 3 Eric Engelhardt, CPA, CFP
Deposition Practice 4 Jon Pressment, Haynes and Boone LLP (materials excerpted from CLE lecture given by Ron Katter, The Law Offices of Ron Katter)
Avoiding Common Ethical Pitfalls 5 Richard Grayson, Law Offices of Richard E. Grayson
Fundamental Concepts in Drafting Contracts 6 Vincent Martorana, Reed Smith LLP
The Everyday Practice of Law 7 Beth Shapiro, Shapiro, Beilly & Aronowitz, LLP
Overview of Matrimonial Practice (Separate Handout) David Pikus, Bressler, Amery & Ross, P.C.
Legal Research on WestlawNext NYCLA – July 12, 2013
AGENDA
I. Brief History of Westlaw A. West, the publishing company B. West Editorial Enhancements 1. Case synopsis 2. Headnotes 3. Topic and Key Numbers 4. Editorial scrutiny C. Development of the WestlawNext platform 1. West Search a. 100+ years of editorial analysis of the law b. Emulating best practices of legal researchers c. West Key Number System – the foundation of West Search d. KeyCite e. West Secondary Sources II. Introduction to Legal Research on WestlawNext A. Logging In B. Home Page Overview 1. Global Search Box a. Plain Language Searching b. Terms and Connectors c. Citations d. Key Cite e. Find a database 2. Folder 3. Favorites 4. Frequently Used Items C. Plain Language Searching 1. How it differs from Westlaw Classic a. Based on Key Cite, Key Numbers, Document Linking, Customer Usage Patterns b. No need to choose a database c. Can choose jurisdiction 2. Overview Page a. Most relevant sampling from 14 content sets b. Related Documents c. Narrow 1) Left-side of screen shows filtering options 2) Options change depending on content set 3. Viewing a document a. KeyCite integration b. Tabs c. Toolbar d. New Functions 1) Folders 2) Highlighting 3) Add notes 4) Copy with reference 5) Eye glasses D. Advanced Searching on WestlawNext 1. What is advanced search? 2. Why run an advanced search? 3. Advantages of using advanced search 4. How to run an advanced search a. Advanced search link b. Global search bar E. Browsing to Content 1. Topical research F. Favorites 1. Adding content to your favorites 2. Searching from your favorites III. Key Number System A. WestSearch integration B. When to start your research with the West Key Number System C. How to access the West Key Number System 1. Search for Key Numbers 2. Browse 3. Link IV. Statutory & Regulatory Research on WestlawNext A. Retrieving a statute – by citation, TOC, index, popular name table B. Viewing a statute 1. Toolbar – section arrows, TOC 2. KeyCite 3. Notes of Decisions 4. KeyCite Integration 5. Tabs V. Dockets & News A. Global search bar or Advanced search link B. Create WestClip Alerts to monitor company, individual, industry activity VI. Transactional Tools A. Forms – text forms, checklists, clauses, official PDF forms B. Sample Agreements VI. Research Trail A. Automatically saved for 1 year B. Automatically have trail emailed to you at log-off VII. Folders A. Saved for lifetime of your subscription B. Automatic KeyCite updates C. Share VIII. Mobile Devices A. App for iPad and iPhone B. Mobile site for android phones To get started: www.next.westlaw.com WestlawNext 7/11/2013
A BRIEF HISTORY OF WESTLAW
Where does all the information come from?
John B. West
UNDERSTANDING WEST EDITORIAL ENHANCEMENTS Case Synopsis Headnotes Topic & Key Numbers Editorial Scrutiny
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4 Marisa Floriani
Marisa Floriani graduated from Albany Law School in 2010 and has worked in various plaintiff’s personal injury litigation firms. Most recently, she was an attorney at Belluck & Fox litigating real estate appraisal fraud cases. In April 2013, she started at Thomson Reuters as an Account Representative.
Current
• Account Representative at Thomson Reuters Westlaw
Past
• Attorney at Belluck & Fox
• Associate at Douglas & London, P.C.
• Summer associate at Belluck & Fox
Education
• Albany Law School of Union University
• Lafayette College
• University of Oxford
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Personal information is any piece of information that relates to a living, identifiable human being. People’s names, contact details, financial, health, purchase records: anything that you can look at and say “this is about an identifiable person”.
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Danny Mizrahi
Company: Contango IT
Company Full Service IT Consulting Service and Support. Our specialties: Cloud Computing, description Networking, Cabling, Backup, Security, Website Development, ISP/VOIP Implementation and : more!!
Email: [email protected]
Work 2127370608
Description
I began my professional career at the age of 14 when working as a runner on the NYMEX trading floor. I improved my business knowledge by taking summer jobs in different fields, with technology and business management always being a common denominator. At the Univ. of MD, College Park, I joined the Prof. Business Fraternity, Delta Sigma Pi, where I was the Founder/CEO of two businesses. After college I was an Account Exec, and very soon after, the Director of Sales & Marketing for an established IT Consulting Firm. From there I soon realized that I can do this business better, more honest, more efficiently and with better technologies. That is when my partner and I created Contango IT, where we always want to gain higher levels of success for ourselves, our company and our clients
Eric J. Engelhardt,, a graduate of American University with a BSBA in Accounting and Business, CPA, CFP®, has been advising clients for over 30 years in the areas of Taxation, Business and Financial Management. Over the years, Eric has developed a specialty in negotiating extremely successful Tax Case Settlements against the IRS and States through creative legal Tax Strategies.
As a member in good standing of the NYS Society of CPAs since 1979, a Certified Financial Planner Practitioner CFP® - member of the CFP Board of Standards and member of the National Association of Tax Professionals, Eric J. Engelhardt has demonstrated high integrity and dramatic tax savings results in dealing with the IRS.
Eric J. Engelhardt CPA, CFP® Tax Problem Specialist
One Irving Place Manhattan, N.Y. 10003
200 Broad Hollow Rd Ste 207 Melville, N.Y. 11747 ______
Office Tel.: (631) 495-4929
Nationwide Tax Help Line: (800) 687-8701 E-mail address: [email protected]
7/11/2013
WINNING DEPOSITIONS/EBT’s
Presenter, Ronald J. Katter Katter Law Firm 228 East 45th Street, Suite 1700 New York, New York 10017 tel.: (212)‐809‐4293
Winning EBT’s
What is an EBT? Sworn, verbal, on‐the‐record, questioning by the parties’ attorneys of parties and non‐party witnesses In New York State proceedings, deposition = Examination Before Trial = EBT EBT’s are controlled by: NY Civil Practice Laws and Rules §§ 3106‐3117 and Uniform Rules for New York State Trial Courts at Part 221 (22 N.Y. CRR § 221).
Purposes of an EBT
• Possibly most important part of any litigation • Probably the only opportunity for an attorney to evaluate a witness’ credibility and predict strength at trial • What would a judge or juror think of witness’ testimony? • Most likely, the only chance a party will have to testify • To establish plaintiff’s prima facie case. • To establish defenses and to diminish damages.
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EBT Uses
• At trial to impeach a witness • When a witness can’t testify at trial. See CPLR §3117 • In dispositive and discovery motion practice • Settlement negotiations
When are EBT’s conducted?
• On notice or pursuant to order • 20 days written notice • See sample notice • Usually need a Preliminary Conference Order • Priority CPLR §3106
Where are EBT’s held?
County where party resides or has an office County where action is pending against a public corporation (municipalities, public authorities) at it’s attorney’s office ‐ CPLR §3110. In the courthouse, attorney's office or court reporter's office
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ATTORNEY EBT PREPARATION
• Know every relevant document in your case file. • Know the law of your case and parties’ positions • West’s New York Pattern Jury Instructions
Client prep
What are their objectives? What are adversaries objectives? NO joking, sarcasm, guessing, explaining, volunteering KISS You’ll be there to protect their interests Practice Q&A
EBT EXHIBITS
Which photos/or documents are to be Exhibits Review them No conclusions, judgments, opinions Specific questions…specific answers No new documents
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Questions, Objections
Except for privileged or confidential material, all objections preserved for trial Witness must answer most questions When necessary seek court ruling Bumpus v. N.Y.C. Transit Authority, 3512/07, Decided 4/28/09, (Sup. Queens, Miller, J.), NYLJ, 5/5/09, p. 27.
POST‐EBT PRACTICE
Exchange transcript Read Sign? 60 days to sign and correct, if necessary CPLR § 3116.
Do’s Don’ts
Be early Don’t remember/know Confirm Redundant questions Prep client ahead of time Answer incorporation Prepare an outline Harass the witnesses Anticipate issues Stick to a script Listen Cut off witness Object Ask unknowns KISS
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5 Ron Katter, Esq., The Law Offices of Ronald Katter
“THE USUAL STIPS”
STIPULATIONS
IT IS HEREBY STIPULATED AND AGREED by and between(among) counsel for the respective parties hereto, that:
All rights provided by the C.P.L.R., including the right to object to any question, except as to form, or to move to strike any testimony 'at this(these) examination(s), are reserved, and, in addition, the failure to object to any question or to move to strike any testimony at this(these) examination(s) shall not be a bar or waiver to make such motion at, and is reserved for the trial of this action;
IT IS FURTHER STIPULATED AND AGREED by and between(among) counsel for the respective parties hereto, that this(these) examination(s) may be sworn to by the witness(es) being examined, before a Notary Public other than the Notary Public before whom this(these) examination(s) was (were) begun; but. the failure to do so, or to return the original of this(these) examination(s) to counsel, shall not be deemed a waiver of the rights provided by Rules 3116 and 3117 of the C.P.L.R., and shall be controlled thereby;
IT IS FURTHER STIPULATED AND AGREED by and between(among) counsel for the respective parties hereto, that this(these) examination(s) may be utilized for all purposes as provided by the C.P.L.R.;
IT IS FURTHER STIPULATED AND AGREED by and between(among) counsel for the respective parties hereto, that the filing and certification of the original of this(these) examination(s) shall be and the same hereby are waived;
IT IS FURTHER .STIPULATED AND AGREED by and between(among) counsel for the respective parties hereto, that a copy of the within examination(s) shall be furnished to counsel representing the witness(es) testifying, without charge.
IT IS FURTHER STIPULATED AND AGREED by and between(among) counsel for. the respective parties hereto, that all rights provided by the C.P.L.R., and Part 221 of the Uniform Rules for the Conduct of Depositions, including the right to object to any question, except as to form, or to move to strike any testimony at this examination is reserved; and in addition, the failure to object to any question or to move to strike any testimony at this examination shall not be a bar or waiver to make such motion at, and is reserved to, the trial of this action.
Ron Katter, Esq., The Law Offices of Ronald Katter
Depositions: Relevant Statutes and Court Rules
Uniform Rules for N.Y.S. Trial Courts
PART 221. UNIFORM RULES FOR THE CONDUCT OF DEPOSITIONS (22 N.Y.C.R.R. §221)
§221.1 Objections at Depositions
(a) Objections in general. No objections shall be made at a deposition except those which, pursuant to subdivision (b), (c) or (d) of Rule 3115 of the Civil Practice Law and Rules, would be waived if not interposed, and except in compliance with subdivision (e) of such rule. All objections made at a deposition shall be noted by the officer before whom the deposition is taken, and the answer shall be given and the deposition shall proceed subject to the objections and to the right of a person to apply for appropriate relief pursuant to Article 31 of the CPLR.
(b) Speaking objections restricted. Every objection raised during a deposition shall be stated succinctly and framed so as not to suggest an answer to the deponent and, at the request of the questioning attorney, shall include a clear statement as to any defect in form or other basis of error or irregularity. Except to the extent permitted by CPLR Rule 3115 or by this rule, during the course of the examination persons in attendance shall not make statements or comments that interfere with the questioning.
Added Part 221 Oct. 1, 2006
§221.2 Refusal to answer when objection is made
A deponent shall answer all questions at a deposition, except (i) to preserve a privilege or right of confidentiality, (ii) to enforce a limitation set forth in an order of a court, or (iii) when the question is plainly improper and would, if answered, cause significant prejudice to any person. An attorney shall not direct a deponent not to answer except as provided in CPLR Rule 3115 or this subdivision. Any refusal to answer or direction not to answer shall be accompanied by a succinct and clear statement of the basis therefor. If the deponent does not answer a question, the examining party shall have the right to complete the remainder of the deposition.
§221.3 Communication with the deponent
An attorney shall not interrupt the deposition for the purpose of communicating with the deponent unless all parties consent or the communication is made for the purpose of determining whether the question should not be answered on the grounds set forth in section 221.2 of these rules and, in such event, the reason for the communication shall be stated for the record succinctly and clearly. Ron Katter, Esq., The Law Offices of Ronald Katter
Civil Practice Law and Rules
Rule 3106. Priority of depositions; witnesses; prisoners; designation of deponent. (a) Normal priority. After an action is commenced, any party may take the testimony of any person by deposition upon oral or written questions. Leave of the court, granted on motion, shall be obtained if notice of the taking of the deposition of a party is served by the plaintiff before that party's time for serving a responsive pleading has expired. (b) Witnesses. Where the person to be examined is not a party or a person who at the time of taking the deposition is an officer, director, member or employee of a party, he shall be served with a subpoena. Unless the court orders otherwise, on motion with or without notice, such subpoena shall be served at least twenty days before the examination. Where a motion for a protective order against such an examination is made, the witness shall be notified by the moving party that the examination is stayed. (c) Prisoners. The deposition of a person confined under legal process may be taken only by leave of the court. (d) Designation of deponent. A party desiring to take the deposition of a particular officer, director, member or employee of a person shall include in the notice or subpoena served upon such person the identity, description or title of such individual. Such person shall produce the individual so designated unless they shall have, no later than ten days prior to the scheduled deposition, notified the requesting party that another individual would instead be produced and the identity, description or title of such individual is specified. If timely notification has been so given, such other individual shall instead be produced.
Rule 3107. Notice of taking oral questions. A party desiring to take the deposition of any person upon oral examination shall give to each party twenty days' notice, unless the court orders otherwise. The notice shall be in writing, stating the time and place for taking the deposition, the name and address of each person to be examined, if known, and, if any name is not known, a general description sufficient to identify him or the particular class or group to which he belongs. The notice need not enumerate the matters upon which the person is to be examined. A party to be examined pursuant to notice served by another party may serve notice of at least ten days for the examination of any other party, his agent or employee, such examination to be noticed for and to follow at the same time and place.
Rule 3110. Where the deposition is to be taken within the state. A deposition within the state on notice shall be taken: 1. when the person to be examined is a party or an officer, director, member or employee of a party, within the county in which he resides or has an office for the regular transaction of business in person or where the action is pending; or 2. when any other person to be examined is a resident, within the county in which he resides, is regularly employed or has an office for the regular transaction of business in person, or if he is not a resident, within the county in which he is served, is regularly employed Ron Katter, Esq., The Law Offices of Ronald Katter
or has an office for the regular transaction of business in person; or 3. when the party to be examined is a public corporation or any officer, agent or employee thereof, within the county in which the action is pending; the place of such examination shall be the office of any of the attorneys for such a public corporation or any officer, agent or authorized employee thereof unless the parties stipulate otherwise. For the purpose of this rule New York city shall be considered one county.
Rule 3111. Production of things at the examination. The notice or subpoena may require the production of books, papers and other things in the possession, custody or control of the person to be examined to be marked as exhibits, and used on the examination. The reasonable production expenses of a non-party witness shall be defrayed by the party seeking discovery.
Rule 3112. Errors in notice for taking depositions. All errors and irregularities in the notice for taking a deposition are waived unless at least three days before the time for taking the deposition written objection is served upon the party giving the notice.
Rule 3113. Conduct of the examination. (a) Persons before whom depositions may be taken. Depositions may be taken before any of the following persons except an attorney, or employee of an attorney, for a party or prospective party and except a person who would be disqualified to act as a juror because of interest in the event or consanguinity or affinity to a party: 1. within the state, a person authorized by the laws of the state to administer oaths; 2. without the state but within the United States or within a territory or possession subject to the jurisdiction of the United States, a person authorized to take acknowledgments of deeds outside of the state by the real property law of the state or to administer oaths by the laws of the United States or of the place where the deposition is taken; and 3. in a foreign country, any diplomatic or consular agent or representative of the United States, appointed or accredited to, and residing within, the country, or a person appointed by commission or under letters rogatory, or an officer of the armed forces authorized to take the acknowledgment of deeds. Officers may be designated in notices or commissions either by name or descriptive title and letters rogatory may be addressed "To the Appropriate Authority in (here name the state or country)." (b) Oath of witness; recording of testimony; objections; continuous examination; written questions read by examining officer. The officer before whom the deposition is to be taken shall put the witness on oath and shall personally, or by someone acting under his direction, record the testimony. The testimony shall be recorded by stenographic or other means, subject to such rules as may be adopted by the appellate division in the department where the action is pending. All objections made at the time of the examination to the qualifications of the officer taking the deposition or the person recording it, or to the manner of taking it, or to the testimony presented, or to the conduct of any person, and any other objection to the proceedings, shall be noted by the officer upon the deposition and the deposition shall proceed subject to Ron Katter, Esq., The Law Offices of Ronald Katter
the right of a person to apply for a protective order. The deposition shall be taken continuously and without unreasonable adjournment, unless the court otherwise orders or the witness and parties present otherwise agree. In lieu of participating in an oral examination, any party served with notice of taking a deposition may transmit written questions to the officer, who shall propound them to the witness and record the answers. (c) Examination and cross-examination. Examination and cross-examination of deponents shall proceed as permitted in the trial of actions in open court. When the deposition of a party is taken at the instance of an adverse party, the deponent may be cross-examined by his own attorney. Cross-examination need not be limited to the subject matter of the examination in chief. (d) The parties may stipulate that a deposition be taken by telephone or other remote electronic means and that a party may participate electronically. The stipulation shall designate reasonable provisions to ensure that an accurate record of the deposition is generated, shall specify, if appropriate, reasonable provisions for the use of exhibits at the deposition; shall specify who must and who may physically be present at the deposition; and shall provide for any other provisions appropriate under the circumstances. Unless otherwise stipulated to by the parties, the officer administering the oath shall be physically present at the place of the deposition and the additional costs of conducting the deposition by telephonic or other remote electronic means, such as telephone charges, shall be borne by the party requesting that the deposition be conducted by such means.
Rule 3114. Examination of witness who does not understand the English language. If the witness to be examined does not understand the English language, the examining party must, at his own expense, provide a translation of all questions and answers. Where the court settles questions, it may settle them in the foreign language and in English. It may use the services of one or more experts whose compensation shall be paid by the party seeking the examination and may be taxed as a disbursement.
Rule 3115. Objections to qualification of person taking deposition; competency; questions and answers. (a) Objection when deposition offered in evidence. Subject to the other provisions of this rule, objection may be made at the trial or hearing to receiving in evidence any deposition or part thereof for any reason which would require the exclusion of the evidence if the witness were then present and testifying. (b) Errors which might be obviated if made known promptly. Errors and irregularities occurring at the oral examination in the manner of taking the deposition, in the form of the questions or answers, in the oath or affirmation, or in the conduct of persons, and errors of any kind which might be obviated or removed if objection were promptly presented, are waived unless reasonable objection thereto is made at the taking of the deposition. (c) Disqualification of person taking deposition. Objection to the taking of a deposition because of disqualification of the person by whom it is to be taken is waived unless made before the taking of the deposition begins or as soon thereafter as the disqualification becomes known or could be discovered with reasonable diligence. Ron Katter, Esq., The Law Offices of Ronald Katter
(d) Competency of witnesses or admissibility of testimony. Objections to the competency of a witness or to the admissibility of testimony are not waived by failure to make them before or during the taking of the deposition, unless the ground of the objection is one which might have been obviated or removed if objection had been made at that time. (e) Form of written questions. Objections to the form of written questions are waived unless served in writing upon the party propounding the questions within the time allowed for serving succeeding questions or within three days after service.
Rule 3116. Signing deposition; physical preparation; copies. (a) Signing. The deposition shall be submitted to the witness for examination and shall be read to or by him or her, and any changes in form or substance which the witness desires to make shall be entered at the end of the deposition with a statement of the reasons given by the witness for making them. The deposition shall then be signed by the witness before any officer authorized to administer an oath. If the witness fails to sign and return the deposition within sixty days, it may be used as fully as though signed. No changes to the transcript may be made by the witness more than sixty days after submission to the witness for examination. (b) Certification and filing by officer. The officer before whom the deposition was taken shall certify on the deposition that the witness was duly sworn by him and that the deposition is a true record of the testimony given by the witness. He shall list all appearances by the parties and attorneys. If the deposition was taken on written questions, he shall attach to it the copy of the notice and written questions received by him. He shall then securely seal the deposition in an envelope endorsed with the title of the action and the index number of the action, if one has been assigned, and marked "Deposition of (here insert name of witness)" and shall promptly file it with, or send it by registered or certified mail to the clerk of the court where the case is to be tried. The deposition shall always be open to the inspection of the parties, each of whom is entitled to make copies thereof. If a copy of the deposition is furnished to each party or if the parties stipulate to waive filing, the officer need not file the original but may deliver it to the party taking the deposition. (c) Exhibits. Documentary evidence exhibited before the officer or exhibits marked for identification during the examination of the witness shall be annexed to and returned with the deposition. However, if requested by the party producing documentary evidence or on exhibit, the officer shall mark it for identification as an exhibit in the case, give each party an opportunity to copy or inspect it, and return it to the party offering it, and it may then be used in the same manner as if annexed to and returned with the deposition. (d) Expenses of taking. Unless the court orders otherwise, the party taking the deposition shall bear the expense thereof. (e) Errors of officer or person transcribing. Errors and irregularities of the officer or the person transcribing the deposition are waived unless a motion to suppress the deposition or some part thereof is made with reasonable promptness after such defect is, or with due diligence might have been, ascertained.
Ron Katter, Esq., The Law Offices of Ronald Katter
Rule 3117. Use of depositions. (a) Impeachment of witnesses; parties; unavailable witness. At the trial or upon the hearing of a motion or an interlocutory proceeding, any part or all of a deposition, so far as admissible under the rules of evidence, may be used in accordance with any of the following provisions: 1. any deposition may be used by any party for the purpose of contradicting or impeaching the testimony of the deponent as a witness; 2. the deposition testimony of a party or of any person who was a party when the testimony was given or of any person who at the time the testimony was given was an officer, director, member, employee or managing or authorized agent of a party, may be used for any purpose by any party who was adversely interested when the deposition testimony was given or who is adversely interested when the deposition testimony is offered in evidence; 3. the deposition of any person may be used by any party for any purpose against any other party who was present or represented at the taking of the deposition or who had the notice required under these rules, provided the court finds: (i) that the witness is dead; or (ii) that the witness is at a greater distance than one hundred miles from the place of trial or is out of the state, unless it appears that the absence of the witness was procured by the party offering the deposition; or (iii) that the witness is unable to attend or testify because of age, sickness, infirmity, or imprisonment; or (iv) that the party offering the deposition has been unable to procure the attendance of the witness by diligent efforts; or (v) upon motion or notice, that such exceptional circumstances exist as to make its use desirable, in the interest of justice and with due regard to the importance of presenting the testimony of witnesses orally in open court; 4. the deposition of a person authorized to practice medicine may be used by any party without the necessity of showing unavailability or special circumstances, subject to the right of any party to move pursuant to section 3103 to prevent abuse. (b) Use of part of deposition. If only part of a deposition is read at the trial by a party, any other party may read any other part of the deposition which ought in fairness to be considered in connection with the part read. (c) Substitution of parties; prior actions. Substitution of parties does not affect the right to use depositions previously taken. When an action has been brought in any court of any state or of the United States and another action involving the same subject matter is afterward brought between the same parties or their representatives or successors in interest all depositions taken in the former action may be used in the latter as if taken therein. (d) Effect of using deposition. A party shall not be deemed to make a person his own witness for any purpose by taking his deposition. The introduction in evidence of the deposition or any part thereof for any purpose other than that of contradicting or impeaching the deponent makes the deponent the witness of the party introducing the deposition, but this shall not apply to the use of a deposition as described in paragraph two of subdivision (a). At the trial, any party may rebut any relevant evidence contained in a deposition, whether introduced by him or by any other party.
Ron Katter, Esq., The Law Offices of Ronald Katter
§ 3130. Use of interrogatories. 1. Except as otherwise provided herein, after commencement of an action, any party may serve upon any other party written interrogatories. Except in a matrimonial action, a party may not serve written interrogatories on another party and also demand a bill of particulars of the same party pursuant to section 3041. In the case of an action to recover damages for personal injury, injury to property or wrongful death predicated solely on a cause or causes of action for negligence, a party shall not be permitted to serve interrogatories on and conduct a deposition of the same party pursuant to rule 3107 without leave of court. 2. After the commencement of a matrimonial action or proceeding, upon motion brought by either party, upon such notice to the other party and to the non-party from whom financial disclosure is sought, and given in such manner as the court shall direct, the court may order a non-party to respond under oath to written interrogatories limited to furnishing financial information concerning a party, and further provided such information is both reasonable and necessary in the prosecution or the defense of such matrimonial action or proceeding.
RONALD J. KATTER
Since 1991, Ron Katter has successfully represented injured consumers in NYC’s five boroughs and the surrounding counties. He has achieved substantial financial recoveries for his clients in slip and fall, automobile, mass transit, professional malpractice and wrongful death case. Ron is an accomplished litigator with significant trial and appeals experience in both the state and federal courts. He is committed to obtaining the largest possible compensation permitted by law for his injured clients.
Ron Katter is also dedicated to raising the caliber of the practice of personal injury law and teaches other attorneys the art of trial advocacy and personal injury practice. He frequently lectures on different aspects of personal injury practice and on law firm management and marketing at bar associations and for other continuing legal education providers.
Ron is the Chair of the New York County Lawyers Association’s Tort Section and was Co-Chair of its Solo and Small Firm Practice Committee from 2002-2007. He was a Delegate to the New York State Bar Association House of Delegate’s (NYSBA’s governing body) from 2004-2007.
Ron is admitted to practice law in New York, Massachusetts and Washington, D.C.; the U.S. District Courts, Southern and Eastern Districts of New York; U.S. Court of Appeals for the Second Circuit; and the U.S. Supreme Court.
Ron is a member of the American Association for Justice, New York State Trial Lawyers Association, New York State Bar Association, Bronx Bar Association, Brooklyn Bar Association, and the New York County Lawyers Association.
He earned a J.D. at Boston University School of Law and a B.A. at the University of Pennsylvania.
PRO BONO:
Arbitrator, Small Claims Court, Civil Court of the City of New York, Small Claims Court, 1993-2000
COMMUNITY SERVICE:
• Trustee and Chair, Legal Committee, Scarsdale Synagogue, Tremont Temple, 2006-Present • Member, School Board Nominating Committee Edgemont Union Free School District, 2004-2006
Jonathan D. Pressment [email protected]
Jonathan Pressment is a partner in the Business Litigation practice group in New York. His experience includes the representation of numerous Fortune 500 companies in a variety of complex civil litigation matters. Jonathan has extensive experience in all aspects of case commencement, discovery, motion practice and trial practice in commercial litigation matters. In
addition, Jonathan has experience as lead trial and appellate counsel for Partner clients in matters pending before both Federal and state courts including matters before the United States Court of Appeals for the Second Circuit and the New York State Court of Appeals. Areas of Practice ● Litigation/Trial Jonathan's experience covers an array of practice areas, including breach of Practice contract disputes, intellectual property, civil liberties, securities related ● Intellectual Property litigation, professional liability, entertainment law, products liability, ● Bankruptcy and bankruptcy litigation and cases involving allegations of commercial fraud. Insolvency Litigation ● Sports Law Jonathan frequently lectures in the areas of witness preparation, successful ● Media and First management of litigation teams in large commercial matters and legal Amendment ethics, and is regularly asked to provide demonstrations of trial techniques New York at beginner and advanced trial advocacy workshops. 30 Rockefeller Plaza 26th Floor Selected Client Representations New York, New York 10112 ● Representation of the National Football League in connection with its T +1 212.918.8961 F +1 212.884.9561 defense of a putative class action alleging claims of breach of contract and fraud against the NFL and the Dallas Cowboys arising out of Super Education Bowl XLV. ● J.D., Tulane ● Appointed to serve as Special Counsel to James W. Giddens as Trustee University Law for the SIPC Liquidation of MF Global, Inc. School, 1997, cum laude, Order of the ● Representation of a Big Four accounting firm in an accountant liability Barristers; Justice action. Tulane University Moot Court Board; ● Representation of the SIPC Trustee in a multimillion dollar liquidation of Winner Phelps a defunct brokerdealer engaged in fraudulent securities trading Dunbar Senior Trial activities. Competition; Winner ATLA National Trial ● Representation of Krispy Kreme Doughnut Corporation in termination of Competition franchise litigation in federal court in which a preliminary injunction was (Regional); Semi obtained to protect Krispy Kreme's intellectual property rights. Finalist ATLA National ● Representation of the five county bar associations of New York City in Trial Competition (National Finals). suit against the Mayor of New York, the City of New York and the ● A.B., American Mayor's Criminal Justice Coordinator regarding New York City's system Civilization, Brown for the provision of indigent defense services. University, 1994, with ● Representation of an international software manufacturer in a trade honors. secret and antitrust action. Bar Admissions ● Representation of a Fortune 500 media company in a breach of contract ● New York suit against the purchaser of a former affiliate. Court Admissions ● ● U.S. Court of Appeals Representation of beverage distribution company in breach of contract for the Second Circuit action regarding distribution agreement. ● U.S. District Court for ● Representation of the manufacturer of steam turbine engines in a multi the Southern District billion dollar commercial fraud and breach of contract action. of New York ● U.S. District Court for ● Representation of insured in a multimillion dollar products liability the Eastern District of action. New York ● Representation of television producers in breach of contract action brought by news division of one of the big four television networks.
● Representation of individual claimant in a Section 1983 action and three week jury trial in federal district court regarding violations of constitutional rights arising from allegations of insufficient medical care.
Publications
● "The Tenant's Remedies For A Landlord's Breach Of Its Obligations To Provide Security," CoAuthor, The Commercial Property Lease Vol. II: Allocating Risk, Controlling Use, Tenant’s Rights and Landlord’s Remedies. (Patrick A. Randolph, Jr. ed., ABA Section of Real Property, Probate and Trust Law 1997).
Firm Overview | New York Ethics Attorney | Richard E. Grayson Page 1 of 2
New York Legal Ethics Attorney
Richard E. Grayson is a New York attorney ethics lawyer, representing judges and lawyers who are investigated or charged with professional misconduct or unethical practices.
Mr. Grayson worked for the Ninth Judicial District Grievance Committee in White Plains from 1978 to 1982 before entering private practice. The Law Office of Richard E. Grayson provides ethics and professional responsibility counsel and representation to members of the New York bench and bar.
His firm serves many lawyers and judges in the First Department (Manhattan and Bronx counties) and the Second Department (Suffolk, Nassau, Brooklyn [Kings], Queens, Staten Island [Richmond], Westchester, Rockland, Orange, Putnam and Dutchess counties), providing defense in grievance committee and judicial misconduct proceedings. He also counsels attorneys about ethical issues, writes ethics opinions, testifies as an expert witness at disciplinary hearings, and represents legal consultants who are charged with ethics violations, persons seeking admission to the New York bar, TOPICS and attorneys seeking reinstatement to practice. Lawyer Ethics & Responsibility Judicial Ethics & Responsibility Mr. Grayson is a member of the Association of Professional Responsibility Lawyers (the national organization of grievance defense counsel) and serves on the New York State Bar Association Lawyer Discipline & Case Histories Committee on Professional Discipline. He is a member of the New Rochelle, White Plains and New Judicial Discipline & Case Histories York State Bar Associations. Lawyer Reinstatement & Case Histories Bar Admission & Case Histories He is AV rated by Martindale-Hubbell and is listed in "The New York Area's Best Lawyers 2012 Edition" under the category of "Ethics and Professional Responsibility Law."
Mr. Grayson is admitted to practice in the following courts: New York State; United District Courts WHITE PLAINS OFFICE for the Eastern, Southern, Northern and Western Districts of New York; United States Supreme 202 Mamaroneck Avenue, Third Floor Court. White Plains, New York 10601 Richard E. Grayson is certified by the New York State Continuing Legal Education Board to teach Phone: 914.682.0037 two different ethics courses to attorneys. In this capacity, Mr. Grayson has been a speaker at more Fax: 914.684.0646 than 150 continuing legal education events for both lawyers and judges. He has presented ethics E-Mail Contact Form courses at the invitation of the following organizations: BAR ASSOCIATIONS American Bar Association New York State Bar Association Westchester County Bar Association Association of Arbitrators (Small Claims Part) Civil Court of the City of New York Association of Black Lawyers of Westchester County, Inc. Columbian Lawyers Association, First Judicial Department Columbian Lawyers Association of Nassau County, Inc. Columbian Lawyers Association of Westchester County Columbian Lawyers Association of Rockland County Dutchess County Bar Association Eastchester Bar Association Mamaroneck-Harrison-Larchmont Bar Association Mid-Hudson Bankruptcy Bar Association Mount Vernon Bar Association National Legal Aid & Defenders Association Student Legal Services Section New Rochelle Bar Association Northern Westchester Bar Association Ossining Area Bar Association Port Chester-Rye Bar Association Putnam County Bar Association Rockland County Bar Association Suffolk County Criminal Bar Association Yonkers Lawyers Association Yorktown Bar Association
LAW FIRMS Arent Fox , LLP Davis Polk & Wardwell Fein, Such, Kahn, Shepard, PC Finkelstein & Partners, LLP Herzfeld & Rubin, P.C.
http://www.richardgraysonesq.com/firm-overview.php 7/11/2013 Firm Overview | New York Ethics Attorney | Richard E. Grayson Page 2 of 2
Kasowitz, Benson, Torres & Friedman, LLP Morrison Cohen LLP Patterson Belknap Webb & Tyler LLP Proskauer Rose, LLP Ruskin, Moscou, Faltischek, PC Skadden, Arps, Slate, Meagher & Flom, LLP Warshaw Burstein Cohen Schlesinger & Kuh, LLP Windels, Marx, Lane & Mittendorf, LLP
TITLE COMPANIES, BANKS & MISCELLANEOUS New York State Office of Court Administration Benchmark Title Agency, LLC Bruce A. Payne Associates, Inc. Chicago Title Insurance Company Citibank, N.A. C.L.E. Abstract Services, Inc. Clearview Title Agency, LLC Commonwealth Land Title Insurance Company Esquire Bank Fidelity National Title Insurance Company of New York First American Title Insurance Company of New York First Republic Bank Half Moon, LLC Judicial Title Insurance Agency LLC PFC Title Insurance Agency, Ltd. Statewide Abstract Corp. Stewart Title Insurance Company TitleVest Agency, Inc.
Mr. Grayson also assists buyers and sellers of residential and commercial real estate with their transactions in Westchester County and surrounding counties.
Pro Bono and Community Involvement Mr. Grayson serves as a judge for the Westchester County Bar Association high school mock trial competition and a volunteer arbitrator for the New Rochelle City Court and the Better Business Bureau. He is a National Trip Leader for the Sierra Club, and has received the Adirondack Stewardship Award from the New York State Department of Environmental Conservation.
Richard E. Grayson is also the manager – and first baseman – for the New Rochelle Bar Association softball team.
For defense in grievance and misconduct proceedings, or for general ethics advice and lawyer counseling, contact the Law Offices of Richard E. Grayson today.
Law Offices of Richard E. Grayson New York Ethics & Professional Responsibility Litigation Attorney 202 Mamaroneck Avenue Third Floor White Plains, NY 10601 Phone: 914.682.0037 Fax: 914.684.0646 Email
The Law Offices of Richard E. Grayson represents lawyers and judges against charges of professional misconduct or ethics violations, and counsels bar applicants and attorneys about ethical issues. The firm serves attorneys and judges in the First and Second Departments and throughout New York State.
The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own situation.
Copyright 2012 The Law Offices of Richard E. Grayson. All Rights Reserved.
http://www.richardgraysonesq.com/firm-overview.php 7/11/2013
Richard E. Grayson is a graduate of Boston University and Brooklyn Law School.
Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
July 12, 2013
Presented by for Vincent R. Martorana New York County Lawyers Association Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
This presentation and the supplemental materials related to this presentation (this presentation and such materials, collectively, the “Materials”) are intended to constitute a continuing legal education course and are intended for an audience of attorneys. Neither the Materials, nor any portion thereof, is intended for any other purpose or for anyone other than an attorney. Neither the Materials nor any portion thereof constitutes legal advice. Neither the Materials nor any portion thereof is permitted to be distributed without the express written consent of Vincent R. Martorana.
2 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
Summary of Presentation: What this Presentation Covers
• Preliminary Matters • The Framework of a Contract Legal Drafting vs. Preamble Conversation/Prose Recitals Writing ** Body • Definitions The Importance of • Language of Language Signature Pages Performance • Obligations and Preferences in Prohibitions Contract Drafting • Discretionary Language • Language of Declaration Practical • Legal Archaisms • Language of Policy Considerations
3 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
Summary of Presentation: What this Presentation does NOT Cover
• The law* • The structure of any agreement in particular (e.g., asset purchase agreements, stockholders’ agreements, license agreements, etc.) – rather, it deals with how to express concepts in contracts generally • The drafting process (e.g., integration of comments from multiple sources) • Certain advanced/specifically nuanced drafting concepts. • Using drafting skills in connection with negotiations (e.g., “negotiating through the document,” how to use vagueness and ambiguity to your advantage)
* To the extent that this presentation is required to cover the law in order for attorneys to obtain CLE credit, this presentation is deemed to cover the law. 4 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
Preliminary Matters
• Legal Drafting vs. Conversation/Prose Writing
• The Importance of Language
• Preferences in Contract Drafting
• Practical Considerations
5 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
Preliminary Matters > Legal Drafting vs. Conversation/Prose Writing
• Forget common sense
Example: If my wife wants me to take out the garbage each week, “Vincent, you’re responsible for taking out the garbage” should do the trick. You get the idea – I take out the garbage each week, it gets picked up, I bring the garbage cans back in and I do it all over again in advance of the next scheduled pick-up.
6 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
Preliminary Matters > Legal Drafting vs. Conversation/Prose Writing Vincent, you’re responsible for taking out the garbage. But as an attorney, if I wanted to poke holes in the deal, I could ask: • What day and time during the week do I take out the garbage? • Can I take out the garbage only once, or is this an ongoing obligation? • Can I let the garbage pile up for a year and then take it out? • Do I need to take out all of the garbage in the house, or just some of it? • Does the garbage need to be bagged? Can I just throw a half-eaten chicken wing on the front porch? • Can I sub-contract my garbage-taking-out responsibilities to my daughter?
• …and what exactly constitutes “garbage” anyway?
7 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
Preliminary Matters > Legal Drafting vs. Conversation/Prose Writing Vincent, you’re responsible for taking out the garbage. Written in lawyer speak… “No later than 6 a.m. New York time each Monday and Thursday (and no earlier than 7 p.m. each Sunday and Wednesday, respectively), Vincent shall: (i) place all Garbage on the interior of the house on the premises (the “House”) in trash bags (any such trash bag into which Garbage has been placed, a “Trash Bag”); (ii) seal and place each Trash Bag in one of the garbage cans located on the exterior of the House (any such garbage can into which a Trash Bag has been placed, a “Garbage Can”); and (iii) thereafter place each Garbage Can no more than one inch south of the curb of the sidewalk relating to the premises and between one and seven feet west of the driveway on the premises. Vincent shall place all Garbage Cans on the east side of the House (and adjacent thereto) as of 6 a.m. New York time each Tuesday and Friday. Vincent’s obligations under this paragraph are personal in nature and, as such, are not assignable or delegable in whole or in part. “Garbage” means rubbish, as determined by Christine in her sole discretion.”
8 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
Preliminary Matters > Legal Drafting vs. Conversation/Prose Writing
• The point is, forget “you-get-the-idea” drafting. Forget “contract-as-a-mere-guidebook” drafting. If you want to make a contract tight and less subject to uncertainty and multiple interpretations, ask the questions and plug the holes. Otherwise: The law will plug the holes for you* Your adversary will plug the holes for you It will be unclear what rule will apply, or whether different rules apply in different contexts
* e.g., “public policy” and “fairness” doctrines. 9 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
Preliminary Matters > The Importance of Language
“A contract is only as good as your ability to successfully enforce it in court.”
But let’s consider how “good” a contract might be in the context of a counterparty considering whether or not to comply with a term of the contract….
10 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
Preliminary Matters > The Importance of Language
“A contract is only as good as your counterparty’s perception of your ability to successfully enforce it in court.”
11 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
Preliminary Matters > The Importance of Language
“A contract is only as good as your counterparty’s perception that you will seek to and successfully enforce it in court.”
12 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
Preliminary Matters > The Importance of Language
“A contract is only as good as your counterparty’s perception that you will seek to and successfully enforce it in court” PLUS “your counterparty’s assessment of any damage to its reputation should you seek to [and successfully] enforce it in court.”
13 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
Preliminary Matters > The Importance of Language
“A contract is only as good as your counterparty’s perception that you will seek to and successfully enforce it in court” PLUS “your counterparty’s assessment of any damage to its reputation should you seek to [and successfully] enforce it in court.” PLUS “any sense of moral obligation that your counterparty might have in performing its obligations under the contract.”
14 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
Preliminary Matters > The Importance of Language
The upshot: Language matters!* (ex ante and ex post) Ambiguous vs. Clear Vague vs. Certain Straightforward vs. Complex Superfluous vs. Tight Burdensome vs. Easy to Comply With
* Language matters even if it is unenforceable! 15 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
Preliminary Matters > Preferences in Contract Drafting Some general preferences in contract drafting are listed below. Note that an “improvement” in one characteristic might result in a “decline” in other characteristics.
• * Unambiguous is better than Ambiguous • Concision is better than Redundancy • Predictability is better than Uncertainty • Plain English is better than Jargon • Precision might or might not be better than Vagueness • Consistency is better than Inconsistency • Straightforward is better than Confusing
16 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
Preliminary Matters > Practical Considerations
• Law as a backdrop/basis for provisions • Reliance on forms (a blessing and a curse) • Know your audience For this presentation, we will assume that sophisticated business people and attorneys are your audience • Detail vs. Generality (Will too much of good thing spoil the deal?) • Holding the pen vs. reacting • Integrating comments • * Universal drafting “rules” vs. good practice vs. your own style • For more junior attorneys, start developing good drafting habits now so you can easily implement them going forward Quickly draft a tight agreement when you’re holding the pen Spot and exploit drafting weaknesses in opposing counsel’s draft
17 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
Preliminary Matters > Practical Considerations
Useful Resources for Learning/Improving Drafting Skills
• A Manual of Style for Contract Drafting (Second Edition), Kenneth A. Adams (2008)
• The Structure of M&A Contracts, Kenneth A. Adams (2011)
• Garner on Language and Writing, Bryan A. Garner (2009) – more generalized concepts (including writing skills for litigators)
• Negotiating and Drafting Contract Boilerplate, Tina L. Stark (Ed.) (2003) – For the intersection between law and contract language
• Annotated forms
• Successive “redlines” of a document
• Board resolutions
• Due diligence materials
• Experience
18 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
The Framework of a Contract
• Preamble • Recitals • Body Definitions Language of Performance Obligations and Prohibitions Discretionary Language Language of Declaration
Representations and Warranties
Acknowledgements Language of Policy • Signature Pages
19 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
The Framework of a Contract > Preamble
Example: This ASSET PURCHASE AGREEMENT (this “Agreement”), dated as of August 17, 2012, is made by and between Big Bad Corporation, a Delaware corporation (the “Buyer”), and Little Guy, LLC, a New York limited liability company (the “Seller” and, collectively with the Buyer, the “Parties”).
• Type of agreement • Date of agreement • Parties to agreement (including jurisdiction of organization and entity type) • Save descriptive relationships between the parties for the recitals or the body of the contract (e.g., the representations and warranties)
20 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
The Framework of a Contract > Recitals
• Describe background; give the reader context • Set up defined terms
Example: A. The Seller is engaged as a going concern in the business of designing, manufacturing, marketing, distributing, and selling paper clips (such business, the “Business”); • Can serve as evidence of intent and help to resolve ambiguity (but there’s not going to be any ambiguity in contracts that you draft, right?)
21 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
The Framework of a Contract > Recitals
• Do not put operative provisions (e.g., language of performance, representations, or obligations) in recitals
A. The Parties desire to amend the Loan Agreement in order to, among other things, extend the maturity date of the Loan to December 31, 2012.
A. The Parties hereby amend the Loan Agreement to extend the maturity date of the Loan to December 31, 2012.
A. The Parties shall take such actions as are necessary to implement the terms of this Agreement.
22 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
The Framework of a Contract > Recitals
• Immediately after the recitals, there is typically a lead-in stating that the parties are agreeing to what follows.
NOW, THEREFORE, in consideration of the premises and the respective covenants, representations, warranties and undertakings of the parties hereinafter set forth, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:
The Parties hereby agree as follows:
23 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
The Framework of a Contract > Body
• Definitions • Language of Performance • Obligations and Prohibitions • Discretionary Language • Language of Declaration Representations and Warranties Acknowledgements • Language of Policy
24 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
The Framework of a Contract > Body > An Initial Thought
An Initial Thought: The Who? What? When? Where? How? Why? Hierarchy
25 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
The Framework of a Contract > Body > An Initial Thought
The Associate shall deliver the Indispensable Who? What? memo to the Partner. …promptly; no later than 3pm When? on Tuesday…
Sometimes the …at the meeting; at the subject of Where? Partner’s office… vagueness …by walking it to the Partner’s How? office; by email… …in order to “hit the ground Irrelevant? Why? running”; because the memo is really important…Does it matter?
26 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
The Framework of a Contract > Body > Definitions
Definitions
27 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
The Framework of a Contract > Body > Definitions Lots of power in defined terms! 1. A. The Seller is engaged as a going concern in the business of designing, manufacturing, marketing, distributing, and selling paper clips (such business, the “Business”).
2(a). The Company shall not sell or distribute (each of the foregoing, a “Transfer”) the Shares. 2(b). The Company shall not sell, assign, pledge, encumber, hypothecate, distribute (as a dividend or otherwise), transfer, or otherwise dispose of (each of the foregoing, a “Transfer”) the Shares.
3. “Attorney” means an attorney, a legal assistant, a chef, or any individual residing in the state of New York.
28 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
The Framework of a Contract > Body > Definitions “Stacking” defined terms
This STOCKHOLDERS’ AGREEMENT (this “Agreement”) is made as of August 17, 2012, by and among Example & Co., Inc., an Idaho corporation (the “Company”), those holders of the Company’s Series A Preferred Stock listed on Exhibit A (the “Series A Holders”), those holders of the Company’s Series B Preferred Stock listed on Exhibit B (the “Series B Holders” and, collectively with the Series A Holders, the “Preferred Stockholders”), and those holders of the Company’s common stock that are listed on Exhibit C (the “Common Stockholders” and, collectively with the Preferred Stockholders and those persons that become a party to this Agreement in accordance with the terms hereof, the “Holders”). The Holders and the Company are collectively referred to herein as the “Parties”.
29 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
The Framework of a Contract > Body > Definitions Defining “on site” vs. Defining in a “Definitions” Provision Defining “On site” “Transfer” has the meaning set forth in Section 2.3. … Section 2.3. The Company shall not sell, assign, pledge, encumber, hypothecate, distribute (as a dividend or otherwise), transfer, or otherwise dispose of (each of the foregoing, a “Transfer”) the Shares.
Definitions Provision “Transfer” means, with respect to a given asset, any sale, assignment, pledge, encumbrance, hypothecation, distribution (as a dividend or otherwise), transfer, or other disposition of such asset. When used as a verb, “Transfer” has a correlative meaning. … Section 2.3. The Company shall not Transfer the Shares.
30 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
The Framework of a Contract > Body > Definitions If defining a term “on site,” make sure it is clear which text a definition relates to Section 1.1. Johnny shall sell apples to Eve in accordance with Section 1.2 and shall sell oranges to Adam in accordance with Section 1.3 (any such sale, a “Required Sale”).
There’s ambiguity as to whether a Required Sale includes sales to Adam only, or includes sales to Eve and sales to Adam.
Section 1.1. Johnny shall sell apples to Eve in accordance with Section 1.2 and shall sell oranges to Adam in accordance with Section 1.3 (any such sale to Eve or Adam, as the case might be, a “Required Sale”). OR Section 1.1. Johnny shall sell apples to Eve in accordance with Section 1.2 and shall sell oranges to Adam in accordance with Section 1.3. “Required Sale” means any sale described in this Section 1.1.
31 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
The Framework of a Contract > Body > Definitions It’s ok to….. •…use the lowercase term as part of a definition “Transfer” means any transfer, sale, pledge, hypothecation, encumbrance, or other disposition. “Permitted Automobile” means any automobile that is permitted on the Long Island Expressway, including, without limitation, my old 1983 Pontiac Firebird. •…use other defined terms within a definition “Law” means any constitution, law, statute, treaty, rule, directive, requirement, regulation, Order, or any rules or regulations of any self-regulatory organization. “Order” means any order, writ, judgment, injunction, decree, determination, or award, in each case that is issued by a Governmental Entity. “Governmental Entity” means any court, administrative agency, commission, or other governmental authority or instrumentality, domestic or foreign, federal, state, or local.
A “Law” therefore includes, e.g., any injunction issued by a foreign administrative agency.
32 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
The Framework of a Contract > Body > Definitions …but do not…
•…embed obligations within a definition “Net Earnings Statement” means a statement of the Company’s net earnings during the Post-Closing Period in the form attached as Exhibit A, which the Company shall provide to the Seller no later than 30 days after the last day of the Post-Closing Period.
BETTER TO BREAK IT UP AS FOLLOWS: “Net Earnings Statement” means a statement of the Company’s net earnings during the Post-Closing Period in the form attached as Exhibit A. … Section 2.4. No later than 30 days after the last day of the Post-Closing Period, the Company shall provide the Net Earnings Statement to the Seller.
33 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
The Framework of a Contract > Body > Definitions …and do not…
•…simply use “includes” “Permitted Automobile” includes, without limitation, my old 1983 Pontiac Firebird.
•…use more than one term for the same definition Verbiage Co., a Delaware corporation (“Verbiage” or the “Company”), is a subsidiary of the Parent.
•…use “shall” to define a term “Securities Act” shall mean the Securities Act of 1933, as amended.
34 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
The Framework of a Contract > Body > Language of Performance
Language of Performance
35 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
The Framework of a Contract > Body > Language of Performance
• Deals with actions being taken by the parties by virtue of entering into a contract • Think: “hereby”
• Use the active voice, not the passive voice The License is hereby granted to the Licensee by the Licensor. The Licensor hereby grants the License to the Licensee.
36 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
The Framework of a Contract > Body > Language of Performance Some examples Language of Performance Obligations • The Licensor hereby • The Licensor shall grants to the Licensee grant to the Licensee a a non-exclusive non-exclusive worldwide license to worldwide license to use the Product. use the Product. • The Buyer hereby • The Buyer shall assumes the Assumed assume the Assumed Liabilities. Liabilities.
37 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
The Framework of a Contract > Body > Obligations and Prohibitions
Obligations and Prohibitions
38 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
The Framework of a Contract > Body > Obligations and Prohibitions Obligations • What a party has to do pursuant to a contract • Think: “shall”
Prohibitions • What a party is prohibited from doing pursuant to a contract • Think: “shall not”
39 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
The Framework of a Contract > Body > Obligations and Prohibitions Examples: • The Purchaser shall pay the Purchase Price to the Seller at the Closing. • Each of Moses and his constituents shall not covet his respective neighbor’s wife. • The Presenter shall not use any fancy visual effects when transitioning between slides.
40 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
The Framework of a Contract > Body > Obligations and Prohibitions > “shall” vs. “will” vs. “must”
“shall” vs. “will” vs. “must”
41 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
The Framework of a Contract > Body > Obligations and Prohibitions > “shall” vs. “will” vs. “must”
“Shall” “hereby has/have a duty to”
The Purchaser shall wire the Purchase Price to the Seller. = The Purchaser hereby has a duty to wire the Purchase Price to the Seller.
42 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
The Framework of a Contract > Body > Obligations and Prohibitions > “shall” vs. “will” vs. “must”
Do NOT use “shall” unless you want to create an obligation.*
* Avoid the temptation of using “shall” as a proxy for “…and I really mean it!” This Agreement shall constitute the entire agreement of the Parties with respect to the subject matter hereof.
43 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
The Framework of a Contract > Body > Obligations and Prohibitions > “shall” vs. “will” vs. “must”
• “Will” is sometimes used to create an obligation. The Purchaser will wire the Purchase Price to the Seller.
• But “will” can also convey futurity, whereas “shall” (in ordinary parlance) is an awkward choice (unless you’re King Arthur).
Davey hereby bets Lou that the Mets will win the World Series this year. Davey hereby bets Lou that the Mets shall [i.e., hereby have a duty to] win the World Series this year. In fact, Davey just lost the bet!
44 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
The Framework of a Contract > Body > Obligations and Prohibitions > “shall” vs. “will” vs. “must”
• “Must” means “is/are required to.” This could arguably be used as an alternative to “shall” to impose an obligation. The Purchaser must wire the Purchase Price to the Seller.
• But “must” really asserts that a duty merely exists, not that it derives from the provision in which it is used. If companies must [are required to] pay an excise tax on the Product of 20% or less pursuant to applicable law, then Newcomer Co. shall [hereby has a duty to] sell the Product. If companies shall [hereby have a duty to] pay an excise tax on the Product of 20% or less pursuant to applicable law, then Newcomer Co. shall [hereby has a duty to] sell the Product.
45 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
The Framework of a Contract > Body > Obligations and Prohibitions > “shall” vs. “will” vs. “must”
• Note that “must” works in instances in which “shall” does not, e.g., in expressing conditions.
In order for Lindsay to drive the car home from the pub, she must first convince her mom to give her the keys.
In order for Lindsay to drive the car home from the pub, she shall first convince her mom to give her the keys. You should not draft the sentence this way since Lindsay is not obligated to convince her mom to give her the keys, and there should not be a cause of action against Lindsay if she failed to convince her mom to give her the keys. (In fact, it could very well be the other way around if she succeeded in convincing her mom….)
46 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
The Framework of a Contract > Body > Obligation and Prohibitions > “shall” vs. “will” vs. “must”
Use: Do not use: • “shall” to convey an • “is obligated to” obligation • “agrees to” • “will” to convey futurity • “covenants and agrees to” • “must” to convey a condition to be satisfied • “shall be obligated to” or to point to an obligation that exists but • “undertakes to” that derives from another provision
47 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
The Framework of a Contract > Body > Obligations and Prohibitions > Active Voice vs. Passive Voice
Active Voice vs. Passive Voice
48 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
The Framework of a Contract > Body > Obligations and Prohibitions > Active Voice vs. Passive Voice
General rule: Use the active voice rather than the passive voice when imposing an obligation.*
• Makes clear which party is the actor • More concise than the passive voice • Easier to read/More natural than the passive voice • In the context of an obligation, consistent with substituting “hereby has/have the duty to” for “shall”
* There are certain instances in which it makes sense to use the passive voice (e.g., those in which the identity of the actor does not matter).
49 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
The Framework of a Contract > Body > Obligations and Prohibitions > Active Voice vs. Passive Voice Active Voice: The actor is the sentence’s subject. General format (for an obligation) = [actor] + shall/shall not + [verb (or verb phrase)] + [object being acted upon] Example: My daughter shall pick up the toys.
actor verb object being phrase acted upon
50 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
The Framework of a Contract > Body > Obligations and Prohibitions > Active Voice vs. Passive Voice Passive Voice (with identified passive agent): The subject of the sentence is not the actor. General format (for an obligation) =
[subject being acted upon] + shall/shall not + [verb (or verb phrase)] + by + [passive agent] Example: The toys shall be picked up by my daughter.
subject being verb passive acted upon phrase agent • Does not fit the “hereby has/have a duty to” rule • Less concise and more awkward than active voice
51 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
The Framework of a Contract > Body > Obligations and Prohibitions > Active Voice vs. Passive Voice Truncated Passive Voice (no identified passive agent): The actor is not identified. General format (for an obligation) =
[subject being acted upon] + shall/shall not + [verb (or verb phrase)] + by + [passive agent] Example: The toys shall be picked up.
subject being verb acted upon phrase
52 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
The Framework of a Contract > Body > Obligations and Prohibitions > Active Voice vs. Passive Voice Truncated Passive Voice (no identified passive agent) Example: The toys shall be picked up.
subject being verb acted upon phrase Hey! Was the passive Who is obligated to pick up the toys? agent intentionally • My daughter, Julia? omitted? • My son, Matthew? Answer: Mommy and Daddy.
53 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
The Framework of a Contract > Body > Obligations and Prohibitions > Third Parties
** You can’t impose obligations upon persons that are not party to the contract. (Example 1 – Accountants)
Upon final resolution of all Disputed Items, the Accountants shall issue a report showing a calculation of the Final Net Working Capital. The Accountants shall make their determination of the Disputed Items within 60 days after having been selected. What if the Accountants don’t issue a report showing a calculation of the Final Net Working Capital? What if the Accountants don’t make their determination within 60 days?
54 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
The Framework of a Contract > Body > Obligations and Prohibitions > Third Parties
** You can’t impose obligations upon persons that are not party to the contract. (Example 1 – Accountants)
Upon final resolution of all Disputed Items, the Accountants must issue a report showing a calculation of the Final Net Working Capital. The Accountants must make their determination of the Disputed Items within 60 days after having been selected.
Upon final resolution of all Disputed Items, the Parties shall cause the Accountants to issue a report showing a calculation of the Final Net Working Capital. The Parties shall cause the Accountants to make their determination of the Disputed Items within 60 days after having been selected.
55 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
The Framework of a Contract > Body > Obligations and Prohibitions > Third Parties
** You can’t impose obligations upon persons that are not party to the contract. (Example 1 – Accountants) If the Parties are unable to resolve any disagreement as to one or more Disputed Items within 30 days after the Receiving Party’s receipt of a Protest Notice, then the Parties shall promptly engage Big Accountant Co. (the “Accountants”) by signing an engagement letter with the Accountants pursuant to which, among other things, the Accountants agree to comply with procedures set forth in this Section 2.4(b)(iii).…The Parties shall use their respective reasonable best efforts to cause the Accountants to reach a final determination with respect to all Disputed Items (such determination, a “Final Determination”) and to provide to the Parties, no later than the 60th day after the Accountants have been engaged pursuant to this Section 2.4(b)(iii), a report with respect to the NWC Statement (the “Final Determination Report”) that includes a calculation of the Net Working Capital.
56 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
The Framework of a Contract > Body > Obligations and Prohibitions > Third Parties
** You can’t impose obligations upon persons that are not party to the contract. (Example 2 – Parent Companies)
Complicated PE Assume that only Blocker and Basic are parties to the Partners, L.P. (the Stockholders’ Agreement. “Parent”) Each of Blocker, Basic and the Parent shall not directly or indirectly Transfer any Shares. Complicated PE Each of Basic and Blocker shall not directly or Intermediate Fund V, LLC indirectly Transfer (and shall not cause or permit their respective Affiliates to directly or indirectly Transfer) any Shares.
Complicated PE Blocker, BasicCo., LLC Inc. (“Blocker”) (“Basic”)
JV Company
57 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
The Framework of a Contract > Body > Obligations and Prohibitions > Third Parties
** You can’t impose obligations upon persons that are not party to the contract. (Example 2 – Parent Companies)
Complicated PE Potential solutions: Partners, L.P. (the • Make the Parent a party to the Stockholders’ “Parent”) Agreement. (Be sure to pick up Transfers by and to “intermediate entities,” and permitted exceptions for Transfers to Affiliates.) Complicated PE • Impose a consequence if the Parent directly or Intermediate Fund indirectly Transfers Shares or if there is a “Change of V, LLC Control” with respect to Blocker and/or the Parent (e.g., a put or call right in favor of Basic is triggered).
Complicated PE Blocker, BasicCo., LLC Inc. (“Blocker”) (“Basic”)
JV Company
58 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
The Framework of a Contract > Body > Discretionary Language
Discretionary Language
59 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
The Framework of a Contract > Body > Discretionary Language
• Deals with what a party is permitted to do • Think: “is/are permitted to” • Discretionary language is really an exception to prohibitions: in a contract (i.e., an exception to “shall not”) that are default rules (e.g., Section 18-702(b) of the Delaware Limited Liability Company Act provides that, unless otherwise provided in a limited liability company agreement, a member of a limited liability company ceases to have the power to exercise any rights or powers of a member upon the assignment of all of the member’s limited liability company interest)
60 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
The Framework of a Contract > Body > Discretionary Language
• Do not do the following: The Seller is authorized to pledge the Shares. The Seller has the [sole] discretion to pledge the Shares. The Seller has the option to pledge the Shares. The Seller is free to pledge the Shares.
61 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
The Framework of a Contract > Body > Discretionary > “is/are permitted to” vs. “might possibly”
• “May” can convey what a party is entitled/permitted to do, or it can convey what a party might possibility do (particularly when used with respect to a third party).
• Example: “may” = “is permitted to” The Seller shall not encumber the Shares; except that the Seller may pledge the Shares to the Bank in connection with a loan provided by the Bank to the Seller.
62 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
The Framework of a Contract > Body > Discretionary Language > “is/are permitted to” vs. “might possibly” Some background on “may” • Example: “may” = “might possibly” The Seller shall deliver in a timely manner all Products that are required to be delivered pursuant to all purchase orders that Key Customers may submit during the Pre-Closing Period. There is ambiguity here: is the provision referring to (1) all the Purchase Orders that Key Customers “might possibly submit” or (2) only those Purchase Orders that Key Customers “are permitted to submit”? If a Key Customer delivers a purchase order to the Seller during the Pre-Closing Period, then the Seller shall deliver in a timely manner all Products that are required to be delivered pursuant to such purchase order.
63 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
The Framework of a Contract > Body > Discretionary Language > “Naked” Discretion
• Use discretionary language to create an exception to a prohibition in a contract. At the Closing, the Buyer shall convey the Assets to the Seller. During the period (such period, the “Post-Closing Period”) beginning on the Closing Date and ending on the date that is 10 days after the Closing Date, the Buyer shall not sell the Assets to any Competing Enterprise; except that, during the Post-Closing Period, the Buyer is permitted to sell the Assets to any Key Vendor that is a Competing Enterprise. • In this example, it is clear that “is permitted to sell” is being used as the exception to the prohibition “shall not sell.”
64 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
The Framework of a Contract > Body > Discretionary Language > “Naked” Discretion • Generally, do not use discretionary language if the permitted action is not otherwise prohibited. At the Closing, the Buyer shall convey the Assets to the Seller. During the period (such period, the “Post-Closing Period”) beginning on the Closing Date and ending on the date that is 10 days after the Closing Date, the Buyer shall not sell the Assets to any Competing Enterprise. After the expiration of the Post- Closing Period, the Buyer is permitted to sell the Assets to any Key Vendor that is a Competing Enterprise. • “is permitted to sell” does not add anything here: there is nothing otherwise prohibiting the Buyer from using the Assets after the Post- Closing Period. • In fact, including the superfluous language might create an unwanted implication: the Buyer is permitted to sell the Assets after the Post-Closing Period, but only to Key Vendors that are Competing Enterprises.
65 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
The Framework of a Contract > Body > Discretionary Language > “Naked” Discretion
The Broccoli/Spinach Problem
• Dad: “Matthew, you are permitted to eat broccoli or spinach with your dinner.” • Matthew: “Great! I’ll have chocolate pudding!”
66 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
The Framework of a Contract > Body > Discretionary Language > “Naked” Discretion
The Broccoli/Spinach Problem
“are permitted to…only” does not solve the problem.
• Dad: “No, Matthew. What I mean is: Matthew, you are permitted to eat only broccoli or spinach with your dinner.” • Matthew: “Whew! And I thought I had to eat cauliflower and carrots if I wanted to eat broccoli or spinach. Although it sounds tempting, I think I’ll still have the pudding.”
• Dad: “Let me try this again: Matthew, you are permitted to eat broccoli or spinach only with your dinner.” • Matthew: “Only with my dinner? You mean I can’t eat them at other times as well? Bummer. ”
67 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
The Framework of a Contract > Body > Discretionary Language > “Naked” Discretion
The Broccoli/Spinach Problem
Potential Solution:
Use Language of Obligation “Matthew, you shall eat broccoli with your dinner or you shall eat spinach with your dinner.”
68 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
The Framework of a Contract > Body > Language of Declaration
Language of Declaration
69 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
The Framework of a Contract > Body > Language of Declaration
• Assertions of fact memorialized in a contract
• Two types: • Representations • Acknowledgments
70 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
The Framework of a Contract > Body > Language of Declaration > Reps and Warranties • Statements made by a party of what was, is, or will be true to induce someone to enter into a contract • Need not be within the control or knowledge of the party making the representation Within control/knowledge: Al represents and warrants to George that all of the papers he has written through the date hereof concerning global warming attribute the primary causes of global warming to humans. Not within control/knowledge: Al represents and warrants to George that at least 51% of all reports written through the date hereof by reputable scientists concerning global warming attribute the primary causes of global warming to humans.
71 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
The Framework of a Contract > Body > Language of Declaration > Reps and Warranties The lead-in*…
[Party A] represents and warrants to [Party B] as follows:…
Each of [Party A] and [Party B] represents and warrants to [Party C] as follows:…
[Party A] and [Party B] jointly and severally represent and warrant to [Party C] as follows:…
* Not for this presentation, but the lead-in can be structured in different manners with respect to the date or dates as of which the reps and warranties as a whole are made, which will affect closing conditions, termination rights, and indemnification rights.
72 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
The Framework of a Contract > Body > Language of Declaration > Reps and Warranties Example: Mitt represents to Newt as follows:…
During December 2011, Mitt did not disparage Newt. (Past circumstance or event; within the representing party’s control/knowledge)
During December 2011, no writer for Iowa Daily disparaged Newt. (Past circumstance or event; not within the representing party’s control/knowledge)
73 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
The Framework of a Contract > Body > Language of Declaration > Reps and Warranties Example: Hillary represents and warrants to Barack as follows:…
Hillary is a member of the Mickey Mouse Club. (Present circumstance or event; within the representing party’s control/knowledge)
Schedule A contains a complete and accurate list of all interns with whom William works on a weekly basis. (Present circumstance or event; not within the representing party’s control/knowledge)
74 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
The Framework of a Contract > Body > Language of Declaration > Reps and Warranties Example: Ron represents to Rick as follows:… Ron will not mention the Federal Reserve in any upcoming debate. (Future circumstance or event; within the representing party’s control/knowledge)
This is probably better phrased as an obligation, as follows:
Ron shall not mention the Federal Reserve in any upcoming debate.
75 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
The Framework of a Contract > Body > Language of Declaration > Reps and Warranties Example: Rick represents to Newt as follows:… Each of Rick’s Constituents will attend at least three Newt Rallies. (Future circumstance or event; not within the representing party’s control/knowledge) We could phrase this as an obligation, as follows: Rick shall encourage each of his Constituents to attend at least three Newt Rallies.
Phrasing this as a representation, however, ensures (at least to a certain degree) that Rick is “on the hook” if each of his Constituents do not attend at least three Newt Rallies, whether or not he encouraged them to do so. Each of Rick’s Constituents shall attend at least three Newt Rallies.
76 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
The Framework of a Contract > Body > Language of Declaration > Acknowledgments • A statement in a contract that a party accepts as true
• Why?
Aligns intentions Serves as an estoppel Stronger than recitals
77 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
The Framework of a Contract > Body > Language of Declaration > Acknowledgments
Examples:
• The Shareholder acknowledges that the Shares have not been registered under the Securities Act.
• The Consultant acknowledges that he has reviewed a copy of the Company Policies as in effect on the Effective Date.
• The Employee acknowledges that she has had an adequate opportunity to consult with her own counsel in connection with this Agreement.
78 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
The Framework of a Contract > Body > Language of Declaration > Acknowledgments Do not…
• …use acknowledgments to introduce other categories of language. The Purchaser acknowledges that it shall pay the Closing Costs at the Closing.
• …use “unconditional” or “expressly” (or other adverbs) before “acknowledge” Luke Skywalker begrudgingly acknowledges that the Dark Side of the Force has a certain appeal.
79 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
The Framework of a Contract > Body > Language of Declaration > Acknowledgments Do not…
• …use “acknowledges and agrees”
The Consultant acknowledges and agrees that he has reviewed a copy of, and shall comply with, the Company Policies as in effect on the Effective Date.
The Consultant acknowledges that he has reviewed a copy of the Company Policies as in effect on the Effective Date. The Consultant shall comply with the Company Policies.
80 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
The Framework of a Contract > Body > Language of Policy
Language of Policy
81 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
The Framework of a Contract > Body > Language of Policy
Two basic types:
• Language that states rules governing an event or circumstance • Language addressing the scope, meaning, or duration of a contract or provision
82 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
The Framework of a Contract > Body > Language of Policy
Language that states rules governing an event or circumstance • Any attempted transfer in contravention of Section 2.1 will be void. • Interest is payable at a rate of LIBOR plus the Applicable Margin.
83 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
The Framework of a Contract > Body > Language of Policy
Language addressing the scope, meaning, or duration of a contract or provision • This Agreement terminates on December 31, 2012. • This Agreement constitutes the agreement of the Parties with respect to the subject matter hereof. • If any provision of this Agreement is determined by a court of competent jurisdiction to be unenforceable by reason of excessive scope as to geographical, temporal, or functional coverage, then such provision will be deemed to extend only to the maximum geographic, temporal, and functional scope as to which it is permitted to be enforceable.
84 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
The Framework of a Contract > Body > Language of Policy
Verb Tenses: Present vs. Future • Use present tense for policies that apply on the effectiveness of the contract
This Agreement constitutes the entire agreement of the Parties with respect to the subject matter hereof.
This Agreement shall constitute the entire agreement of the Parties with respect to the subject matter hereof.
85 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
The Framework of a Contract > Body > Language of Policy
Verb Tenses: Present vs. Future • Use “will” for policies relating to future events that might or might not take place If the Prevailing Interest Rate drops below the Adjusted Rate, then this Agreement will terminate. If the Prevailing Interest Rate drops below the Adjusted Rate, then this Agreement will thereby terminate. If the Prevailing Interest Rate drops below the Adjusted Rate, then this Agreement will terminate by virtue thereof.
86 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
The Framework of a Contract > Body > Recap
• Definitions • Language of Performance • Obligations and Prohibitions • Discretionary Language • Language of Declaration Representations and Warranties Acknowledgements • Language of Policy
87 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
The Framework of a Contract > Signature Pages
Entities can sign on behalf of limited liability companies and partnerships – you need to “reach an authorized human.” Each Party is signing this Agreement as of the Effective Date.
BASIC STRUCTURE, INC. ULTIMATE SUB, LLC
By:______By: PASS-THROUGH, LP, Name: Adam Smith its Managing Member Title: President By: USELESS INTERMEDIATE SUB, LLC, its General Partner By: ULTIMATE PARENT, INC., its Managing Member
By:______Name: Dr. Complicated Title: Chief Difficulty Officer
88 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
The Framework of a Contract > Signature Pages
Drafting tips for the lead-in on the signature page Each of the Parties has executed this Agreement as of the ____ day of August, 2012.
Each of the Parties has executed this Agreement as of August ___, 2012. Each of the Parties has executed this Agreement as of ______, 2012.
Each Party is signing this Agreement as of the Effective Date.
Each Party has executed and delivered this Agreement as of the Effective Date.
89 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
The Framework of a Contract > Signature Pages
Drafting tips for the lead-in on the signature page • For written consents of stockholders of a Delaware corporation, H-M Wexford LLC v. Encorp, Inc. takes a strict approach with respect to DGCL Section 228(c) – do not use a “hardwired as of” date
Each of the undersigned is signing this Written Consent as of the date appearing next to such undersigned’s signature.
90 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
The Framework of a Contract > Signature Pages
Practical Tips • On the page prior to the sig page: Use “[Signature page follows]” rather than “[THE REMAINDER OF THIS PAGE INTENTIONALLY HAS BEEN LEFT BLANK]” Insert a “Section Break” prior to the sig page, not a “Page Break” • Get rid of headers and footers on the sig page Exception: You might want to specifically label the footer of the sig page to denote the counterpart being signed (e.g., “Signature Page to Assignment Agreement (Foreign Seller to Domestic Purchaser)”)
91 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
The Framework of a Contract > Signature Pages
Practical Tips • Make sure that you and your adversarial counterpart are “on the same page” – Think ahead! Same exact counterparts Number of executed originals per document (be mindful of documents that are negotiable instruments….) • Make sure that you and your client are “on the same page” – Think ahead! Number of executed originals per document (be mindful of documents that are negotiable instruments….) ** Executive availability
92 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
The Framework of a Contract > Signature Pages
Practical Tips • Scan signature pages (and, once the deal is closed, entire documents) and keep originals in a safe place • Be mindful of negotiable instruments and post- closing documents to be signed by officers of the target who will continue as officers of the company post-closing (e.g., CEO employment agreement, stockholders’ agreement) • Follow up quickly and aggressively after closing to catalogue signature pages received and obtain any missing signature pages
93 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
Legal Archaisms
Ready thy quill and powdered wig! It’s time for…
94 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
Legal Archaisms
“that” vs. “which” (vs. “, which”) • “that” – Think: restrictive; limiting I’ll give you all the books in my library that I have read. i.e., I’m not going to give you all of the books in my library – just those that I have read. • “, which” – Think: descriptive I’ll give you all the books in my library, which I have read. i.e., I have read all of the books in my library and I will give them to you.
• “which” [no preceding comma] – Think: Can I replace with “that”? I’ll give you all the books in my library which I have read. It’s unclear whether you get all the books in my library or only those that I have read.
95 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
Legal Archaisms
“that” vs. “which” (vs. “, which”) “Purchased Assets” means all of the assets owned by the Company and its Subsidiaries, other than those assets owned by Ambiguity Sub which are not material to the Company’s operations.
• If “which” is interpreted to Assets of the mean “that”, then only the blue Company (small) rectangle gets carved out Assets of Ambiguity Sub • But if “which” is interpreted to mean “, which”, then the green (medium) rectangle gets carved out
Immaterial Assets of Ambiguity Sub
96 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
Legal Archaisms
WHEREAS, NOW, THEREFORE, IN WITNESS WHEREOF, Do hereby/does hereby Undertakes to – • just use “shall” Lancelot does hereby conveyeth his undying love for Guenevere and henceforth shall stave off with sword all others who attempteth to bring her harm.
97 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
Legal Archaisms
All notices, consents, approvals, reports, designations, requests, waivers, elections, and other communications (collectively, “Notices”) authorized or required to be given pursuant to this Agreement shall be given in writing and either personally delivered to the Partner to whom it is given or delivered by an established delivery service by which receipts are given or mailed by registered or certified mail, postage prepaid, or sent by telex, electronic telecopier or telegram, addressed to the Partner at his or its address listed beneath such Partner’s respective signature hereto.
98 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
Legal Archaisms
WITNESSETH:
W I T N E S S E T H:
99 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
Summary
• Language matters. • The law matters, too. But that’s a story for another day… • Understand the concept, then put it in words – this is often easier said than done! • Separate out the function of each provision or clause (e.g., language of performance, language of obligation, language of declaration, etc.). • Taking time to develop good drafting habits now will make you a much more effective drafter when time is of the essence. • Read what you draft to see if it makes sense. If not, fix the problem/cure the ambiguity.
100 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
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101 Fundamental Concepts in Drafting Contracts: What Most Attorneys Fail to Consider
This presentation and the supplemental materials related to this presentation (this presentation and such materials, collectively, the “Materials”) are intended to constitute a continuing legal education course and are intended for an audience of attorneys. Neither the Materials, nor any portion thereof, is intended for any other purpose or for anyone other than an attorney. Neither the Materials nor any portion thereof constitutes legal advice. Neither the Materials nor any portion thereof is permitted to be distributed without the express written consent of Vincent R. Martorana.
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103 Vincent R. Martorana, Counsel Tel: (212) 549-0418 Email: [email protected] Vincent R. Martorana is Counsel with Reed Smith LLP’s New York office. His practice includes the representation of clients in connection with mergers, stock and asset acquisitions, joint ventures, corporate restructurings, private equity investments, securities offerings, and general contractual matters. He also has extensive experience providing advice with respect to state laws governing business entities (including Delaware and New York corporate and limited liability company law), corporate governance advice (including advice regarding compliance with the Sarbanes-Oxley Act, NYSE listing standards, NASD rules, and SEC rules), and advice in connection with public company periodic reports. Vincent has given his Basic Concepts in Drafting Contracts and Intermediate Concepts in Drafting Contracts continuing legal education courses at several venues, including Reed Smith, the New York City Bar Association, the New York County Lawyers Association, the Brooklyn Bar Association, and the Suffolk County Bar Association. Vincent received a J.D. from the University of Chicago Law School and a B.S. in Economics (with concentrations in Finance and Operations and Information Management) from the University of Pennsylvania, Wharton School. Experience 2006 Reed Smith 2002 Willkie Farr & Gallagher Legal Education 2002 J.D., University of Chicago Law School Undergraduate Education 1999 B.S., magna cum laude, University of Pennsylvania, Wharton School Professional Admissions / Qualifications • New York The Everyday Practice of Law Articles Engagement Letters Non Engagement The Art of Delegating Statement of Clients’ Rights / Statement of Clients’ Responsibilities Forms Misc. Intake Forms Termination of Engagement
Beth Shapiro, Esq., Shapiro, Beilly & Aronowitz, LLP
BETH SHAPIRO, New York, New York, 1948. Ms. Shapiro graduated from Hofstra University in 1980. She was admitted to the New York State Bar in 1980. Ms. Shapiro is a trial attorney specializing in defense litigation, including first party insurance claims. She has lectured on trial practice at the New York State Trial Lawyers Association and at Hofstra University, New York County Lawyers and NITA Program. Ms. Shapiro is a member of the Queens County Bar Association, past member of the Board of Managers Grievance Committee, and the Queens County Judicial Screening Committee. She is admitted to practice before the United States Court of Appeals for the Southern and Eastern Districts of New York and the United States Court of Appeals for the Second Circuit.