Legal Skills: Drafting legal clauses in commercial contracts

Course Overview

This intensive one-day programme has been designed to give you practical guidance on the drafting and use of the 'legal' clauses in commercial contracts. The rights and liabilities created as a result of warranties and indemnities can create complex legal problems for contracting parties and third parties.

The morning session will examine these critical issues and ways in which liability can be limited or excluded.

The afternoon session focuses on the effective use of boilerplate provisions, their legal background and how they should be used and drafted.

Audience

• In-house lawyers
• Solicitors in private practice
• Commercial directors and managers
• Contracts directors and managers

Course Outline

Warranties, liability and indemnities

Introduction

• Why are these clauses needed?
• Why are they so difficult to understand?
• Getting the client's attention and instructions on complex legal clauses
• Some basic definitions: representations, warranties, undertakings, conditions, covenants, exemption clauses, indemnities, hold harmless

Promises as to existing facts: representations, warranties, conditions precedent and disclaimers

(Review of some sample clauses to bring out the following points):

• Conditions precedent
• Disclaimers
• Representations or warranties or both?
• Unknown facts: who should bear the risk?
• Different levels of warranty: absolute, best of knowledge, actual knowledge
• Exclusion of matters known to warrantee: due diligence and use of disclosure letters
• Other ways of qualifying warranties: time limits, lower and upper value limits
• Consequences of breach: termination, specific remedies, liability, indemnities
• Case law on representations, warranties and disclaimers
• Drafting and negotiation issues

Promises as to future events: undertakings, covenants, terms and conditions

(Review of some sample clauses to bring out the following points):

• Conditions subsequent
• Conditions generally
• Undertakings, covenants, terms and other provisions
• Consequences of breach: termination, specific remedies, liability
• Case law

Limiting, excluding and apportioning liability: liability and indemnity clauses

(Review of some sample clauses to bring out the following points):

• Legal framework: statute and case law
• Excluding and limiting liability, including: direct and indirect losses, personal injury, fraud
• Apportioning liability, including: indemnities and hold harmless distinguished, exceptions to indemnities
• Relationship between liability and indemnity clauses
• Related issues: insurance, incoterms, parent company guarantees

Drafting exercises on warranties, liability and indemnities

Selected boilerplate clauses

Introduction

• What is meant by 'boilerplate' and where does the expression come from?
• Why are these clauses important?
• Which are the 'core' boilerplate clauses, and how much boilerplate should be included?

Discussion of law, practice and drafting issues affecting selected boilerplate provisions:

• Assignment and novation
• Best and reasonable endeavours
• Entire agreement
• Force majeure
• Interpretation
• Law and jurisdiction
• Termination
• Third party rights

Legal Skills: Drafting legal clauses in commercial contracts / LE-CL-DL