COMMERCIAL PRACTICE L4 - Intro to commercial practice Flashcards
What sections might you expect to find in a commercial contract and in what order? (14)
Front cover, commencement section, parties, background, operative provisions, definitions, performance obligations, payment obligations, conditions precedent, limitations, exclusions of liability, boilerplate clauses, exclusions and schedules
What are commercial contracts known as? (1)
B2B contracts.
What is the purpose of the front cover in a commercial contract? (3)
It sets out date of agreement, the parties and the title of the agreement.
What is the purpose of the commencement section in a commercial contract? (1)
It often repeats the title of the agreement and the date.
What is the purpose of a parties section in a commercial contract? (1)
Parties to the contract are listed in this section with their name, address and company number for companies or LLPs.
What is the purpose of the background section in a commercial contract? (3)
It gives an idea of context of the contract and may be set out as to why the contract was entered into / drafted in the form it was, the events leading up to the entering into the contract and any related agreements.
What was the background section in a commercial contract traditionally referred to and introduced by? (2)
Known as the recitals or preamble and introduced by the word Whereas.
What is the purpose of the operative provisions section in a commercial contract? (2)
Operative provisions section contains provisions which govern the rights and obligations of the parties and are sometimes referred to as the ‘body’ of the contract.
What is the purpose of the definitions section of a commercial contract? (1)
Defined terms and conditions are used to make reading and interpreting a contract easier.
What is the purpose of the performance obligations section of a commercial contract? (2)
They are at the heart of a contract and set out what the contracting parties are agreeing by entering into contract to do. They address who, what, when, to whom and what if.
What does the word shall in a commercial contract refer to? (1)
An obligation.
What is the purpose of the payment obligations section of a commercial contract? (2)
It sets out the obligation of one party to pay another and can be seen as a specific type of performance obligation.
What is the purpose of the conditions precedent section of a commercial contract? (1)
It provides that the contract will come into force only after specific conditions have been met.
What is the purpose of the limitations and exclusions of liability section of a commercial contract? (1)
If a party breaches performance and / or payment obligations it will be liable for that breach and a party may want to exclude liability for that breach.
What is the purpose of the boilerplate clauses section of a commercial contract? (4)
It refers to the standard generic clauses found in most commercial documents and covers issues such as which country’s laws govern the contract, how any notices need to be given to one party to the contract to another should be delivered and how any disputes in relation to the contract will be dealt with.
