principles and conventions of drafting

Question 1

document should reflect all relevant legal issues

EMPLOYMENT CONTRACT

Answer 1

• is a covenant required?

- is the RC satisfying the “reasonableness” test required for it to be enforceable?

Question 2

document should reflect all relevant legal issues

SHARE PURCHASE AGREEMENT

Answer 2

• restrictions on selling SH (to not compete with business of Target company) required to protect B
• how should those restrictions (RCs) be drafted to be enforcable?

Question 3

Why a deed?

Answer 3

1. document required to be executed as a deed
2. desirable to have a limitation period arising from the contract of TWELVE years (deed) rather than 6 (agreement under hand)
3. questionable whether VALUABLE CONSIDERATION is being provided by a party (if deed - valuable consideration need not be given for the document to be binding)

Question 4

Imposing obligations

Answer 4

“shall”

or

“must”

Question 5

signifying future

Answer 5

“will”

Question 6

signifying creating rights or options

Answer 6

“map”

Question 7

singular or plural?

Answer 7

“none” and “any = followed by a verb in the singular

collective nouns (“committee”, “board”) = treated as singular or plural (but be consistent)

Question 8

dates, times, and figures

Answer 8

MAKE CLEAR WHETHER INCLUSIVE OR EXCLUSIVE OF THE FIRST AND LAST DAYS

“from and including/excluding”

“by” –> “on or before”
“after” –> “from and excluding”
“until”/”to” –> “to and including”
“between” –> is 1st and last day inclusive or exclusive?

Question 9

beware of excluded middle

Answer 9

what if X is exactly that number?

say:
“£100 or under”
“under and including £100”

Question 10

“The Buyer shall pay for the goods within 21 days”

Answer 10

21 DAYS OF WHAT?

delivery?
receipt of invoice?

BE CLEAR

Question 11

Clause A begins “subject to Clause B”

Answer 11

Clause B overrides Clause A

Question 12

Clause A begins “notwithstanding clause B”

Answer 12

Clause A overrides clause B

Question 13

Clause A begins “notwithstanding any other provision of this Agreement”

Answer 13

Clause A overrides all other clauses

Question 14

Clause A is “without prejudice” to clause B

Answer 14

nothing in Clause A impairs effectiveness of Clause B

Question 15

use of ‘and’ and ‘or’

Answer 15

Ambiguity construed by courts against person trying to rely on it (‘or’ interpreted conjuctively!)

(Federal Steam v Department of Trade & Industry)

Question 16

Contractual Interpretation by Courts

Answer 16

1. Ordinary and natural meaning of actual words (unless context clearly requires otherwise)
2. If ambiguous, evidence of parties intending another effect will be taken into account
3. Implied terms (by SOGA 1979 e.g.)
4. breach of condition = terminate contract and damages, breach of warranty = damages only
5. Rules of construction
6. Rules of interpretation supplied by statute