Sales Contract

4/30/2015

1

Preparing Contracts

What is a Contract?

• A voluntary agreement between two or more parties that is legally enforceable

4/30/2015

2

Objectives

• Different forms of contracts

• Key terms to include in contracts

• How bankruptcy impacts contracts

Forms of Contracts

• Long form agreement

• Standard contracts

• Short form contracts

• Attachments

• Addenda

4/30/2015

3

Key Terms

• Parties

• Signatures – Corporate signature

– Counterparts

• Evidencing intent

• Date

Key Terms

• Representations and warranties

• Conditions

• Price and payment terms

• Timing of performance

• Damages

• Duration and renewal

• Termination

• Dispute resolution

4/30/2015

4

Other Considerations

• Is contract legal or otherwise void?

• Is the contract voluntary?

• Are the terms fair?

• Are there any ambiguous terms?

• Mistakes? – Mistake of fact

– Mistake of judgment

• Allocation of risk

Bankruptcy

• Automatic stay

• Must get court permission to foreclose or stop performing on contract

• Termination clauses tied to bankruptcy are unenforceable

• Debtor chooses which contracts it wishes to maintain

4/30/2015

5

Summary

• Contracts bring predictability, clarity, and accountability

• No “one-size fits all” form for a contract

• Bankruptcy law can trump contracts