Successful Negotiations

Close: Create a contract

Perspectives on contracts
  • A contract is an agreement enforceable by law.
  • Obtaining contracts is the main goal of a business.
Sources of contract laws
  • Common law
    • Originated in England
    • Uses laws and prior judgements of the court.
    • Contracts become larger as they need to cover wide variety of situations.
  • Civil Law
    • Originated in Europe.
    • Uses code
    • Does not rely much on the precedences.
    • Contracts tend to be shorter as they can just reference the code.
What type of contract?
  • Product/goods
    • US Commercial code
    • UN International sales of goods (81 countries).
  • Real/property - follows law of the country (civil or common).
  • Services - follows law of the country (civil or common).
The agreement
  • Checklist
    • Is there an agreement?
    • Is there consideration?
    • Is the agreement legal?
    • Must the beal be in writing?
  • Framework agreements
    • Preprinted leases, memorandum of agreement etc.
  • Consideration
    • For a deal to be binding, both sides have to give something up.
    • In civil law countries consideration is not mandatory.
    • In common law countries consideration is mandatory.
  • Is the agreement legal?
    • Should not be against local laws.
  • Does the contract need to be in writing?
    • When you have a written agreement, law is confined to only enforce that, no extraneous promises made during negotiations.
    • Always include parol evidence clause in the contract.
    • Oral agreements are enforceable, with some exceptions.
    • Real estate agreements must be in writing.
    • Good idea to always have agreements in writing.
  • Legal objectives
    • To create a binding contract which is enforceable.
    • Results in lengthy process, increased cost, and may affect relationships between parties.
  • Lean contracts
    • Emphasize free market economics rather than legalities.
    • Include - price, IP rights, terms implied by law but not written in the contract.
  • Visual contracts - making contracts more readable.