Monday, June 4, 2007

Ironclad Ready-made Contracts for Sale! Anyone?

Well, not really (No, don't ebay it) but read on. My life as a Pupil in the Litigation department of a certain Law firm got off to a decidedly strange start last Friday when my Pupil Master directed me to another Partner for my very first task which turned out to be decidedly 'Corporate-y' in flavour: drafting limitation of liability, Delay in adhering to schedule and Force Majeure clauses.

As the Partner was explaining the rather strange processes of the service the client company provided for customers (ship purging), he paused for a bit and voiced exactly what was on my mind, "Now, you must be wondering why you need to draft contract clauses when you're in the Liti department. The truth is this is only a $10,000 contract and we don't want to pass it on to the Corporate department in order to save on costs. So we just do a little value-added service for them and draft the clauses they want." (Read: Pupils are cheap. Get them to do it for free.) Then he sent me off to do 'lots of research' as he put it, because the service provided by the client company was unique and it'd be a 'lot more challenging than law school'. Sadly, he was right on both counts.

So the large part of Friday was spent fumbling through books in the library and zapping copious amounts of clauses that seemed remotely useful before stumbling on the heaven sent volume 4(3) of Butterworth's The Encyclopedia of Forms and Precedents. Sunday service was spent reading the researched stuff and highlighting important parts and the first half of Monday spent drafting the various clauses that consisted of a lot of selective editing from the various precedent clauses, improvisations and a good deal of tweaking.

And after Lunch, I returned to the Partner who had assigned me the clause drafting task. He took the Agreement draft as I attempted to explain my choice for making the Force Majeure clause one that provided the client with the power to suspend the Agreement at their discretion with an auto-termination option instead of the usual dual-party right to suspend option (cause that gave me a bloody headache researching it), flipped through it a couple of times and nodded before asking, "Alright, can you draft a proper full contract with these clauses inserted?"

I seriously doubt he read through the clauses properly, let alone listened to the explanation. Not that I would have done any different if I were in his position. Basically, as long as the wording of the clauses/contract looks legalistic, sounds legalistic with the ability to make the average legal eye glaze over (if they're not litigating over the damn document) when perusing the above-mentioned clauses, it's good enough.

And you wonder why your average man/woman on the street hates having to plow through pages of legalistic, archaic language that leaves the head spinning and eyes watering. It's so that you sign on the dotted line without plowing through the entire she-bang. Plus it's our job to make you miserable. Really.

Anyway, before I get lynched. Drafting a proper full contract with terms and conditions replete with an acceptable format is very different from sticking a bunch of clauses together, numbering them and dumping it under the heading: Final Agreement. Which was basically what I did.
And when a Partner, someone near the top of the Law Firm food chain, phrases a task/order as a query/ request to a Pupil, someone at the very bottom of the Law Firm food chain- behind your Pantry Aunty, you say," Alright, no problem." If you want your job that is. Which I do.

And hence commenced another frenzied hunt for acceptable Supply of Service terms and conditions and a good contract template at the library. Which was where volume 3 of Longman's Commercial Law Precedents came in handy with a nice nifty template that needed some tweaking and improvising. If there's anything I've learned so far, it's that Butterworth's The Encyclopedia of Forms and Precedents and Longman's Commercial Law Precedents are kick-ass books to have around for drafting contracts. God knows how anyone would be able to draft a decent, enforceable contract entirely from scratch without 'em.

So the bunch of clauses basically transformed from something like:

Force Majeure.

1. ‘Force Majeure Event’ means an Act of God including but not limited to fire, flood, lightning strikes, windstorm or other natural disaster; act of sovereign including but not limited to war, invasion, act of foreign enemies, hostilities, insurrection, destruction or damage to property by or under the order of any government or public authority; labour dispute including but not limited to strike, lockout or boycott; or any event beyond the reasonable control of either party.


XXX shall be entitled by notice to the Customer to suspend (name of service provided/ performance of the agreement) for so long as the Force Majeure Event renders performance of the Agreement impossible.


All money due to XXX shall be paid immediately.

2. If and when the period of incapacity to perform the Agreement due to the Force Majeure Event exceeds (X) months/ continuous days then this agreement shall automatically terminate unless the parties first agree otherwise in writing.

3. Neither party shall be liable to the other party in contract, tort, negligence, breach of statutory duty or otherwise for any damage, costs or loss of property suffered or incurred by that other party arising out of or from a Force Majeure Event



3.1 Subject to any special terms agreed, the Customer shall pay the charges as shown on the Quotation Form and any additional sums agreed between the Company and the Customer for the provision of the Specified Service or which, in the Company’s sole discretion, are required as the result of the Customer’s instructions or lack of instructions, the inaccuracy of any Representation(s) or any other cause attributable to the Customer.

3.2 All charges quoted to the Customer for the provision of the Specified Service are exclusive of any Goods and Services Tax, for which the Customer shall be additionally liable at the applicable rate from time to time.

3.3 The Company may invoice the Customer following the end of each month in which the Specified Service is provided, or at other times agreed with the Customer.

3.4 The charges as shown on the Quotation Form and any additional sums payable shall be paid by the Customer (together with any Goods and Services Tax, and without any set-off or other deduction) within [30] calendar days of the Company’s invoice.

3.5 If payment is not made on the due date, the Company shall be entitled, without limiting any other rights it may have, to charge interest on the outstanding amount (both before and after any judgement) at the rate of [__] per cent above the base rate from time to time of [______] Bank plc from the due date until the outstanding amount is paid in full.

Which at any rate is only half complete, cause I only intend to finish the contract by Lunch on Tuesday. Ho ho. So chatting over Web MSN messenger with CS, who had just been given some new Memo & Assoc to do, I mused, " You know, we could make a tidy sum by selling our ready made contracts on E-Bay. Just picture this, Ironclad, Ready-made customizable contracts for sale at a fraction of the price you'd need to pay at a law firm!!! Tried and Tested in Court!"

To which he enthusiastically responded, " Yah man! That's a very good business idea! We could make a shit load of money that way. Ha ha." Though I'm pretty certain that there are a boatload of ethical issues surrounding that innovative arrangement, else someone would have done it sometime ago. And the thought of being the subject of a restitution law suit where one's "illegal profits and unjust enrichments are disgorged." is not in the least appealing. When it comes to the subject of personal financial health, it pays to be on the very safe side.

But it remains a pleasant dream nonetheless, one of many needed to while away the time while drafting contracts and other legal thingamajigs that will eventually come my way.

Back to the remaining 22 episodes of Inuyasha before midnight comes. If there's anything good about having to work, it's that I'm forced to keep more earthly sleeping times.

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