Jack Friery

UCSD Extension

© 2007 1Jack Friery

Groucho: "That's in every contract, that's what you call a sanity clause."

Chico: "You can't a fool-a me. There ain't no sanity clause”

--Groucho and Chico Marx in A Night at the Opera (Movie)

© 2007Jack Friery 2

"The party of the first part..." is hereinafter called: "the party of the first part..." and "The party of the second part..." is hereinafter called: "the party of the second part...--Groucho and Chico Marx in A Night at the

Opera

© 2007Jack Friery 3

Read and interpret the contract as a wholeDon’t throw anything out

Give ambiguous terms their reasonable and effective meaningOrdinary terms—ordinary meaningTechnical terms—technical meaning Trade practice & prior dealings may

interpretCommon sense is part of the contract

© 2007Jack Friery 4

Order of preference if necessary:Negotiated terms over standardized termsSpecific terms over general termsWritten over typewritten termsTypewritten over pre-printed terms

Contra proferentem if all else fails: Interpret against the drafter

© 2007Jack Friery 5

Description of the parties “Whereas” clauses Defined terms & definitions

Capitalize defined termsBe consistent with terms

Effective date

© 2007Jack Friery 6

Anti-assignment Indemnity

Covered events (Negligence? Intentional acts?)

ProportionCap on liability

Severability clause

© 2007Jack Friery 7

Choice of law Disputes process

Preliminary negotiation? Establish time limit.

Mediation?Arbitration?

Where? Process? Binding or non-binding

© 2007Jack Friery 8

WarrantyDuration, notice, warranted events,

remedies Only modify in writing Publicity & disclosure Breach & remedies

Consequential damages?

© 2007Jack Friery 9

Termination & durationForce majeure Survival provision (proprietary data,

disputes) Integration clause

© 2007Jack Friery 10

© 2007Jack Friery 11