University of Houston Law Center
D. C. Toedt III

Common contract screw-ups
“8. The contract that is signed by both parties but with manuscript revisions initialled [sic] only by one party or by neither party.”
[From “Top 10 howlers when preparing contracts for signature,” by the IP
Draughts blog at http://goo.gl/Km6Dw .]

True love ….
 Man has big trust fund for his kids
 Sued for killing another in car accident

Adopts girlfriend so she’ll share
($70MM) in trust fund
 BUT: Is their relationship now incestuous – and thus illegal?
Hat tip: ProfessorBainbridge.com

Florida incest statute
826.04 Incest. …. "Sexual intercourse" is the penetration of the female sex organ by the male sex organ, however slight ….
Quaere: 1. What did the drafters (presumably) intend for “ however slight ” to modify?
2. Could this have been better phrased?

Some pretentious expressions
How could these be improved?
 Attains the age of
 Cease
 Commence
 Does not operate to do X

Channel-stuffing

Sales people “sell” product to distributors who really can’t resell the product
 Why do this?
 Usually give distributor a return right in a (secret) side letter
 Bad business practice – screws up inventory planning, incurs extra costs
 Can be securities fraud

Lexicon review
 DSO – what is it?

Stark Exercise 6-1:
DCT sample answer
This License Agreement (“Agreement”) is entered into as of February 9, 2012, by
RALPH PRODUCTS, LP , a Virginia limited partnership (“Ralph LP” or “Licensor”); and
MERCHANDISERS EXTRAORDINAIRE,
INC.
, an Oregon corporation (“Merchandisers ” or “Licensee”).
1.
2.
3.
4.
5.
Much of this is “style” preference
I like a complete sentence ( contra Stark)
A good title is “License Agreement”
Date: Item 3 of Stark facts (or April 21)
Date: “As of” is good, but optional
6.
7.
Bold-faced names are easier to spot when scanning through lots of contracts
States of incorp.: Item 11 of Stark facts
8.
9.
Defined terms for parties are a good idea for later use in the document
“Licensor” and “Licensee” – confusing?
(But including them allows copy-and-paste from other documents)
10.
Some students included background facts; those are recitals, not part of the preamble