190 Pages
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Canadian Business Contracts Handbook

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Description

The Canadian Business Contracts Handbook helps small-business owners to understand hundreds of standard contract clauses, such as those found in partnership agreements, lease agreements, and contracts for purchase or sale of goods or a business.
Using everyday language, author Nishan Swais takes readers step-by-step through standard clauses and explains their meanings. He pinpoints potential problems in contracts, and clarifies legal jargon in simple terms for the layperson.
While it takes a great deal of hard work to make a small business successful, it can also come down to paperwork. A well-written contract can make or break a business. Having a good understanding of standard business contracts and being able to negotiate and make changes to your own are critical skills essential to the effective running of a small business.
The download kit included with this book can be installed on your home computer, and contains quizzes, checklists, and sample clauses that can help Canadian small-business owners understand, negotiate, and create their own legally binding contracts.
Preface xi
Introduction xii
Part I: Understanding Contracts 1
1 What Is a Contract? 3
1. The Origin of the Word Contract 3
2. The Three Components of a Contract 4
2.1 Offer 4
2.2 Acceptance 6
2.3 Consideration 10
3. Exceptions 12
3.1 Agreements contrary to law 12
3.2 Lack of capacity 13
3.3 Lack of mutuality 13
4. Summary 13
2 What Does a Contract Do? 16
1. Performance 16
2. Privity 17
2.1 Capacity 18
2.2 Attestation 20
2.3 Privity and a duty of care 20
3. Breach 21
3.1 Compensation 22
3.2 Contributory behaviour 23
3.3 Specific performance 23
3.4 Anticipatory breach 25
4. Exceptions 25
4.1 Mistake 26
4.2 Misrepresentation 26
4.3 Frustration 28
4.4 Unconscionability 28
contents
iv Canadian Business Contracts Handbook
5. Summary 28
5.1 Establishes your rights and obligations 28
5.2 Allocates risk 29
5.3 Provides a legal basis for compensation 29
3 What Does a Contract Look Like? 30
1. Forms of Contract 30
1.1 Letter agreement 31
1.2 Formal agreement 31
1.3 Other forms of agreement 32
2. Summary 33
Part II: The Formal Elements of a Written Contract 45
4 T he Date 47
1. Why You Must Date Your Contract 47
2. How to Date Your Contract 48
3. The Relationship between Signing and Dating a Contract 50
4. The Contract Term 51
5. Summary 52
5 T he Parties 53
1. Why You Must Name the Parties to the Contract 53
2. Identifying the Parties to the Contract 53
2.1 How to identify the other party 53
2.2 When more than a name is needed to identify the other party 54
2.3 Investigating the other party 55
3. Naming the Parties to the Contract 56
3.1 Which parties should be named? 56
3.2 Use the parties’ legal names 57
3.3 Where in the contract should the parties be named? 58
4. Attestation — Signing the Contract 59
5. Summary 60
6 T he Terms 67
1. What Are the Terms of a Contract? 67
2. What Kinds of Terms Does a Business Contract Contain? 68
2.1 Background 69
2.2 What the Parties Will Do 69
2.3 Time 70
2.4 Payment 70
2.5 Warranties 70
2.6 Conditions 73
Contents v
2.7 Termination 75
2.8 Other terms 77
3. Schedules and Exhibits 78
4. Summary 79
7 Liability Terms 83
1. What Are the Liability Terms? 83
2. Limiting the Remedies Available for Breach 84
2.1 Where limiting remedies is not appropriate 84
2.2 Limiting the remedies available for breach of warranty 85
2.3 Service credits 86
2.4 Limiting the right to terminate for breach 87
2.5 Protecting yourself from limitations of available remedies 87
3. Setting a Damages Cap 88
3.1 Justifications for a damages cap 89
3.2 Issues to consider when including a damages cap 90
4. Excluding Types of Damages 91
4.1 General damages versus special damages 92
4.2 The practical approach to excluding damages 92
4.3 Exclusions from the exclusion of damages 94
5. Indemnities 94
6. Liability Terms and the Courts 95
7. Insurance 96
8. Summary 97
8 T he Boilerplate and What It Means 102
1. What Is Meant by the Boilerplate? 102
2. Principles of Interpretation 103
2.1 Terms concerning how the contract is structured 103
2.2 Terms concerning how the contract is written 104
2.3 Terms concerning financial and commercial matters 106
3. General Terms 109
3.1 Terms concerning the enforcement of the contract 109
3.2 Terms concerning the relationship of the parties 111
3.3 Terms concerning attestation 114
4. Summary 114
Part III: The Elements of Style 117
9 Gather the Facts 119
1. Why You Need to Gather the Facts 119
2. Why You Need to Write the Facts Down 120
vi Canadian Business Contracts Handbook
3. How to Ensure That You Gather the Relevant Facts 121
3.1 Who? 122
3.2 When? 122
3.3 How? 123
3.4 Where? 124
3.5 Why? 124
3.6 What? 125
4. Get the Big Picture 126
5. Summary 127
10 Work with the Law 130
1. Working with the Substantive Law 130
1.1 Books 131
1.2 Case reports 132
1.3 Government 132
1.4 The Internet 133
1.5 Lawyer 133
2. Working with Drafting and Interpretation Principles 134
2.1 Language tracing 134
2.2 Using templates 136
2.3 Defining terms 137
2.4 Rules of interpretation 137
2.5 Boilerplate 138
3. Summary 138
11 Use Plain Language 139
1. What Is Plain Language? 139
1.1 Clarity 139
1.2 Conciseness 140
1.3 Readability 140
2. Rules of Plain-Language Writing 141
3. What to Avoid in Plain-Language Writing 142
4. Keep It Plain and Simple, but Not Too Plain and Simple 143
5. Summary 144
12 Define Keywords and Phrases 151
1. Why Should You Define Words and Phrases? 151
2. How Do You Know Which Words or Phrases to Define? 152
3. How to Define Keywords and Phrases 153
3.1 Rules for constructing definitions 153
3.2 Formal aspects of presenting a definition in a contract 155
4. Summary 157
Contents vii
13 Use (But Don’t Misuse) Modifiers 161
1. Using Modifiers in a Contract: Proceed with Caution 161
2. When to Use a Modifier 161
3. How to Choose an Appropriate Modifier 163
4. Using Modifiers Strategically 165
5. False Advertising and Unfair Competition Laws 166
6. Summary 166
14 Write with Authority 169
1. Use the Active Voice 169
2. Limit the Use of Pronouns 170
2.1 What is a pronoun and when should you use one? 170
2.2 Pronouns and gender 171
2.3 Indefinite pronouns 172
3. Follow the Rule, “One Idea: One Sentence.” 172
3.1 Avoid the run-on sentence 172
3.2 Use conjunctions properly 172
3.3 Minimize the use of subclauses 173
3.4 Keep using the active voice 173
4. Maintain Consistency 174
4.1 Achieving consistency 174
5. Summary 176
Part IV: Final Considerations 177
15 Add the Finishing Touches 179
1. What Are the Finishing Touches? 179
1.1 Proofread your contract 180
1.2 Edit your contract 180
1.3 Neatness counts 181
1.4 Use a second pair of eyes 181
1.5 Sleep on it 182
2. Why the Finishing Touches Are Important 182
3. Delivering the Contract to the Other Party 183
3.1 Ways of delivering a contract 183
3.2 Things to consider when delivering a contract 184
4. Summary 184
16 Reading Contracts 186
1. Why It Is Important to Learn to Properly Read a Business Contract 186
2. How to Properly Read a Contract 187
3. Redlining a Contract 187
4. Summary 190
viii Canadian Business Contracts Handbook
17 T he Amending Agreement 193
1. What Is an Amending Agreement? 193
2. What Does an Amending Agreement Do? 194
3. What Does an Amending Agreement Look Like? 194
4. Words of Caution Regarding the Amending Agreement 196
4.1 The need to reach agreement 196
4.2 Forms of amending agreement 196
4.3 Estoppel 197
5. Summary 197
Conclusion 204
1. Part I: Understanding Contracts 204
2. Part II: The Formal Elements of a Written Contract 205
3. Part III: The Elements of Style 205
4. Part IV: Final Considerations 206
5. Be Creative 207
Samples
1 Letter Agreement 34
2 Formal Agreement 37
3 Standard Form Agreement 61
4 Multiparty Agreement 63
5 Letter of Intent 80
6 Liability Terms 98
7 Insurance Terms 100
8 Presenting the Boilerplate 116
9 Plain-Language Words and Phrases 147
10 Legal Words and Phrases 148
11 Commonly Used Definitions 158
12 Using Modifiers 167
13 Redline 191
14 Amending Agreement (Formal) 198
15 Amending Agreement (Letter) 201
Worksheets
1 Quiz: Contract or No Contract 14
2 Fact Gathering 128
3 Plain-Language Practice Sheet 145
4 Finishing Touches Checklist 185

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Published by
Published 01 October 2019
Reads 0
EAN13 9781770408920
Language English

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