Lecture 1
Learning objectives
Wrapping up and expand your knowledge about contracts and other legal documents
Expanding knowledge of and skills for positioning the lawyer in business
Acquiring skills for contract negotiating and drafting
Understanding the basics of financial statements (and valuation)
How to reach the goals:
Brain food:
o I. Introduction: relating law to business
o II. Contract lawyering
o III. Business lawyering in action
o IV. Business negotiations
o V. M&A process in a nutshell
I. Business and contracts in overview
1. Business entities
2. Business and financial relationships
, 3. Legal documents/work
Contract process: practice
,Clip 1
We daily enter into agreements. Most of these kinds of contracts happen spontaneously.
Let’s take a look at the two steps procedure.
Contract process in legal perspective
The first step is the step called ‘offer’.
What is an offer?
o Statement of willingness to contract on specified terms with the intention that
acceptance creates a binding contract.
It includes a number of specificities. The willingness, specified terms, intention, all of
them can create also problems. For which the law has to offer solutions.
It is not the same as an invitation to treat and accept.
o If some of these elements are not present, the question is then whether or not
you will have an offer. The answer to that is no. It is an invitation to treat. To
start negotiations or to simply inform you. It can be far from clear in some
situations whether it needs to be considered as an offer or invitation to treat. It
has something to do with the willingness of the party. That is not always
visible and could create some problems.
Revocation
o It could also happen that somebody is offering something and shortly after he
finds out that this offer is including a mistake. Of course, he wants to modify
his offer. Is it possible to revoke his offer? How can his offer be revoked?
These issues are treated in the law, but in different ways in different countries.
Overall, contract law considers the offer as the first step of the two-step procedure.
The second step is acceptance.
What is acceptance?
o Unconditional assent, communicated by the offeree to the offeror, to all terms
of the offer, made with the intention of accepting.
This second step contains a number of elements. Things could also go wrong. It needs
to be communicated, it needs to be unconditional, it needs to be with intention.
All the terms need to be contained in the offer and communicated by the offeree. But
is it possible that an offer contains all terms?
o Obviously, this is not. It is impossible to have a complete contract. One cannot
predict all the future things that can happen once you have offered and it is
accepted by somebody and the contract is executed.
o Example: you ordered a cup of coffee to go. When you pick it up, it is
unexpectedly hot and you drop the cup and you burn yourself. The likelihood
that it is provided in the offer what to do in the case that the temperature is too
hot and that you drop the cup of coffee and you burn yourself is quite low.
All terms?
What about the non-specified terms?
o In particularly in business, what you see is that these standard terms are used.
But what you also see in negotiations is that both parties quite often believe
that their conditions that they have provided will be applicable. However, this
is not necessarily the case. Also then it occurs that both parties, when they
actually have a problem during the executing of the contract, refer to their own
conditions, but they both do. Then another discussion is started and that needs
, to be resolved. Here, the law offers solutions. But this has not been
harmonized worldwide and different countries apply different solutions.
o Standard terms and battle of the norms:
First shot approach
The first that enters into the negotiation faze that offers you
something and refers to its general conditions that will be
applicable, that those conditions will be applied if later onwards
during the execution of the contract something goes wrong.
Last shot approach
The last one before entering into the contract that referred to
these conditions, those conditions will be applicable.
Knock out approach
You simply refer to both conditions where they are the same. If
you provide in a condition that is in both standard terms
provided, then you can make use of it. All the other ones are
kicked out. The consequence is that you most likely already
need a judge to intervene in order to find out which one can be
used and which one will be knocked out.
Loudest shout approach
Makes use of those clauses that are the clearest, but in fact also
kick out all the other ones that are unclear. Here you also need
a judge to intervene.
This is another problem that occurs and you need to find out, really, if possible, in
advance.
o The best solution is to make sure that, certainly when you are entering into
commercial relationships, to be explicit and provide a clear and
straightforward answer whose conditions will be applicable if there is a
problem that later onwards will emerge.
Other issues also come into play. For instance, what about once the offer has been in
fact accepted, how and what about communicating the acceptance?
Communicating the acceptance?
o Acceptance send approach (UK for non-instantaneous communication)
Once you hand over the acceptance to the postal offices, that moment
in time already, whilst in fact the offeror has not yet been informed that
the offer has been accepted, notwithstanding the contract already
emerges.
o Acceptance received approach (mailbox)(civil law)
The contract only emerges at the moment that the acceptance will
become in the sphere of the offeror, hence this received in the mailbox.
Consequently, you could say that solves a lot of issues. But not
necessarily. Even in those situations problems do pop up.
What about for instance receiving this mail in your spam box?
Does it emerge then or not? Is it in your sphere?
As you can see, this two-step procedure of offer and acceptance is in fact also solving a lot of
issues but is also creating new issues. Finally, if the offer and acceptance has been ended, this
part of the process, you enter into a contract and you can make the next step.
Learning objectives
Wrapping up and expand your knowledge about contracts and other legal documents
Expanding knowledge of and skills for positioning the lawyer in business
Acquiring skills for contract negotiating and drafting
Understanding the basics of financial statements (and valuation)
How to reach the goals:
Brain food:
o I. Introduction: relating law to business
o II. Contract lawyering
o III. Business lawyering in action
o IV. Business negotiations
o V. M&A process in a nutshell
I. Business and contracts in overview
1. Business entities
2. Business and financial relationships
, 3. Legal documents/work
Contract process: practice
,Clip 1
We daily enter into agreements. Most of these kinds of contracts happen spontaneously.
Let’s take a look at the two steps procedure.
Contract process in legal perspective
The first step is the step called ‘offer’.
What is an offer?
o Statement of willingness to contract on specified terms with the intention that
acceptance creates a binding contract.
It includes a number of specificities. The willingness, specified terms, intention, all of
them can create also problems. For which the law has to offer solutions.
It is not the same as an invitation to treat and accept.
o If some of these elements are not present, the question is then whether or not
you will have an offer. The answer to that is no. It is an invitation to treat. To
start negotiations or to simply inform you. It can be far from clear in some
situations whether it needs to be considered as an offer or invitation to treat. It
has something to do with the willingness of the party. That is not always
visible and could create some problems.
Revocation
o It could also happen that somebody is offering something and shortly after he
finds out that this offer is including a mistake. Of course, he wants to modify
his offer. Is it possible to revoke his offer? How can his offer be revoked?
These issues are treated in the law, but in different ways in different countries.
Overall, contract law considers the offer as the first step of the two-step procedure.
The second step is acceptance.
What is acceptance?
o Unconditional assent, communicated by the offeree to the offeror, to all terms
of the offer, made with the intention of accepting.
This second step contains a number of elements. Things could also go wrong. It needs
to be communicated, it needs to be unconditional, it needs to be with intention.
All the terms need to be contained in the offer and communicated by the offeree. But
is it possible that an offer contains all terms?
o Obviously, this is not. It is impossible to have a complete contract. One cannot
predict all the future things that can happen once you have offered and it is
accepted by somebody and the contract is executed.
o Example: you ordered a cup of coffee to go. When you pick it up, it is
unexpectedly hot and you drop the cup and you burn yourself. The likelihood
that it is provided in the offer what to do in the case that the temperature is too
hot and that you drop the cup of coffee and you burn yourself is quite low.
All terms?
What about the non-specified terms?
o In particularly in business, what you see is that these standard terms are used.
But what you also see in negotiations is that both parties quite often believe
that their conditions that they have provided will be applicable. However, this
is not necessarily the case. Also then it occurs that both parties, when they
actually have a problem during the executing of the contract, refer to their own
conditions, but they both do. Then another discussion is started and that needs
, to be resolved. Here, the law offers solutions. But this has not been
harmonized worldwide and different countries apply different solutions.
o Standard terms and battle of the norms:
First shot approach
The first that enters into the negotiation faze that offers you
something and refers to its general conditions that will be
applicable, that those conditions will be applied if later onwards
during the execution of the contract something goes wrong.
Last shot approach
The last one before entering into the contract that referred to
these conditions, those conditions will be applicable.
Knock out approach
You simply refer to both conditions where they are the same. If
you provide in a condition that is in both standard terms
provided, then you can make use of it. All the other ones are
kicked out. The consequence is that you most likely already
need a judge to intervene in order to find out which one can be
used and which one will be knocked out.
Loudest shout approach
Makes use of those clauses that are the clearest, but in fact also
kick out all the other ones that are unclear. Here you also need
a judge to intervene.
This is another problem that occurs and you need to find out, really, if possible, in
advance.
o The best solution is to make sure that, certainly when you are entering into
commercial relationships, to be explicit and provide a clear and
straightforward answer whose conditions will be applicable if there is a
problem that later onwards will emerge.
Other issues also come into play. For instance, what about once the offer has been in
fact accepted, how and what about communicating the acceptance?
Communicating the acceptance?
o Acceptance send approach (UK for non-instantaneous communication)
Once you hand over the acceptance to the postal offices, that moment
in time already, whilst in fact the offeror has not yet been informed that
the offer has been accepted, notwithstanding the contract already
emerges.
o Acceptance received approach (mailbox)(civil law)
The contract only emerges at the moment that the acceptance will
become in the sphere of the offeror, hence this received in the mailbox.
Consequently, you could say that solves a lot of issues. But not
necessarily. Even in those situations problems do pop up.
What about for instance receiving this mail in your spam box?
Does it emerge then or not? Is it in your sphere?
As you can see, this two-step procedure of offer and acceptance is in fact also solving a lot of
issues but is also creating new issues. Finally, if the offer and acceptance has been ended, this
part of the process, you enter into a contract and you can make the next step.
