ng a Contract Assignment ? INTRODUCTION: As a business owner and/or employer, you will need to...

ng a Contract Assignment ? INTRODUCTION: As a business owner and/or employer, you will need to draft, prepare and negotiate contracts with other businesses, employees, and independent contractors. While you may need to retain an attorney for many contracts, you should have a basic understanding of what clauses to include (and why) in various types of contracts. In this assignment, you will use the knowledge and information you have learned in this course to draft a general contract “checklist” as well as contract clauses based on the scenarios set forth below. Before drafting a contract, you should first understand the goals, purpose and scope of the contract. Also, try to anticipate any problems or liability that might arise in the relationship between the parties and use contract language to avoid problems or limit liability or damages. Be as clear, complete and thorough as possible in drafting the contract. You are allowed to do some research and use other contract forms to assist you, but you must attach copies of any contracts you refer to or use in completing the assignment. Don’t simply cut and paste! HOMEWORK POINTS - TYPE your responses! Contract Assignment: 38 points; Reflection: 2 points – TOTAL – 40 points CONRACT CHECKLIST: You Are the CEO of Aimee Architect and Engineering Firm (AAA), a Des Moines, Iowa, firm with 20 employees. Your company provides architectural services to businesses and individuals. Your company often contracts with general contractors. You know that you will need to draft and negotiate numerous contracts. Accordingly, you think it would be a good idea to have a “Contract Checklist” containing clauses that you might use in a variety of contracts. Create that TYPED checklist—it should contain 10 to 12 clauses likely to be used in any contract. Do not simply list the clause (e.g., arbitration clause), but include proposed language. (10 points) EMPLOYER/EMPLOYEE Contract: AAA has employed Erin Employee, an architect, for 4 years. AAA is worried about losing some of its key architects, including Erin, to a competitor that recently moved to Des Moines, Iowa. AAA has invested time and money (about $500/year per employee) in training its architects, including Erin. Erin is familiar with many of AAA’s high-end clients, is aware of many of AAA’s company practices and pricing, and is an excellent architect. Clients adore her. AAA does not want Erin to leave, and you want her to sign a non-compete/non-disclosure agreement. AAA is considering giving Erin a bonus in exchange for signing an agreement, if you think that is wise. Finally, AAA wants to make clear that Erin remains an employee-at-will. AAA has learned that Erin likes working at AAA, but she is not sure she wants to be locked into a long-term non-compete agreement. Draft and TYPE contract clause(s) that address all of AAA’s concerns and goals. (8 points) CONTRACT BETWEEN AAA AND GARY GENERAL CONTRACTOR. AAA plans to enter into a contract with Gary General Contractor (GGC) to create the architectural plans for a Des Moines recreational and health center for Gary’s client, Healthy Living. AAA wants to limit its exposure to liability to GGC based on negligence, breach of contract or any claim allowed under law. AAA wants to limit that liability to the amount GGC is paying AAA for its architectural services: $20,000. AAA also wants to exclude any consequential or punitive damages. AAA will also consider an “opt out” option for GGC, which would remove the $20,000 cap on damages, but that would require that GGC pay AAA a higher fee. Draft and TYPE contract clause(s) that addresses AAA’s goals and concerns. Be sure to consider including language that will increase the likelihood that the clause will be upheld in the courts (and not be viewed as a penalty). (8 points) CONTRACT BETWEEN AAA AND BILLY’S BAND. AAA has its annual retreat in June, and AAA wants to hire Billy’s Band, a Nashville band, to play at the first night of the retreat, on June 2 from 7-10pm for $10,000. Last year, the band AAA hired failed to show up (after AAA sent them a $3000 deposit!), and AAA wants to avoid a mess like that again. (AAA had not signed a contract last year, and it never saw that $3000 again.) Thus, AAA wants a clause that ensures it will get its deposit back if Billy’s Band breaches. Also, AAA was hoping to include some clause that provides that if Billy’s Band breaches and does not show up, Billy’s Band must pay liquidated damages of some reasonable amount. You want this clause to hold up (and not be viewed as an unenforceable penalty.) AAA wants to make sure any disputes or breaches related to the contract are resolved in Polk County, Iowa state or federal court and that Iowa law applies. AAA wants to include language that confirms that Billy’s Band is an independent contractor, not an employee or agent of AAA. Finally, AAA wants to make sure it is not held liable for any injury, loss, damage or other liability arising from the services provided by Billy Band or for any breach of the contract or Billy Band’s negligence. (Sometimes these bands can get kind of crazy!) AAA has heard that companies sometimes use “indemnify and hold harmless” clauses in these situations to limit their liability. The last thing AAA wants is to be on the hook for the negligence of Billy’s Band! Draft and TYPE contract clauses that address AAA’s goals and concerns.

Homework Answers

Answer #1

Ans 1: Contract Checklist

1. Scope of service

The scope services provided should be mutually agreed and clearly specified.

It should be precise and without ambiguity and should clearly mention the deliverables and value to the money

2. Confidentiality

Both the parties should secure the confidential information of each other

The confidential data/information includes suppliers, business associations, financial information and should be protected from disclosure from potential competitor.

3. Safety

This clause should clearly mention the responsiblity of safety on the site during the work in progress as well as after completion of work

It should clearly define the clients and service providers responsibilities respectively for any consideration arising due to saftey issues.

4. Limitation and Liability

This clause will specify the maximum liability that AAA would be liable in case there is any claim on the projest by the client.

It should specify the limitations of the service provided and the scope so that the libality of service provider is clearly defined in case of any arises in work in progress and in future.

5. Consequential damages

This clause should mention the wavier from consequential damages that has happen due to the faliuer of any other third party.

The clause should be negotiated before signign the contract

6. Choice of Law

In this clause there should be agreement between the parties that the contract terms should be interpeted and governed by the laws of specific state.

7. Indemnity

The indemnity would provide guranteed remedy for a specific event.

It should clearly mention the commercial aspect as well.

9. Validity

This can be a specific date or a event of completion or agreed term.

10. Termination

This clause will enable the termination of contract prior to expiry

This clause will set automatic trigger to dissolve the contract.


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