Singularity Law

This year, for the first time, I offered a course for law students on drafting and negotiating technology agreements. While a few students had drafted contracts before, most of them were lucky to have read a couple of contracts (such as an apartment lease and an auto purchase agreement). Although they had all taken contract law in their first year, that class seldom gets into looking at actual contracts. Instead, it talks about the “law” of contracts. So most of the students were starting from ground zero. What to do?

There were no casebooks available, nor any good books of any kind. So, the first thing was to prepare materials. Surprisingly, except for a few clauses that seem to be heavily litigated — warranty disclaimers, choice of laws, etc. — most clauses you are likely to find in a technology agreement have never been analyzed in any reported court decisions — either at the state or federal level. So the materials consisted mainly of selected provisions of the UCC, Restatement, state laws, the few court decisions that were available, and a number of articles that look at various boilerplate provisions. I supplemented those materials with excerpts from my book — Scott on Computer Law – which has several chapters devoted to contract clauses. That gave a good core of materials to teach from.

The second issue was how to teach a contract drafting course to students who had never read a contract, let alone drafted one. I decided to approach it like one would a foreign language — start with lessons on the “vocabulary” of contracts and some simple “grammars,” gradually introducing the students to more complex structures and eventually complete agreements. So we started with simple boilerplate clauses; ripped them apart and rebuilt them. We looked at multiple versions of the same clause and discussed the relative strengths and weaknesses of each version from the perspective of each of the parties to the transaction.

In each class, we had an in-class assignment, which consisted initially of having the students draft one or two boilerplate clauses based upon the facts of a short hypothetical. The facts prevented the student from just using an off-the-shelf clause. Their take-home assignments were to draft short agreements or sections of longer agreements (e.g., a non-disclosure agreement, a work-made-for-hire section of a software development agreement). Again, the writing assignment was based on a hypothetical fact situation, which prevented them from simply cribbing a form clause and not modifying it to fit the facts.

After 3-4 weeks, the students were ready to start drafting short contracts. In the meantime, the in-class discussions had moved from individual clauses to specific types of contracts. We dissected and analyzed a variety of common agreements, including licenses, development agreements, distribution agreements, employment agreements, web site terms of use, privacy policies, outsourcing agreement and website hosting agreements. We explored how the same or similar clauses showed up in virtually every agreement, and when the clauses were different, why there were different. We discussed the goal-oriented approach versus the confrontational approach to contract drafting, how contracts often create long-term relationships like marriages that need to allow for problems and disagreements along the way with dispute resolution mechanisms to avoid litigation.

We had two guest speakers along the way — one lawyer and one experienced business consultant — who provided valuable, real-world insights on the contract drafting process and how lawyers and clients can best work together to achieve businesses’ goals through that process.

Their final project was to draft and negotiate the terms of a computer systems acquisition agreement. The class was divided into “law firm” teams. Half the teams represented the vendor, while the other half represented the customer. Each law firm was provided basic information on the types of computer system being acquired plus several “internal memos” from their “client” telling them specific requirements, needs, concerns, of their client. Each team then had an opportunity to have a live presentation from their “client” and a Q&A session with the client. Then, each law firm prepared a Term Sheet and turned that Term Sheet into a full draft agreement. Each law firm then received a copy of an agreement drafted by a law firm for the other party and were given a week to compare their agreement with the other firm’s agreement and make a list of crucial changes that needed to be negotiated.

Each pair of law firms then had a three-hour negotiating session to see how many of the disputed terms could be agreed upon. The last assignment was to redline their draft agreements with the agreed-upon changes, and prepare a memo on the unresolved provisions and why the parties were unable to resolve them.

In a very short period of time, all of the students were able to turn out contract clauses, sections of contracts, and eventually entire agreements that were better than many I had seen drafted by “experienced” transactional lawyers. The students felt that they had not only learned a great deal about contract law and the contracting process, but that they had gained the confidence necessary to draft even the most complex documents by breaking them down into manageable clauses and groups of sections and then building those sections into a complete agreement. Every student felt that the hard work had been well worth it, and all of them said that they would recommend the course to their colleagues. A few said that this was the most useful course they had taken in law school.

So . . . if you are looking for a good law clerk or associate with contracting drafting experience, let me know.