Contract Drafting & Redlining Flashcards
7 cards from real ACP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Contract Drafting & Redlining flashcards as text
When a paralegal flags a 'unilateral modification' clause allowing one party to change terms without consent, the primary concern is:
Answer: Lack of mutual assent and potential unenforceability
A clause permitting unilateral modification may be challenged for lacking consideration and mutual assent, which are essential elements of a valid contract modification.
A 'step-in right' clause in a project agreement grants:
Answer: A party's right to assume the other party's performance obligations if they default
Step-in rights allow a party (often a lender or project owner) to take over performance of a defaulting counterparty's obligations to protect the project from failure.
Under the UCC, what default rule applies to the 'battle of the forms' when both parties exchange forms with conflicting terms?
Answer: The contract consists of the terms that match; conflicting terms 'knock out' each other
UCC § 2-207's 'knock-out rule' treats conflicting terms as canceling each other out, with UCC gap-fillers supplying the missing terms.
A 'no-shop' clause in an acquisition agreement prohibits the target company from:
Answer: Soliciting or entertaining competing acquisition offers during negotiations
A no-shop clause protects an acquirer's investment in due diligence by prohibiting the target from seeking or negotiating alternative bids during the exclusivity period.
In contract drafting, 'materiality scrapes' in representations and warranties sections are used to:
Answer: Remove all materiality qualifiers for purposes of calculating indemnification
A materiality scrape removes or ignores materiality qualifiers when determining whether a representation was breached and calculating resulting indemnification losses.
The 'contra proferentem' rule of contract interpretation holds that:
Answer: Ambiguous language is construed against the party that drafted it
Contra proferentem places the risk of ambiguous drafting on the drafter by resolving unclear language in favor of the non-drafting party.
A 'clawback' provision commonly found in executive employment contracts allows an employer to:
Answer: Recover previously paid compensation if specified triggering events occur
Clawback provisions permit recovery of bonuses or other compensation already paid if, for example, financial restatements reveal the performance metrics were not actually met.