ACP Contract Drafting & Redlining 2 — Questions and Answers
Question 1: When redlining a contract, what does a strikethrough on existing text signify?
- Text the reviewer proposes to delete (Correct answer)
- Text that has already been accepted
- Text that is legally required
- Text added by the original drafter
Correct answer: Text the reviewer proposes to delete
Strikethrough formatting indicates language the reviewing party proposes to remove from the agreement.
Question 2: Which contract clause allocates risk between parties for unforeseen events such as natural disasters or pandemics?
- Indemnification clause
- Force majeure clause (Correct answer)
- Limitation of liability clause
- Hold harmless clause
Correct answer: Force majeure clause
A force majeure clause excuses performance when extraordinary events beyond a party's control prevent fulfillment of contractual obligations.
Question 3: A 'representations and warranties' section in a contract primarily serves to:
- Define the payment schedule
- Allocate liability for breach
- State factual assurances each party makes to the other (Correct answer)
- Outline the dispute resolution process
Correct answer: State factual assurances each party makes to the other
Representations and warranties are statements of fact and promises that induce the other party to enter the contract, forming a basis for reliance.
Question 4: In contract drafting, what is the function of a 'recitals' section (also called 'whereas' clauses)?
- To define legally binding obligations
- To provide background context and purpose of the agreement (Correct answer)
- To list the governing law
- To specify remedies for breach
Correct answer: To provide background context and purpose of the agreement
Recitals provide explanatory background, purpose, and context for the agreement but are generally not operative or binding provisions.
Question 5: Which drafting principle recommends using 'shall' only to impose a duty on a specific party?
- The plain language movement
- Bryan Garner's contract drafting guidelines (Correct answer)
- The Restatement (Second) of Contracts
- The UCC Article 1 definitions
Correct answer: Bryan Garner's contract drafting guidelines
Bryan Garner's guidelines recommend 'shall' exclusively for imposing obligations, avoiding its use for conditions, discretion, or predictions.
Question 6: An 'integration clause' (merger clause) in a contract is designed to:
- Require the parties to merge their businesses
- Establish that the written contract is the complete and final agreement (Correct answer)
- Allow future modifications without formality
- Incorporate external documents by reference
Correct answer: Establish that the written contract is the complete and final agreement
An integration clause states that the written agreement supersedes all prior negotiations and representations, preventing introduction of extrinsic evidence.
Question 7: When reviewing a redlined contract, a paralegal notices 'clean' and 'redline' versions. What does the 'clean' version contain?
- Only the deleted text
- The document with all tracked changes accepted, showing the proposed final form (Correct answer)
- The original unedited draft
- Only comments and annotations
Correct answer: The document with all tracked changes accepted, showing the proposed final form
The clean version reflects the contract as it would read if all proposed redline changes were accepted, allowing parties to review the proposed final form.
ACP Contract Drafting & Redlining 2
When redlining a contract, what does a strikethrough on existing text signify?