1. On a scale of 1 to 10, how successful do you think you were overall in achieving your client’s objectives?
2. On a scale of 1 to 10, how successful do you think your opponent was in achieving his / her client’s objectives?
3. Tick the appropriate box to indicate your opinion on how successful you were regarding the outcome as far as monetary compensation was concerned:
a) no specific amount of monetary compensation was agreed upon
b) the amount agreed upon was far higher than I anticipated would be agreed c) the amount agreed upon was slightly higher than I anticipated would be agreed d) the amount agreed upon was very close to the amount I anticipated would
be agreed
e) the amount agreed upon was slightly lower than the amount I anticipated would be agreed
f) the amount agreed upon was much lower than the amount I anticipated would be agreed
4. How would you describe your opponent’s attitude to you in the course of the negotiation. (For instance was it conciliatory or aggressive etc.?)
5. Which argument did you put forward which proved to be the most effective / per- suasive and why?
6. Which argument did your opponent put forward which proved to be the most effective / persuasive and why?
7. In what way (if any) would you plan and / or negotiate differently next time?
Chapter 4
■Boardroom battle!
Removal of a director
■ A director can be removed by passing an ordinary resolution (OR) at a shareholders’
meeting, per s. 303 Companies Act 1985 (CA ’85)
■ Requires simple majority (i.e. over 50% of votes cast) in favour
■ Special notice of OR required (i.e. 21 days), per s. 303(2) and s. 379 CA ’85
■ Director concerned is entitled to address the meeting
■ If director concerned is also a shareholder then articles of company may provide for
‘weighted’ voting rights, i.e. a Bushellv Faithclause
■ Shareholders’ power to remove a director under s. 303 CA ’85 does not deprive direc- tor concerned of right to claim damages for breach of contract
■ Articles of a company can also provide for a director becoming disqualified from con- tinuing as a director in specific circumstances (e.g. upon bankruptcy)
■ Any service contract provided to a director for over five years’ duration requires ap- proval by shareholders (s. 319 CA ’85)
Law notes
Conditional sentences
Conditional sentences are commonly used when negotiating a settlement. For example:
If you pay within 14 days Mr Salleh will accept £100,000 in full and final settlement.
Note that in the first part of this structure we have ‘if’ and present tense followed by ‘will’
in the second clause. In this way the person making the settlement offer (the offeror) can make it clear that the settlement being proposed is subject to a condition. (I.e. that pay- ment is made within 14 days.)
Conditional sentences can similarly be used to issue a warning. For instance:
If you do not accept this offer we will proceed to court.
The word should is commonly used in a professional context with this future form of conditional sentence in place of if. This conveys a more reserved and formal impression to the reader or listener. Thus:
Should you encounter any further difficulties in the future please inform me.
The word shouldis also used in a professional context in place of the word wouldin other present or future forms of conditional sentences. Thus:
I should also make clear that this offer is conditional upon early acceptance.
Conditional sentences can also be used in a more hypothetical form which is also encountered in legal negotiations. This involves the use of the word werefollowed by the infinitive with ‘to’. Thus:
Grammar notes
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If we were to make an offer there would have to be some assurance that this would be kept secret.
It is also possible to invert werealong with the subject and to omit if. Thus:
Were we to make an offer there would have to be some assurance that this would be kept secret.
Legal English also uses conjunctions in conditional sentences, such as:
until; although; provided that; unless; in order that; on condition that etc.
E.g.We wouldn’t make an offer unless there was an assurance that this would be kept secret.
Modal verbs (such as may,can, could,should and ought to) can also be used where a possibility rather than a certainty is being discussed. Thus:
If you can assure us this will remain confidential we may put forward an offer.
Chapter 5 Marketing agreements
Learning Objectives
By completing the exercises in this chapter you will:
■ Analyse a marketing agreement, taking account of a client’s instructions
■ Consider different types of marketing agreements
■ Amend a marketing agreement in accordance with a client’s instructions
■ Develop vocabulary relevant to marketing agreements
■ Develop grammatical and written word skills relevant to drafting legal documentation
■ Become familiar with realistic legal precedents and how to use them for drafting
■ Acquire practice in drafting commercial documentation and achieving clarity of meaning in your drafting
Introduction
There are various types of marketing agreements including:
■
Agency agreements
■
Distribution agreements
■
Franchising agreements
■
Joint venture agreements
Agency agreement
A traditional sales agency agreement is an agreement whereby a company (known
as the principal) authorises another company or individual (known as the agent) to
sell the principal’s goods on its behalf. The agent thus sells the goods on behalf of
the principal (rather than purchase the goods itself). When a customer purchases
from the agent the contractual relationship (known as ‘privity of contract’) will
thereby legally exist directly between the principal and the purchaser (the agent re-
ceiving commission on such sales).
Distribution agreement
This is an agreement whereby a company (termed the supplier) actually sells its goods to another company (the distributor). When the distributor then sells the goods on to its own customer there is no contract created between the supplier and the final customer (the contract being between the distributor and its customer). The distributor therefore receives no commission from the supplier, instead earning profit from the ‘mark-up’ between the price it paid the supplier and the price it sold the goods on for. (Distribution agreements must be drafted very carefully since many agreements which restrict competition and therefore consumer choice are now illegal under European Community law.)
Franchise agreement
A company (the franchisor) can expand its business nationally and internationally by entering into franchise agreements with other parties (known as franchisees).
This is known as franchising a business. Franchising is appropriate to businesses with an established brand. A franchise agreement imposes requirements on the franchisee to operate the business in accordance with a uniform business model (for instance by stipulating the colour scheme and interior layout of the franchisee’s premises). The franchisee benefits however by being associated with a well recog- nised brand-name. Many well-known high street brands are franchises, such as fast-food restaurants.
Joint venture agreement
This is an arrangement in which two or more businesses agree to co-operate or in other words ‘join forces’ on a particular business venture or project. This enables companies to undertake initiatives which they may not have the resources to under- take individually, sharing risks while also combining their financial and skills resources. Care is again required in drafting joint venture agreements in order to avoid contravening European Community law competition rules and/or US com- petition law (known as ‘anti-trust’ law).
TASK 1
Answer true or false to each of the following questions based on the text above.
1. An agent purchases goods directly from a principal.
2. Under an agency agreement a contract exists between the principal and ultimate customer.
Exercise 1 – comprehension
TASK 2
Answer the following questions.
1. Name one company or brand-name you can think of which is a franchise.
2. What is an agent’s income from sales known as?
3. How does a distributor earn income on sales?
4. State one benefit to a company of entering into a joint venture agreement.
Chapter 5
■Marketing agreements
Drafting agreements
Drafting is an important skill for a lawyer. Drafting in the legal sense means to com- pose legal documentation (including for instance legal correspondence, court orders, contracts and legislation). Precision is essential when drafting legal agree- ments; otherwise there may be scope for ambiguity in the course of interpreting the intended meaning of the terms of the agreement. This in turn can lead to subse- quent dispute between the parties to the agreement. Drafting practice provides the opportunity to develop your skill in the use of legal English.
The following agreement relates to the appointment of an agent by an aircraft manufacturer called Cadmium Aerospace Limited. Complete this sales agency agreement on behalf of Cad- mium Aerospace Limited by selecting the appropriate word to enter in each blank space from the alternatives in brackets.
Exercise 2 – document completion
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