Materi Workshop Contract Drafting yang disampaikan oleh Bapak Dendi Adisuryo yang memiliki background sebagai commercial lawyer akan memberikan pemahaman dan pandangan kepada peserta workshop mengenai beberapa segi hukum kontrak, norma kepatutan hukum kontrak dalam proses penyusunan kontrak serta mengenai kontrak atas transaksi bisnis yang bersifat lintas negara.
2. My Background
Audience: In house - external counsel
Methodology
3. Agenda
Introduction
Legal communications
Contract forms and purposes
Preliminary agreement forms
Structure and format of agreements
General drafting pitfalls
Simulations
4. Introduction
A contract is an agreement between two or more parties that
creates an obligation on all parties to perform (or not perform) a
particular action or set of related actions.
Contract law determines what makes a particular contract
enforceable, and provides remedies when a contract is breached.
If you are not careful, a contract may not be enforceable when you
want it to be, and may be enforceable when you don’t want it to be.
Working with a qualified attorney on all significant issues is the only
certain way to make sure your contract works how you intend.
5. Legal Communications
Whether a contract exists depends on whether parties have reached
a mutual agreement – which can be oral.
Generally a written contract is entered into to protect the parties
against misunderstandings and to clarify the obligations and
particular agreement between parties.
Contracts can cover a wide range of circumstances, both in
business settings and personal relationships. Business contracts
are varied and can cover all aspects of a business, including those
with customers, employees, investors and business partners.
6. Whats a good contract?
A contract where each party gets what it bargained for – without any
disruption or disputes – during or post performance
Because business people need to run their business, not spend
more time with lawyers
7. Business person vs Lawyer
Business people: risk takers who look for practical and quick
solutions with the ultimate desire to obtain profit / grow the business
Lawyers: risk adverse / avoiders, prone to legalese to justify their
existence, often not knowledgeable in the industry and live by
bilable hours
The gap needs to be closed in the contract process.
8. Preparation for Contract Drafting
Understand client’s business intention and goals
Measure positioning of your client and the opposite party: the
purpose is to develop a bargaining position during negotiation and
implementing stage
Understand the regulatory and legal framework of the proposed
transaction
Understand all constraints that may be coming from the prevailing
laws, regulations and government policies, and how to minimize or
solve it effectively
9. Preparation for Contract Drafting
Assessing constraints in negotiation process and project
implementation
Understand the deal structure and alternatives of option
Setting up of a strong and effective negotiation team
Composing strategy and techniques of negotiation and drafting
Utilization of database, R & D materials & studies
Applying best practices and authoritative precedence
10. Preparation for Contract Drafting
Conflict check in the industry
BKPM Negative List of Investments
Investment incentives, guarantees, and supports available
(regulatory or special treatment for industry or location)
Tariff barriers; export and import constraints
Regulatory issues (investment, industry, trade, anti monopoly,
environmental, labor, local regulations)
Competitors in the industry
Location of the projects: access to infrastructure
Non-regulatory issues (local community, politics, and social issues,
governance, etc)
11. Contract forms and purposes
Below is a list of other types of contracts that are commonly used in
commercial businesses:
Arbitration Agreement
Asset Purchase Agreement
Assignment Agreement
Bonus Agreement
Collaboration Agreement
Consulting Agreement
Credit Agreement
Deferred Compensation
Plan
Development Agreement
Distribution Agreement
Employee Stock Plan
Employment Agreement
Equipment Lease
Franchise Agreement
Guaranty Agreement
Indemnification Agreement
Joint Venture Agreement
Lease
License Agreement
Loan Agreement
Manufacturing Contract
Merger Agreement
Non-Disclosure Agreement
Operating Agreement
Promissory Note
Repurchase Agreements
Sales Contract
Services Agreement
Shareholder Agreement
Stock Option Agreement
Stock Purchase Agreement
Supply Agreement
Trademark License Agreement
Underwriting Agreement
Voting Agreements
Waiver Agreement
12. Contract forms and purposes
Shares CSPA
One of option in acquisition
Transfer of shares after completion of conditions
Terms and conditions => pre closing, at closing, post closing
Offtake
Commitment to supply and purchase for certain period of time
“take or pay”
Price adjustment
JVA
Arrangement between partners in business
Rights, roles, responsibilities
Tag – drag along rights
13. Contract forms and purposes
Farm in – farm out
in consortium – to sell “interest”
Common in oil and gas, or exploration business
Investment agreement
Similiar with JV, but easier exit
Option to buy / convert the investment into equity
14. Preliminary agreement forms
Memorandum of understanding
Initial understanding on commercial terms
A set of mechanism to proceed with the transaction
Time schedule
Costs of transaction
Head of Agreement
Spirit of transaction
Key feature of the transaction
Details terms will be regulated in further documents
15. Preliminary agreement forms
Term sheet
Tools to ease the high level management to discuss / negotiate
Bullet points
Summary of commercial points
NDA/Confidentiality agreement
Promise not to disclose information / documents obtained during the process of a
transaction
Survival periods
exclusion
17. Structure and format of agreements
Parties
Recitals
Interpretation
General terms
Commercial terms
Price Adjustment
18. Simulation II – Stage of Transaction
Simulation II.a – Payment of purchase price
19. Structure and format of agreements
Warranties, representations and undertakings
Liquidated damages
Boilerplate
Language
Choice of law / forum
Confidentiality
Tax and costs
Period
Termination
Notices
Entire Agreement
Force Majeure
Severability
Counterparts
20. Simmulation III – Representation, warranties
and undertaking
Simulation IIIa - Liquidated Damages
23. General drafting pitfalls
Hasty, Inadequate or Non- Existent Due Diligence
Drafting a clause or section from scratch.
Inconsistently defining terms and phrases.
Leaving out key details
Lack of details in mechanism
Not spending enough time on choice of law, forum, dispute resolution, damages, and
limitation of liabilityeaving out key details
Relying on Word’s Track Changes feature
Running out of time to review
Assuming that outside counsel provided perfect work product.
Not having a system for managing standard forms
Forgetting what version you sent and to whom.
What is the exact amount to be paid? When? How? Conditions of non payment?
Delay..what the cpnsequence?
Shipping / delivery? Demurage, dispatch
Dont understand what we drafted [??]
24. Simmulation V – Details of Mechanism
(claim of past liabilities of tax and
outstanding payment to vendors)