RIGHT OF FIRST REFUSAL

The right of any party to assign, transfer or sell its interest in the shares shall, except for a

transfer to the party's heirs, personal representatives or conservators in the case of death or

legal incapacity, be subject to the non-assigning party's right of first refusal. This right of first

refusal shall be exercised in the following manner:

(I)The assigning party shall serve upon the non-assigning party a written notice clearly and

unambiguously setting forth all of the terms and conditions of the proposed assignment

and all available information concerning the proposed assignee, including but not limited

to information concerning the proposed assignee's employment history, financial

condition, credit history, skill and qualifications and, in the case of a partnership or

corporate assignee, of its partners or shareholders.

(2)Within ten (10) days after the non-assigning party's receipt of that notice (or if that party

shall request additional information, within ten (10) days after receipt of the additional

information), the non-assigning party may either consent or withhold its consent to the

assignment, or at its option, accept the assignment to itself or to its nominee upon the

terms and conditions specified in the notice. The non-assigning party may substitute an

equivalent sum of cash for any consideration other than cash specified in the notice.

(3)If the non-assigning party elects not to exercise its right of first refusal and consents to the

assignment, the assigning party shall be free to assign the shares to the proposed assignee

on the terms and conditions specified in the notice. If, however, the terms are materially

changed, the changed terms shall be deemed a new proposal, and the non-assigning party

shall have a right of first refusal with respect to the new terms.

7 Read the whole clause carefully and answer these questions.

1 Under which circumstances does the non-assigning party not have the right

of first refusal?

2 What kind of information must be included in the written notice?

3 What options does the non-assigning party have after receiving all of the

information it has requested?

8 Match these italicised expressions from the clause (1-7) with their definitions

(a-g).

1 legal incapacity

2 to exercisea right

3 to serve a written notice

4 receipt of notice

5 to withhold consent

6 to elect not to exercise a right

7 to change materially

a the act of receiving

b significantly

c to make use of

d to choose

e to deliver

f to deny permission

g inability

Unit 7 Contracts: assignment and third-party rights

E

"9

Whena lawyeris engagedto representa client in court in a contract-relatedlawsuit, a

gooddeal of time will bespentonthe following:

0 gatheringinformationabout the case;

0 collectingevidence;

0 researchingrelevantlegislation and legal precedent;

0 developinga strongline of argument.

Thestrengthof the argumentpresentedin court will significantly affect the outcomeof

the case.Generallyspeaking,the strength of suchan argumentdependsonseveral

factors:the clarity of the reasoning,the quality of the evidencepresentedto support it,

andthe lawyer'sskill in usinglanguageto conveyideas.

Thefollowing dialoguedealswith a lawyer'spreparationof a contract-relatedlawsuit. In

the first part of the dialogue,youwill hearRon,the lawyerpreparingthe case,talking

with Sam,a seniorpartnerin Ron'slaw firm, aboutthe facts of the case.

9 ..:;: Listen to the first part of the dialogue and tick the facts of the case Ron

mentions.

1 The Jones Corporation (the lessor) wanted to sell a restaurant to Keats (the

lessee).

2 Keats requires consent from the Jones Corporation to assign the lease to a

th ird party.

3 Prior written consent to assignment is not necessary.

4 The Jones Corporation is not permitted to withhold consent unreasonably.

5 Keats could not provide the information about the buyer that Jones

requested.

6 The prospective buyer withdrew his offer for the restaurant.

7 The buyer is suing Keats for breach of contract.

10Discuss the case with a partner. What kind of argument would you make in this

case? What would you have to prove in court?

11..:;: Listen to the second part of the dialogue, in which Ron mentions the

arguments he plans to use in court. What are the three points of evidence

Ron will use?

"93: e l

Theemail on page97waswritten by Ronto Samfollowing their discussionof the case.

Attachedto the email is a draft versionof the closingargumentwhich Ronintendsto

presentto the court.

12Readthe email and answer these questions.

1 What are the purposes of the email?

2 What would he like Sam to do for him?

Subject:Keats case: update and closing argument

Attached:Draft version of closing argument: Keats v. Jones Corp

HiSam

Haven't been around for the last couple of days -I've been in court on the Keats case. You asked me to

keep you posted on how things are going - I have to say, it's going pretty well. I've finished drafting my

closing argument for tomorrow. Would you mind looking at the draft and letting me know what you think

of it? I'm basically quite satisfied with it, but I would still appreciate getting some input from you.

It would be great if you could give me some feedback on this. Can I ask you to send it to me by

5 p.m.?That way I'll be able to make any changes that you think are necessary.

I look forward to hearing your suggestions.

Best

Ron

9 e 2: +

Some verbs in English are followed by another verb in the

others are followed by the to. The email above contains several

examples of verbs that are followed by another verb in the -ing form.,look at

this example from the text:

I've finished draftingmy closing argument for tomorrow.

It would be incorrect to write: I've finished to draft my closing argument.

You have to learn which verbs can be followed by which form.

13Look at the email again and underline other examples of verbs + -ing form.

14Read the following pairs of sentences and decide which one is correct.

1 a Ron considered asking a senior partner for advice.

b Ron considered to ask a senior partner for advice.

2 a The client decided settling the contract dispute in court.

b The client decided to settle the contact dispute in court.

3 a Case preparation involves interviewing witnesses.

b Case preparation involves to interview witnesses.

4 a By withholding consent, Jones risks being sued by Keats.

b By withholding consent, Jones risks to be sued by Keats.

5 a Sam suggests emphasising the idea that Jones withheld consent

deliberately.

b Sam suggests to emphasise the idea that Jones withheld consent

deliberately.

6 a The prospective buyer refused waiting any longer.

b The prospective buyer refused to wait any longer.

7 a The client mentioned having had an argument with his landlord.

b The client mentioned to have had an argument with his landlord.

S a The defendant delayed responding to the plaintiff's request.

b The defendant delayed to respond to the plaintiff's request.

Unit7 Contracts:assignmentandthird-partyrights

€

15Complete the sentences below using the correct form of the verbs in the box.

argue breach gather give hear re-draft sue tell

1 My client is considering ..............................

contract.

2 The defendant delayed ..........

of the lease.

3 Jones risked the assignment clause of the contract.

4 After reading his colleague's comments, the associate lawyer decided

his closing argument.

5 Among other things, preparing a strong case involves .........................

evidence.

6 I am looking forward to .......

present it in court.

7 My client refuses us about the difficulties he had with

his landlord.

S The defendant's attorney suggested that his client

needed more information before he could agree to the assignment.

. his landlord for breach of

his approval for the assignment

.. your closing argument when you

c n9 e

The draft of Ron's closing argument appears on page 99. Sam's comments on the text are

written in the margin.

16Read the closing argument and tick which kinds of information about the

prospective buyer the defendant's lawyer requested.

1 birth certificate

2 university diploma

3 documents proving experience in the restaurant business

4 a business plan

5 letter of recommendation

6 completed commercial lease application

7 CV

17Decide whether these statements are true or false.

DDDDD

DD

1 Ron's argument states that the court must decide whether consent to

assignment of the lease has been withheld unreasonably.

2 Ron maintains that it is justified for subjective criteria to playa role in

deciding whether to give approval for assignment.

3 Ron argues that delaying consent is not the same as withholding consent.

18Match the words in italics (1-5) with their definitions (a-e).

1 arbitrary considerations

2 credibility of witnesses

3 predicated on a dispute

4 defendant asserts

5 attempt is unavailing

a unsuccessful

b state something is true

c not based on reason, random

d can be believed

e based on

If ii wo..,sperfect, then

no jlAstitfi,o..bLereo..,son for

wW1hoLdi¥\glJones hM

nothmg to Lose if he

o..,pproveGl o..,ssignment.

Draft version of closing argument: Keats v. Jones Corp

1 In determining whether a landlord has unreasonably refused to

consent to an assignment, the court should consider only those

factors that relate to the landlord's interest in preserving the value

of the property, and the court must evaluate whether a reasonably

prudent person in the landlord's position would have also refused

to consent.

2 Arbitrary considerations of personal taste, convenience or

sensibility are not proper criteria for withholding consent under

such a lease provision. The court must determine the credibility

of witnesses and the weight to be given to evidence and draw all

justifiable inferences of fact from the evidence.

3 Here, when my client informed the defendant that he had a

prospective buyer for his business, the defendant's lawyer

requested that he provide personal and financial information on

the buyer, as well as a business plan and evidence of the buyer's

experience in operating a restaurant. The defendant's lawyer also

provided my client with a commercial lease application for the

buyer to complete. My client gave the defendant the completed

application and information on the buyer and promptly responded

to each of the defendant's requests for information.

4 As acknowledged by the defendant's lawyer, the proposed buyer

. ~perfect credit rating) Myclient's experton commercial

kEO!p:Jomt, neeGls to be lease transactions, whom the court must find persuasive, testified

stresseGl more: expert

~ that my client provided enough information for the defendant to

scA!::Jseno~t mformoJion make a decision and that its delay was unreasonable. Furthermore,

wo..,s pr~~Le eGl. Ago..,m, no there was evi ence that the defendant's delay in approving the

reo..,sonWJ reo..,son for. I d h b ' I'f" b

wW1hoLdi¥\ assignment was not re ate to t e uyer s qua I Icatlons, ut was

g. predicated on a dispute with my client involving a prior lawsuit

WhOvtkmcl ~ between the parties.

of evi,clence? =idence presented, the court must conclude that

sufficient evidence supports a determination that the defendant

unreasonably withheld consent to the assignment.

6 The defendant nevertheless asserts that it did not refuse consent,

but merely delayed giving my client an answer until additional

information was obtained. We reject this argument. The terms of

the lease provided that the defendant could not unreasonably

withhold consent, but this is exactly what it did. As defined in

Webster's Third New International Dictionary, 'withholding' means

'not giving', while 'refusing' on the other hand may require some

affirmative act or statement. Jones Corporation did not refuse

~

consent, it is true. But Jones Corporation's decision to delay

consent amounted to a withholding of consent, especially given

my client's indication thaQ!me was of the essen~ And, as noted

above, the evidence supports the determination that this decision

was unreasonable. Therefore, the defendant's attempt to

distinguish between withholding consent and refusing consent is

unavailing under the lease provision here.

ThGSpomt neeGls more

empho..,sGs 1 Jones Lost 0..,

slAii to keOvts ft,ve ~eo..,rs

o..,go- thOvt's the reo..,son

for the (A.,Y1[,mosii!:! \

DUi YOlArcLient express4J

mform hGS Lo...rtclLorocfl

thGS? In wrUing? If so,

then ScA!::Jso.

Unit 7 Contracts: assignment and third-party rights

€

..

n9 s n9

The closing

A lawyer will use

arguing in court, when negotiating a contract, when

a course of action to a client, or when discussing the

fill a position at a law all these

strong argument are the same:

a clear statement of the issue

the presentation of evidence

position;

the rebuttal (arguing against)

Evidence can take many forms, :

documents.

19Read Ron's closing argument in Reading 4 again and match these functions

(a-f) with the corresponding paragraph in the text (1-6).

a presenting the standpoint to be argued

b drawing a conclusion from the evidence

c rebutting the standpoint of the opposing side

d reviewing the evidence presented

e identifying the legal issue involved

f summarising the facts of the case

n9: e °9 n9

20On the basis of the notes written by Sam in the margin of Ron's closing

SAMP ANSW~EER argument, write a memo to Ron, indicating the changes he should make to

»p.292 strengthen his argument. You should:

0 begin the memo by referring to your previous contact;

0 state the reason for writing;

0 present the points you want to make in the form of a list;

0 close the memo with an offer to provide further help if needed.

Remember which verbs are followed by the -ing form rather than the infinitive.

nin9 2: c in9 e

Ron has made the changes in his closing argument which Sam suggested. You are going

to listen to Ronas he presents his closing argument in court.

21..::: Listen and discuss Ron's closing argument with a partner. Do you think it's

convincing?

ng 2: E ph c

Sam suggests that Ron

argument by

points. One way

begin a sentence

importance, e.g.

It is important to realise that

Another way to emphasise ideas is through

emphatic stress. Within a sentence in spoken

English, some words carry stress in accordance

with the rhythm of the language.

stress, however, involves stressing

certain words more than is natural to convey the

importance of a point or a particular meaning.

22Practise saying the following sentence, each time stressing the underlined

word. How does the meaning of the sentence change?

1 We're meeting the new client on Monday.

2 We're meeting the new client on Monday.

3 We're meeting the new client on Monday.

4 We're meeting the new client on Monday.

S We're meeting the new client on Monday.

23..;:: Listen again to the last section of Ron's closing argument (from Based on

the evidence...) and read the transcript on page 270. As you listen, underline

the words or phrases which are given emphatic stress.

24Read this excerpt from the closing argument aloud and stress the underlined

words.

In determining whether a landlord has unreasonably refused to consent to an

assignment, the court should consider onlv those factors that relate to the

landlord's interest in preserving the value of the propertv ...

25Underline the words in this extract from another closing argument which you

think should be given emphatic stress.

As we have clearly demonstrated here today, the contract concluded between my

client and the defendant, the software design company Glaptech, unambiguously

stipulates that the defendant agrees to create a computer program enabling all

customers to book a ferry passage online. Specifically, the contract expressly reads

that the program must work for "all customers using modern home computers."

We heard today, in the testimony of a recognized computer expert, that the concept

of "modern home computers" can reasonably be construed to include Apple

Macintosh computers. Therefore we must conclude that the creation of a program

which does not function on this very type of computer system constitutes a clear

breach of the contract concluded between my client and the defendant.

9 e 3: n

26Match these phrases from Reading 4 (1-3) with their paraphrases (a-c).

1 to give weight to evidence a to arrive at conclusions about facts based on the

evidence

b the evidence provides a basis for a judicial decision

c to consider evidence important

2 to draw inferences of fact from evidence

3 the evidence supports a determination

27Ron wins the case against the Jones Corporation on behalf of his client.

Using the phrases referring to evidence in Exercise 26, write three sentences

about the outcome of Keats v. Jones Corp.

Unit 7 Contracts: assignment and third-party rights

E

ng 5: pi e

It is essentialfor lawyersto keepinformedabout trendsand recentdevelopmentsin the

law. Lawyersare obligedto updatetheir knowledgecontinually,both in the interest of

their ownwork and in the interest of their clients.

Thetext belowis an excerptfrom a capital marketsreport publishedperiodicallyby a

largelaw firm. Theaim of this newsletteris to 'help our clients and friends understand

trendsand legal developmentsin variousareasof the law'.

28Readthe text quickly. What is its subject?

29Read the text again, then match each of these headings (a-e) with the

paragraph it summa rises (1-5).

a Other means of granting rights remain effective

b Extending third-party rights under certain circumstances

c The new law and when it takes effect

d A change in the principle related to contractual relationships

e Contract writers must consider third-party rights

1).......................

On 11 November, 1999, the Contracts

(Rights of Third Parties) Act 1999

became law in England, Wales and

Northern Ireland. The act applies to

contracts governed by English law or

the law of Northern Ireland entered

into beginning 11 May, 2000. It also

applies to each English law contract

entered into beginning 11 November,

1999 which expressly provides for its

application.

2).....................

The new statute has a significant

effect on a variety of contracts, and,

as contracts are at the heart of

business transactions, on business in

general. It fundamentally alters the

English law principle of privity of

contract that permits only parties to

a contract to enforce its terms, even

if the contract clearly purports to

confer a benefit on a third party.

3)........................

The statute enables a person that is

not a party to a contract to enforce

its terms if the contract expressly

provides that the non-party may do

so, or if one or more terms of the ,

contract purport to confer a benefit

on the non-party, unless on a proper

construction of the contract, it

appears that the parties did not

intend the term to be enforceable by

the non-party.

4).................

Therefore it becomes important that

contract drafters take into account

whether any third party has been

given rights under a contract. The

parties may agree in the contract to

exclude the application of the

statute. If this is not done, one or

more of the parties may be exposed

to unexpected claims by third

parties who were not intended to be

beneficiaries of the contract.

5)......................

The new act does not affect rights

granted to third parties by means

other than the act itself. Therefore,

if the parties to a contract wish to

grant third-party rights under it,

they may continue to do so through

the use of collateral contracts,

novations, assignments, deed polls,

trust relationships and other

established English law mechanisms.

30Answer these questions.

1 Which contracts does the new law apply to?

2 According to the new law, under which circumstances may a person who is

not a party to a contract enforce its terms?

3 What advice is given in the article to drafters of contracts?

31Match these words from the text (1-5) with their definitions (a-e).

1 enacts

2 construction

3 drafters

4 take into account

5 exclude

a writers

b leave out

c interpretation

d makes into law

e think about

32How does this new statute compare to the laws governing third-party rights in

your own jurisdiction?

"g

33The newsletter on page 102 appeared on a website which supplies information

to lawyers and their clients.

1 What other sources of information on recent developments in the law are

available to lawyers?

2 How can you keep your knowledge of the law in your jurisdiction up to date?

3 Which of the following sources of information do you consult? Which three

do you think are most useful? Give reasons for your choices.

0 In-house seminars

0 Legal publications (in paper form)

0 Online legal journals

0 Law conferences

0 Internal company memos or reports

0 University courses

0 Colleagues

0 Government websites

0 Law firm websites

0 Other .................

D1-\ Unit 7

To improve your web-based research skills, visitwww.cambridge.orgjeltjlegalenglish.click on

Research Tasks and choose Task 7.

Unit7 Contracts:assignmentandthird-partyrights

E

Vocabulary: distinguishing meaningWhich word in each

out? You may need to consult a dictionary to distinguish

meaning.

1 duty

2 inter

3 compose

4 convince

5 appeal

responsibility obligation

Ie intention intensity

draft write enlist

propose induce persuade

elect select choose

Vocabulary: word choiceThese sentences are from a tenant's Right of

Assignment document. In each case, choose the correct word or phrase to

complete them.

1 Notwithstanding anything to the contrast opposition contained in

the lease, Tenant can / may/ shall have ollowing rights with respect to

assignment, transfer or sub-lease (referred to / in / as hereinafter as a

'Transfer') of the demised premises.

2 Landlord agrees that it will not unreasonably withdraw / rebut /

approval to any Transfer of the demised premises or any part thereof /

thereafter / thereunder, provided such Transfer shall be subject to all of the

terms and circumstances / conditions / inclusions of the lease.

3 Tenant shall waive / have / own the right to perform any of the following

acts without the necessity to request or obtain Landlord's refusal/

withdrawal/approval therefor.

4 Transfer the demised premises or any portion thereof to / from / at any

'affiliate company'. An affiliate company shall mean, for purposes of this

Article 49, any corporation, partnership or other business entirety / entreaty /

entity under common control and ownership with the Tenant, or with the

parent or any subsidiary of the Tenant.

Prepositions with contrCJct1Cc>mpletethephrases below using the correct

preposition in the box. '(ournay need to cOnsl.llta dictionary.

1 the parties a contract

2 pursuant , the contract

3 to have rights and obligations

4: to benefit the contract.

5 to assign rights or delegate duties

6 enforce a contract someone

7 a third-party beneficiary a contract

8 in reliance ,...the contract

a contract

a third party

Prepositions with contract 2 Complete the sentences below correct

preposition

of on to (x5) under (x2)

1 A party the

contract.

3 A third-party

4 The benefit the other

party.

Vocabulary: nouns ending with -or andof nouns following the

pattern of promisor/promisee using these verbs (1-4). noun

pairs their definitions (a-d).

1 franchise

2 lease

3 mortgage

4 transfer

a

c

Date: 2015-12-11; view: 1961