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
A 'most favored nation' (MFN) clause in a commercial contract typically means:
Answer: One party is entitled to terms at least as favorable as those given to any third party
An MFN clause ensures one party receives pricing or terms no less favorable than the best terms granted to any other customer or counterparty.
Which of the following best describes a 'covenant not to compete' in an employment contract?
Answer: An employee's agreement to restrict post-employment work in a competing business
A non-compete covenant restricts an employee from working for competitors or starting a competing business for a specified time and geographic area after employment ends.
In drafting a liquidated damages clause, what must be established for it to be enforceable?
Answer: Actual damages must be difficult to calculate and the amount must be a reasonable estimate
Courts enforce liquidated damages clauses when actual damages are uncertain or hard to calculate and the stipulated amount represents a reasonable pre-estimate of likely harm.
What is the purpose of a 'survival clause' in a contract?
Answer: It specifies which provisions remain binding after the contract terminates or expires
A survival clause identifies obligations—such as confidentiality, indemnification, and representations—that continue to bind parties after the contract ends.
When drafting a service agreement, an 'acceptance testing' provision primarily addresses:
Answer: The process for a client to approve delivered services or deliverables before final payment
Acceptance testing provisions set out the criteria and process by which a client reviews and formally approves deliverables before the provider's payment obligation is triggered.
In contract redlining, adding a 'fallaway' or 'sunset' provision means:
Answer: A term or obligation expires or becomes void after a specified date or event
A fallaway or sunset provision causes a specific contractual right or restriction to lapse automatically upon the occurrence of a trigger event or passage of time.
The 'ejusdem generis' canon of construction is relevant in contract drafting because it means:
Answer: General words following specific terms are limited to items of the same kind
Under ejusdem generis, a catchall phrase following a list of specific items is construed to cover only items similar in nature to those specifically listed.