Contract Clause Drafting Flashcards
7 cards from real CBN 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 Clause Drafting flashcards as text
In a software services agreement, which clause type best addresses ownership of custom code developed by the vendor?
Answer: Intellectual property assignment clause
An IP assignment clause explicitly transfers ownership of custom-developed work from the vendor to the client.
Which drafting technique makes a contract clause more likely to be interpreted in the drafter's favor under contra proferentem?
Answer: Stating terms precisely and unambiguously to avoid the rule applying
Contra proferentem resolves ambiguities against the drafter, so precise drafting eliminates the rule's application entirely.
A 'liquidated damages' clause is enforceable when:
Answer: The amount reflects a reasonable pre-estimate of anticipated harm and damages are difficult to prove
Courts uphold liquidated damages clauses when the amount was a genuine pre-estimate of loss, not a penalty.
What does an 'entire agreement' (integration) clause accomplish?
Answer: It prevents parties from introducing prior negotiations or representations to vary written terms
An integration clause establishes the written contract as the complete agreement, barring extrinsic evidence of prior discussions.
Which type of clause in a construction contract protects an owner when a subcontractor files a mechanic's lien?
Answer: Lien waiver clause
A lien waiver clause requires contractors and subcontractors to waive lien rights upon receiving payment, protecting the owner's title.
When negotiating a renewal clause, which structure gives the buyer the most control?
Answer: Buyer's option to renew at pre-agreed terms within a specified notice period
A buyer's renewal option at pre-agreed terms gives the buyer certainty on price and timing without being locked in automatically.
A 'carve-out' in a confidentiality clause typically excludes information that:
Answer: Is independently developed, publicly available, or received from a third party without restriction
Standard NDA carve-outs exclude information already public, independently developed, or lawfully received from third parties.