Charles M. Fox > Quotes

“Never follow "including" or "including without limitation" with something that is not covered by the provision.”
― Charles M. Fox, Working with Contracts: What Law School Doesn't Teach You

“a lawyer is required to opine that the execution, delivery and performance by his client of a contract does not violate, conflict with or result in a breach of one or more other contracts (a "no-conflict opinion").”
― Charles M. Fox, Working with Contracts: What Law School Doesn't Teach You

“Monthly statements are only required for the first two months in any quarter, and quarterly statements are only required for the first three quarters of a fiscal year. This is intended to avoid duplicative reporting,”
― Charles M. Fox, Working with Contracts: What Law School Doesn't Teach You

“The first representation is a statement as to a fact. The second representation is a statement about the representing party’s awareness of a fact.”
― Charles M. Fox, Working with Contracts: What Law School Doesn't Teach You

“In contract drafting, plagiarism is a virtue.”
― Charles M. Fox, Working With Contracts: What Law School Doesn't Teach You, 2nd Edition (PLI's Corporate and Securities Law Library) 2nd Edition

“A standstill (also called a forbearance) is a waiver of a party’s rights to take remedial action in respect of another party’s breach, instead of a waiver of the breach itself.”
― Charles M. Fox, Working with Contracts: What Law School Doesn't Teach You

“EBITDA is an acronym for "earnings before interest, taxes, depreciation and amortization." It is computed by taking a company’s net income for a particular period and adding back the amount of interest expense, tax expense, depreciation and amortization for such period, all of which, under GAAP, have been deducted in arriving at the net income figure. Financial analysts consider EBITDA to be one of the most important measures of a company’s operating financial performance.”
― Charles M. Fox, Working with Contracts: What Law School Doesn't Teach You

“There are two basic types of covenant exceptions: carveouts and baskets.”
― Charles M. Fox, Working with Contracts: What Law School Doesn't Teach You

“There is another important advantage to resolving issues in advance as a part of the contract formation process. It is a time when both parties want a deal and therefore are more likely to reach a compromise.”
― Charles M. Fox, Working With Contracts: What Law School Doesn't Teach You, 2nd Edition (PLI's Corporate and Securities Law Library) 2nd Edition

“The documentation of a business deal is where the worlds of business and law most clearly intersect. The”
― Charles M. Fox, Working with Contracts: What Law School Doesn't Teach You

“most practitioners take the view that an obligation to use best efforts includes the obligation to make every possible effort, and to use all possible financial resources, to achieve the desired goal.”
― Charles M. Fox, Working with Contracts: What Law School Doesn't Teach You

“[F] Officer’s Certificate The seller will usually be required to deliver a certificate signed by one of its officers stating that (i) its representations in the acquisition agreement are true and correct at closing, and (ii) it has performed all of its covenants in the acquisition agreement.”
― Charles M. Fox, Working with Contracts: What Law School Doesn't Teach You

“The notion that commercial contracts should be written in plain English so as to be understood by people who would never be expected to read them is an unreasonable extension of the plain English movement, which is aimed at helping consumers and other unsophisticated parties.”
― Charles M. Fox, Working with Contracts: What Law School Doesn't Teach You

“Material adverse effect" is a standard that is often employed in the softening of contract provisions. It is often used in more than one provision in a contract, and as a result may be separately defined: "Material adverse effect" means any material adverse effect on the Borrower’s business, assets, liabilities, prospects or condition (financial or otherwise). In order to fall within the ambit of this definition, the matter in question must be both material and adverse to the party. Materiality is a subjective concept; a change that would be reasonably likely to affect the other party’s evaluation of the transaction will generally be viewed as material. The change must also be adverse. Obviously, if it’s a change for the better, it isn’t covered. The definition refers to the areas where the material adverse effect has occurred: the party’s business, assets, liabilities, financial condition and prospects. Let’s look at examples of each of these. The loss of a customer that represented 40% of the borrower’s earnings would have a material adverse effect on its business. An uninsured casualty loss in respect of the borrower’s primary manufacturing plant would have a material adverse effect on its assets. The entering of a judgment against the borrower for damages in an amount equal to its total annual sales would have a material adverse effect on its liabilities. A loss of sales resulting in a diminution in cash flow that impairs the borrower’s ability to pay its operating expenses would have a material adverse effect on its financial condition. Lastly, the development of proprietary technology by a competitor that allows it to produce goods at a more favorable price may have a material adverse effect on the borrower’s prospects, because it may be forced to reduce its profit margins. Inclusion of the word "prospects" as a component of the definition of material adverse effect is almost always a point of contention. The party to whom the material adverse effect standard is applicable will argue that the use of prospects gives the other party too much room to speculate about the future impact of an event. The other party will argue that its counterparty’s future condition and performance is important to it, and the party should not be required to wait until a reasonably foreseeable bad result has occurred before having any remedies. Closely related to material adverse effect is material adverse change, referred to colloquially as "MAC.”
― Charles M. Fox, Working with Contracts: What Law School Doesn't Teach You

“This is an extremely important representation: the financial statements of the target are probably the single most crucial document to a buyer in making its investment decision.”
― Charles M. Fox, Working with Contracts: What Law School Doesn't Teach You

“An agreement of any significant length should first be divided into large sections, the equivalent of chapters in a book. These are often referred to as "Articles" but can also be called "Sections." The provisions of an agreement should be divided into articles based on the purpose they serve.”
― Charles M. Fox, Working with Contracts: What Law School Doesn't Teach You

“expository writing, the goal of which is to persuade or provide information to the reader. A”
― Charles M. Fox, Working with Contracts: What Law School Doesn't Teach You

“The representation written in this fashion identifies individual events, not overall changes from one point in time to another.”
― Charles M. Fox, Working with Contracts: What Law School Doesn't Teach You

“the fewer discussions among the lawyers on this particular topic a client hears, the better. Notwithstanding the important substantive result that is at stake, the typical client, perhaps not understanding the issue, may view it as a ridiculous (and costly) legal cul-de-sac.)”
― Charles M. Fox, Working With Contracts: What Law School Doesn't Teach You, 2nd Edition (PLI's Corporate and Securities Law Library) 2nd Edition

“ratably”
― Charles M. Fox, Working with Contracts: What Law School Doesn't Teach You

“for example, guarantees, promissory notes and security agreements.”
― Charles M. Fox, Working With Contracts: What Law School Doesn't Teach You, 2nd Edition (PLI's Corporate and Securities Law Library) 2nd Edition

“On an Arm’s-length Basis This phrase is used to describe a transaction with terms that are equivalent to fully negotiated market terms. It is usually used in the context of transactions that might not be fully and fairly negotiated.”
― Charles M. Fox, Working with Contracts: What Law School Doesn't Teach You

“It is true that too much legal writing is obfuscatory, wordy, dense and stilted. Many lawyers seem to believe that sounding like a lawyer is as important as the subject matter being communicated. A frequent result is that the effectiveness of the communication suffers.”
― Charles M. Fox, Working with Contracts: What Law School Doesn't Teach You

“Why include conditions precedent at all if there is going to be a simultaneous closing? It is not a necessity, but it does serve two useful functions: while the agreement is being negotiated, it creates a roadmap as to what the parties expect at the closing, and it creates a permanent record of what occurred at the closing.”
― Charles M. Fox, Working with Contracts: What Law School Doesn't Teach You

“Learning is an accretive process: the more one knows, the easier it is to learn, because there are reference points that new information can "stick" to.”
― Charles M. Fox, Working With Contracts: What Law School Doesn't Teach You, 2nd Edition (PLI's Corporate and Securities Law Library) 2nd Edition

“Provisions that set forth what the contract is about, referred to herein as the "operative provisions." For example, the operative provisions of a contract to sell the assets of a business would include a description of the assets, the calculation and method of payment of the purchase price, and the mechanics of transferring the assets. An asset sale contract containing only these operative provisions would be a very short document, legally enforceable, but not addressing many of the other important issues that buyers and sellers care about. What”
― Charles M. Fox, Working with Contracts: What Law School Doesn't Teach You

“There are different sources of uncertainty. Some are a result of contract terms that are inherently subjective. Terms such as "reasonable," "material" and "could reasonably be expected to" are always going to be subject to differing interpretations at the margins.”
― Charles M. Fox, Working with Contracts: What Law School Doesn't Teach You

“No one would ever suggest that a report whose audience consists of medical doctors should avoid medical terminology that could not be understood by the layperson. By the same token, a contract that embodies a complex commercial transaction will contain specialized diction and vocabulary familiar to its audience. Any”
― Charles M. Fox, Working with Contracts: What Law School Doesn't Teach You

“If the amendment extends the date for this performance to June 30, 2001, but the amendment itself is dated January 7, 2001, there would be a question as to whether the breach existed during the period from the date performance was required through the date of the amendment. One way to address this issue is to have the amendment explicitly provide for a waiver of this breach. On the other hand, neither party may want to acknowledge that a breach existed. An alternative approach is to date the amendment "as of December 31, 2000" so that the effect of the extension will be retroactive.”
― Charles M. Fox, Working with Contracts: What Law School Doesn't Teach You

“party being asked to make a representation will want to make complete disclosure in order to avoid liability. The”
― Charles M. Fox, Working with Contracts: What Law School Doesn't Teach You