Law: Evaluating a Contract

Project 3 – Evaluating a Contract The ability to read and understand contracts is fundamental in law and in life. Corporate transactions are bundles of contracts, most civil litigation is based on contract, and we all deal with contracts in our personal lives (whether we are aware of this fact or not). In this project, you will analyze a contract and answer questions about specific provisions of the contract, as well as general questions about the effectiveness of the contract in general. Read the Employee Noncompetition and Nondisclosure Agreement for Boulder Dry contained in this learning module, paying close attention to the explanations that are included along with the contract. Then, answer the following questions: 1. Is there a governing law provision? If so, what state’s laws apply to this contract? In what paragraph is this provision found? (3 points) 2. Can the contract be assigned? In what paragraph is that provision found? (3 points) 3. What is the definition of “proprietary information”? (3 points) 4. If the employee takes a side job, must he or she notify the company? In what paragraph is this provision found? (3 points) 5. Is there a covenant not to compete? If so, how long does it apply? In what paragraph is this provision found? (3 points) 6. Which party seems to have had the stronger bargaining position, and why? (5 points) 7. Which specific provisions favor the employer? Explain. (5 points) 8. Which specific provisions favor the employee? Explain. (5 points) 9. The parties’ main intentions in signing this contract were to protect the firm’s confidential information and to explain how the CFO could use that information. Which provisions are related to those two purposes? (5 points) 10. Which provisions seem entirely unrelated to the main purposes of the contract? Why are these other provisions included in the contract? What do they do for the parties? (5 points) 11. As a potential employee being asked to sign this agreement, what major concerns might you have? (Discuss at least two.) (5 points) 12. Suppose that after one year the employee decides to resign from Boulder Dry. What provisions of this contract should the employee review before resigning—that is, which provisions will likely affect his or her future in this situation? When leaving the company, what actions should the employee take to ensure that he or she is in compliance with all obligations? (5 points)