Strategic Contract & Business Lawyering

Professor Larry A. DiMatteo

Monday: 8/9 (3:00-4:50)
Office Location: Room 355D
Phone: 392-0323
Email: larry.dimatteo@cba.ufl.edu
Office Hours: TBD

Required and recommended textbooks and other course materials

No Textbook. Course materials will include law review articles available online and class
handouts. Nothing to buy! The instructor reserves the right to change the reading assignments and
to provide supplemental readings in class.

Course Objectives

Most of the American literature on the strategic use of the law is found in the management
literature, namely, in organizational behavior and human resource management scholarship.
However, the lawyer needs to be educated in business as well in order to recognize business
opportunities that the law can advance. This course focuses on the importance of exploring how
clients and lawyers can work together to use contracts proactively and develop a skill set that best
allows lawyers to serve the strategic needs of business. Put simply, contracts can be used to create
competitive advantages and create value for clients.

In today’s competitive legal services environment, a lawyer needs to continue to prove his or
her’s worth. The skill set that relates to strategic contracting is an avenue to better serve clients
and to prove the worth of legal services. This need to use strategic contracting and business
lawyering to ensure performance is important in an interconnected, global economy. The
contractual relations to be examined include joint ventures, alliances, contracting for innovation,
contracts between competitors, licensing, and network contracting. The course grade will be
based on a research paper of 20-25 pages in length on a topic agreed to by the instructor and
student. Students will also be asked to do a short presentation of an assigned reading.

Research Paper (75%): Students will be asked to write a 20 to 25-page research paper on a topic
to be mutually agreed to by the student and instructor. The paper is due in class on April 200h.
Each student must submit a well thought out 2-page outline of proposed paper on or before
March 9th. The quality of the outline will be taken into account in the final grade assessment.
Students are encouraged to discuss or e-mail (larry.dimatteo@cba.ufl.edu) possible topic before
writing the required outline.

Classroom Participation (25%): Students are expected to read the assignments prior to class
and participate in discussions of the given topic. In addition, students will also be asked to
“present” one of the assigned readings to the class. Students will also be required to make a short
presentation to the class summarizing their research papers.
Class attendance policy

Classroom attendance is required. More than two absences will impact a student’s participation
score. In very special situations, a student may petition instructor for an additional absence.

Statement related to accommodations for students with disabilities

Students requesting classroom accommodation must first register with the Office of Disability
Resources. The UF Office of Disability Resources will provide documentation to the student who
must then provide this documentation to the Law School Office of Student Affairs when
requesting accommodation.

Information on UF Law Grading Policies

Grade Points Grade Point Grade Point

A 4.0 C+ 2.33 D- 0.67

A- 3.67 C 2.00 E 0.0

B+ 3.33 C- 1.67

B 3.00 D+ 1.33

B- 2.67 D 1.00

The law school grading policy is available at: http://www.law.ufl.edu/student-affairs/current-

students/academic-policies#9.

Student Course Evaluations

Students can provide feedback on the quality of instruction in this course by completing online
evaluations at https://evaluations.ufl.edu. Evaluations are typically open during the last two or
three weeks of the semester, but students will receive notice of the specific times when they are
open. Summary results of these assessments are available to students at
https://evaluations.ufl.edu/results.

A Note on the Instructor

Dr. DiMatteo is the Huber Hurst Professor of Contract Law at the Warrington College of
Business and Affiliate Professor at the Levin College of Law. He is a graduate of the Cornell and
Harvard Law Schools, and received a Ph.D. in Business and Commercial Law from Monash
University (Australia). Professor DiMatteo is the author of four-dozen law review articles and ten
books mostly in the area of contract law and theory. His recent books include: Comparative
Contract Law (Oxford University Press 2015); Treatise on International Sales Law: Contracts,

2
Principles and Practice (Hart Publishing/C.H. Beck Publishing 2015); International Sales Law: A
Global Challenge (Cambridge University Press 2014); International Contracting: Law &
Practice (Wolters-Kluwer 3rd ed. 2013); Commercial Contract Law: Transatlantic Perspectives
(Cambridge University Press 2013). Professor DiMatteo won a SEC Faculty Excellence Award in
2013; UF Teacher-Scholar of the Year Award in 2012; and was Graduate Teacher of the Year at
Warrington College of Business in 2010 & 2013.

Weekly Course Schedule of Topics and Assignments (Subject to Change)

Note: (1) Each student will be asked to lead a discussion on one of the law
review articles in the assigned readings. (2) For some the articles, students will
only be required to read excerpts (reading the entire article would be optional).
The specific pagination will be provided on the first day of class.

January 5: Introduction: The Transactional Lawyer

Lecture: Lawyer as Zealot versus Transactional Lawyering

January 12: Business-Law Interface: Introduction to Business Lawyering

C. Bagley, What’s Law Got to Do with It: Integrating Law & Strategy, 47 AM. BUS. L.J. 587 (2010)

January 19: Martin Luther King Day (class cancelled)

January 26: Preventive versus Proactive Law

R. Bird, Pathways of Legal Strategy, 14 STAN. J.L. BUS. & FIN. 1 (2008)

C. Bagley, Winning Legally: The Value of Legal Astuteness, 33 ACAD. MGMT. REV. 378 (2008)

February 9: Successful Negotiations and Issues of Pre-Contractual Liability

E.A. Farnsworth, Precontractual Liability and Preliminary Obligations: Fair Dealing and Failed
Negotiations, 87 COLUMBIA L. REV. 217 (1987).

February 16: Law as a Source of Competitive Advantage & Value Creation

R. Gilson, Value Creation by Business Lawyers: Legal Skills and Asset Pricing, 94 YALE L.J.
239 (1984).

February 23: Law as a Source of Competitive Advantage & Value Creation

G. Siedel & H. Haapio, Using Proactive Law for Competitive Advantage, 47 AM. BUS. L.J. 64 (2010)

March 2: Spring Break (class cancelled)

3
March 9: Relational Contracting

Lecture: Relational Contract Theory

I. Macneil, Contracts: Adjustment of Long-Term Economic Relations under Classical,

Neoclassical, and Relational Contract Law,” 72 NORTHWESTERN U. L. REV. 854 (1978)

Divisible Contracts and Interdependent Contracts

Excerpts from Cases: Combined Energies v. CCI, Inc. 514 F. 3d 168 (1st Cir. 2008);
Guar. Sec. Co. v. Equitable Trust Co., 110 A. 860, 861 (Md. 1920); Final Analysis
Commc’n Servs. v. Gen. Dynamics Corp., 253 F. Appx. 307, 312 (4th Cir. 2007);
(Rothman v. Silver, 226 A.2d 308, 310 (Md. 1967) (

Optional: S. Narasimhan, Relationship or Boundary? Handling Successive Contracts, 77

CAL. L. REV. 1077 (1989) (arguing that classical contract law does not provide adequate
protection against opportunistic behavior in ‘‘successive-contract relationships’’).

March 16: Strategic Contracting

L. DiMatteo, Strategic Contracting: Contract Law as a Source of Competitive Advantage, 47 AM.

BUS. L. J. 727 (2010).

Optional: Commodification and Protecting New Types of Products: K. Osenga,

Information May Want To Be Free, but Information Products Do Not: Protecting and
Facilitating Transactions in Information Products, 30 CARDOZO L. REV. 2099 (2009)

March 23: Contract Design

M. Jennejohn, Collaboration, Innovation, and Contract Design, 14 STAN. J.L. BUS. & FIN. 83
(2008)

Optional: P. Alces, Unintelligent Design in Contract, 2008 U. ILL. L. REV. 505

March 30: Contracting for Innovation

R. Gilson et al., Contracting for Innovation: Vertical Disintegration & Interfirm Collaboration,
109 COLUM. L. REV. 431 (2009)

April 6: Joint Ventures and Global Alliances

R. Sampson, The Role of Lawyers in Strategic Alliances, 53 CASE W. RES. L. REV. 909 (2003)

S. Salbu & R. Brahm, Strategic Considerations in Designing Joint Venture Contracts, 1992
COLUM. BUS. L. REV. 253.

Optional: G. Hadfield, Problematic Relations: Franchising and the Law of Incomplete

Contracts, 42 STAN. L. REV. 927 (1990)

4
 Optional: R. Gulati & H. Singh, The Architecture of Cooperation: Managing
Coordination Costs and Appropriation Concerns in Strategic Alliances, 43 ADMIN. SCI. Q.
781 (1998) (providing a review of the alliance literature)

April 13 & 20: Student Presentations

Possible Research Topics

Managing Negotiations and Precontractual Liability

Transactional Lawyers Role & Skill-Sets
International Transactional Lawyering
Governance Structures in Contracts (Contract as Organization)
Strategic Joint Venture Agreement
Contracts between Competitors
Franchise Agreements: Ensuring Success of Franchisee
Contract Design: Hard Rules versus Open Terms
Using Law to Create Competitive Advantages
Strategic Use of Patent Pools
Regulatory Compliance: Is there Room for Strategic or ‘Creative Compliance?
Lawyers and Business Knowledge
Managers and Legal Astuteness
Business-Legal Strategy in Marketing (Branding)
Integrating Law and Business Strategy
Relational Contract Theory in Practice
Role of Inside (House) Counsel
Proactive Law Movement
Limited Liability Companies: Abuse of Strategic Advantages?
Law Firms of the Future

Interesting Case on Drafting Errors

In 2002, Rogers Cable Communications Inc. (Rogers) entered into a Support Structure
Agreement (SSA) with Aliant Telecom Inc. (Aliant), in which Aliant gave Rogers access
to and use of certain telephone poles at a fixed rate. In order to raise its rates in 2005,
Aliant gave Rogers one year ’s notice to terminate the contract. Rogers objected, stating
that the contract had a minimum duration of five years. In addition, Aliant increased the

5
annual rate of $9.60 per pole to $28.05 per pole.60 The misunderstanding revolved around
a single clause in the SSA:

8.1 This agreement shall be effective from the date it is made and shall continue in force
for a period of five (5) years from the date it is made, and thereafter for successive five (5)
year terms, unless and until terminated by one year prior notice in writing by either party.

As regards the initial term of the agreement, Rogers thought that it had a five-year deal.
Aliant was of the view that even within this initial term, the SSA could be terminated at
any time with one year’s notice. The meaning of the above duration and termination
provision was reduced to the role of the last comma. In 2006, the Canadian authority
CRTC (Canadian Radio-Television and Telecommunications Commission), which wrote
the model SSA that the clause was taken from, sided with Aliant: “Based on the rules of
punctuation,” it stated, “the plain and ordinary meaning of section 8.1 of the SSA allows
for the termination of the SSA at any time, without cause, upon one year’s written notice.”

However, there was a difference between the French and English language versions of
section 8.1. Rogers submitted that the French version of section 8.1 provided clear
evidence that the parties intended to restrict termination without cause to the end of the
term. In response to Rogers’ appeal, the CRTC reviewed the French-language version of
the model SSA. In 2007, the CRTC sided with Rogers and held that the contract ran for a
five-year initial term and could not be terminated unilaterally before the expiration of the
first term.

One would think that the duration of a contract would be of such strategic and operational
importance that the parties and their lawyers would have made sure that what the parties
intended would have been clearly stated in the contract.