Oferta y Demanda

The factual background is essential in any drafting task. For example, it is difficult, if not impossible, to draft a will without details of the testator ’s assets or her family friends and relations.

Sometimes, the client may be reluctant to disclose some or all of

the details needed to carry out a drafting task, especially if they are personal details, and may need to be persuaded that it is in his interests to do so. Such details will be important in tax planning considerations, in advising on whether the dispositions requested have any disadvantages and in pointing out matters which the client may have overlooked. Similarly, it would be difficult to draw up a contract of service without knowing whether it was intended for a clerical grade employee or a director. In each case, different considerations will need to be raised to ensure that the contract is suitable for its purpose and, in the latter, it may be necessary to include provisions which would be wholly inappropriate in the former.

The factual background will also be important to gain an understanding of the circumstances in which the document being drafted is intended to operate. In addition, it may sometimes be necessary to refer in the document, either directly or indirectly, to important facts. One way to obtain the facts necessary to consider the transaction and to do the drafting is by using a factual checklist.

This might take the form of a questionnaire which is sent to the client to complete. For example, a client who instructs his lawyer in relation to his purchase of a suburban house may be sent a questionnaire requesting details of:

1 whether the purchaser is buying as a sole or joint owner;

2 any sale to which the purchase is linked;

3 any mortgage which has or will be sought;

4 whether the vendor’s sale is linked to any purchase by him;

5 whether vacant possession is being given of the whole property;

6 whether there is a garage at the property;

7 whether the driveway is exclusive to the house or is shared;

8 whether any outbuildings are included in the sale;

9 fixtures and fittings included in the sale;

10 the names of all persons who will occupy the property with the purchaser;

11 confirmation that the purchaser is not bankrupt and that no such proceedings are pending against him.

A more detailed factual checklist for drawing up a partnership agreement, depending on the size and nature of the partnership, might include the following:

General matters:

1 the name of the partnership;

2 the names, ages and addresses of all partners;

3 the nature of the business of the partnership;

4 details of business premises and place or places of business of the partnership;

5 the date on which the partnership is to commence.

Finance:

1 the manner in which partners are to provide capital for the business;

2 whether the partnership accounts are to include capital accounts and, if so, whether these will carry interest;

3 whether there will be any restrictions on withdrawal of capital;

4 details of ownership of goodwill;

5 details of any reserve funds required, for example, to provide capital for a sinking fund for a lease;

6 whether any partner is to make a loan to the firm.

Profits and losses:

1 the proportions in which profits and losses will be shared;

2 whether any partners will receive a salary out of profits before they are shared;

3 entitlement of future partners joining and on partners leaving the firm;

4 provisions on partners retaining outside receipts from, for example, directorships or consultancies;

5 the arrangements for drawings;

6 perquisites to be provided to partners, such as cars or accommodation.

Accounts:

1 the annual accounting date;

2 name of the partnership accountants;

3 how work in progress will be dealt with in the accounts;

4 details of partnership banking accounts;

5 details of insurance needed by the partnership business;

6 VAT arrangements.

Admission and retirement of partners:

1 arrangements for admission of new partners;

2 provisions for expulsion of partners;

3 provisions for retirement of partners;

4 the arrangements for dealing with the share of an outgoing partner;

5 whether incoming and outgoing partners are required to sign an election that the partnership is to be assessed on a continuing basis for tax purposes.

Rights and duties of partners:

1 whether there will be salaried partners;

2 whether retired partners can continue as consultants;

3 whether the partnership will provide medical, sickness and death in service insurance;

4 holiday entitlement of partners;

5 whether partners can take sabbatical leave;

6 provisions as to illness and incapacity of partners and maternity/paternity leave entitlements;

7 restrictions on outside appointments of partners;

8 duties of confidentiality to be imposed on partners;

9 restrictive covenants to apply on partners leaving the firm;

10 residential qualifications to be imposed on partners;

11 whether an arbitration clause should be included.

Management:

1 frequency of partners’ meetings;

2 conduct of partners’ meetings;

3 appointment and functions of senior partner;

4 appointment and responsibilities of managing or executive partner;

5 delegation of powers of appointing and dismissing staff.

Dissolution:

1 the provisions, if any, for partners to dissolve the partnership by notice;

2 provisions for dissolution of partnership on death, retirement or bankruptcy of a partner;

3 the arrangements for winding up the partnership affairs on a dissolution.