Contracts Law Assignment

I don’t understand this Business Law question and need help to study.

Managing Contract Risk with an Integrations Clause

You are a senior executive of Castleworth Energy Development, LLC (CED LLC). Its primary asset is a biowaste energy plant that has achieved an output rating of 20,252,134,000 kWhs.

CED LLC has provided full access to the plant to engineers for global energy operator Duke Power Corp. (DPC) as part of a four-month due diligence period. You are negotiating an asset purchase agreement to allow DPC to purchase the power plant.

You work with your legal counsel to manage the transaction and report to the Managing Member of CED LLC, Cael Castleworth. Mr. Castleworth may have mentioned the long-term prospects of the plant and its output to the CEO of DPC in the early negotiations of the transactions to justify the purchase price. DPC provided a draft asset purchase agreement that

  • proposed that CED LLC provide an express representation and warranty that the plant will meet a minimum 20,200,000,000 kWhs output standard for a period of seven years, and
  • did not include an integration clause.

You negotiated successfully to remove the proposed representation and warranty of any minimum kWhs output standard. You noted the extensive due diligence period and noted that plant performance will depend on operational decisions such as fuel quality that can vary and that will be out of CED LLC’s control. You privately doubt that the DPC operational team will have the skill to operate above 18,000,000,000 kWhs, but you wish them well.

The only remaining issue to finalize the asset purchase agreement is whether to insist on including an integration clause.

Requirements

Write a short memo (200–300 words) to Mr. Castleworth with your analysis of the importance of including an integration clause (sometimes called an “Entire Agreement” clause) in the asset purchase agreement. Do the following in the memo:

  1. Explain the benefit of including an integration clause to CED LLC.
  2. Provide an example of integration clause language that you recommend.
  3. Identify risks that may be mitigated or eliminated by including this clause.
 
"Looking for a Similar Assignment? Order now and Get 10% Discount! Use Code "Newclient"

If this is not the paper you were searching for, you can order your 100% plagiarism free, professional written paper now!

Order Now Just Browsing

All of our assignments are originally produced, unique, and free of plagiarism.

Free Revisions Plagiarism Free 24x7 Support
Posted in Uncategorized