Choose a Provision For this module's Discussion Board, please read Document 2 - Website Development Agreement (Version 1) (1).docx Download Document 2 - Website Development Agreement (Version 1) (1).docxbeginning on page 513 of the Stark text (2nd ed.). When you have completed your review, please choose a provision of the Agreement to discuss (do NOT choose a definition (Section 1) , "general provision" (Section 13), or the example provision below).

Provision:

4.3.2 Amount to Be Paid. The Client shall pay the Developer for each quarter hour that a Team member works, except if the cap has been reached. In that event, the Client's obligation to pay any amount in excess of the cap is discharged. In determining the amount that the Client is obligated to pay, the Developer shall give the Client a credit equal to the amount of the Down Payment.

Identify and Analyze the Provision You will need to type or copy your chosen provision into your post, then identify which contract concept(s) is being utilized in the provision. When discussing the contract concept and the provision, utilize Appendix 1 - Contract Concepts.docx Download Appendix 1 - Contract Concepts.docxon page 41 and use the provided questions/analysis to frame your discussion.You can also reference Appendix 2: Summary Chart on page 43-44. Also, if applicable, determine what happens--the consequences--under the terms of the Agreement, if a party does not perform under the chosen contract provision.

Appendix 1 - Contract Concepts.docx

Appendix 1: Contract Concepts

Use the following questions as a quick reference to help guide your decision as to which contract concept will memorialize a specific business term properly.

1. Representation and warranty: Has a party said something on which the other party is relying?

1. Covenant: Has a party promised to do something in the future? A covenant creates a duty to perform, also known as an obligation.

1. Discretionary authority: Does a party have a choice or has it been given permission (a kind of choice) to do something?

1. Declaration: Is the business term a definition? Does it establish a policy?

1. To test whether a business term is a declaration, ask whether a party would want a monetary remedy if it were not true.

1. If a party would want a monetary remedy, the business term is not a declaration. It must be either a representation and warranty or a covenant.

1. Conditions: Does the business term require that one thing must happen before another thing happens? Stated differently, must events occur in a chronological sequence?

1. Condition to an obligation (and the obligation): If an event occurs, X has an obligation.

1. Ongoing condition: The condition is not a condition to the performance of a subject matter performance obligation.

1. Walkaway condition: The condition is a condition to the performance of a subject matter performance obligation. If a walkaway condition is not satisfied, the party for whose benefit the condition exists may

1. choose to waive the failure of the condition and perform the subject matter performance obligation;

or

1. choose not to perform the subject matter performance obligation without being in breach and walk away from the contractual relationship.

Although the failure of the condition creates a choice for the party that would have had the obligation, the contract provision to be identified is not discretionary authority. It is the condition to an obligation and the obligation. The choice arises as the common law consequence of the failure to satisfy the condition to the subject matter performance obligation, not because of contractual agreement.

1. Condition to discretionary authority (and the discretionary authority): Must an event occur before a party may exercise discretionary authority?

1. Condition to a declaration (and the declaration): Must an event occur before the policy has substantive consequences?

1. If/then test: When creating an if/then statement, the then clause should state who has the obligation to perform or who has the discretionary authority.

Correct: If X happens, Y is obligated to perform

Wrong (do not use the following formulation): If X does not happen, then Y is not obligated to ... This formulation states the common law consequences of the failure to satisfy a condition, not the condition to an obligation and its obligation.

Example Initial Post Here is an example of an initial post:

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4.3.1Billing Rates. The billing rates for Team members range from $75 to $225 an hour. The Developer may increase these rates only after having given the Client at least 30 days prior notice.

The first sentence of provision 4.3.1 is the contract concept of a Declaration. It is a "true" fact establishing the pay policy for the contract. A party would not want monetary damages related to the policy. Indeed, if the Developer charged more than $225 an hour, the Client simply would not pay the higher rate. The Client would not choose to take the Consultant to court or terminate the agreement.The Client would pay the rate articulated in the declared policy.

The second sentence of the Billing Rates provision is the contract concept ofDiscretionary Authority. Under the provision, the Developermayraise rates for Team members, however, the Developer must give the Client at least 30 days notice before the rates would become effective. The Developer holds the right to choose to take action or not take action. Giving the Developer this discretionary authority would be risky on its own,because the provision read alone suggests that the Developer can raise Team members rates whenever and by any amount as Developer chooses so long as the Client has the proper notice. However, the risk of billing rate increases is mitigated by section 4.1 which articulates a cap for the total contract Services.