Deal‐Making 2.0: A New Experiential Simulation in Contract Negotiation and Drafting for Business Students in the Global and Digital Age

• DOI: http://doi.org/10.1111/jlse.12034
• Published date: 01 January 2016
• Date: 01 January 2016
• Author: Bruce W. Klaw

Journal of Legal Studies Education

Volume 33, Issue 1, 37–69, Winter 2016

Deal-Making 2.0: A New Experiential

Simulation in Contract Negotiation

and Drafting for Business Students

in the Global and Digital Age

Bruce W. Klaw∗

I. INTRODUCTION

This article presents a new contract negotiation and drafting exercise de-

signed for undergraduate and graduate business students in a business law or

legal environment of business survey course. Structured as an asset purchase

and sale agreement involving a small business with intangible social media

and intellectual property assets in a cross-border setting, this exercise intro-

duces business students to the fundamentals of real-world deal-making in the

digital and global age through an intensive experiential role-play exercise. It

provides students with an opportunity to enhance negotiation and conflict

resolution skills, gain transactional competence and comfort with essential as-

pects of contract law, hone problem-solving and writing skills, and develop the

ability to recognize and mitigate legal issues in international business. The re-

sults of data gathered from current students through anonymous surveys and

unsolicited feedback from recent alumni following implementation of this ex-

ercise indicate that it has been both well received and educationally effective.

II. THE NEED FOR,AND BENEFITS OF,ACTIVE

PROBLEM-BASED LEARNING SIMULATIONS

As it stands, many legal studies professors in business schools teach contracts

as part of a module in a larger survey course in business law or the legal

∗Assistant Professor, University of Denver.

C2016 The Author

Journal of Legal Studies Education C2016 Academy of Legal Studies in Business

37

38 Vol. 33 / The Jour nal of Legal Studies Education

environment of business. Given the numerous other important legal topics

that should be covered in the course of an academic semester or quarter,

many professors in that predicament may have only two weeks, at most, to

ensure that society’s future business leaders have transactional competence.

And based upon how we were taught in law school, many such modules prob-

ably approach contracts in the law school way, focusing on appellate cases

that illustrate the key elements of a contract: offer, acceptance, consideration,

legality, and capacity. If we have time, and have not yet lost the attention of

the class through a discussion of reported case exemplars, we may move on to

other black-letter rules concerning contract performance, contract termina-

tion, anticipatory repudiation, breach, third-party beneficiaries, assignments,

delegations, and remedies.

As Professor Lampe has aptly explained, however, “business school legal

faculty are not teaching future lawyers” and “[t]o best serve student needs,

the introductory course in law should offer a managerial approach that is real-

istic and practical for future business practitioners.”1Indeed, “the long-term

goal of business law study is to develop students who are efficient and effec-

tive managers of the legal issues affecting business.”2Yet, some professors

probably do not feel they have the time to even touch on essential consider-

ations like how to actually negotiate an agreement, how to use contracts to

allocate and insulate against business risk, how to ensure a contract is written

clearly enough to prevent foreseeable disputes, and how to ensure a contract

is enforceable in a convenient location in the event of a dispute.

One problem with the black-letter approach, according to Professors

DiMatteo and Anenson, is that it “gives the student a false impression of the

certainty of such a rule-based system” while, in reality, contract law is much

more vague and fact dependent.3Likewise, Professors Nation and Melone

have noted that “[k]nowing the ‘rules’ or ‘black letter law’ of various business

law topics is necessary and important but not sufficient to effectively manage

issues in a business environment.”4

1Marc Lampe, A New Paradigm for the Teaching of Business Law and Legal Environment Classes,23

J. LEGAL STUD.EDUC. 1, 1, 4-5 (2006).

2George A. Nation III & Matthew Melone, For the Introductory Business Law Course Consider an

In-Depth Study of Contract Law in an Integrated Business Context,17J.L

EGAL.STUD.EDUC. 283, 285

(1999).

3Larry DiMatteo & T. Leigh Anenson, Teaching Law and Theory Through Context: Contract Clauses

in Legal Studies Education,24J.L

EGAL STUD.EDUC. 19, 26 (2007).

4Nation & Melone, supra note 2, at 287.

2016 / Deal-Making 2.0 39

The literature is now replete with discussions on the merits of using

experiential learning exercises as a supplement to traditional teaching meth-

ods.5Professor Katz has explained that active learning exercises provide “a

far richer, integrated experience of the legal environment than the abstract,

linear and discrete presentation of specific course segments such as jurisdic-

tion, procedure [and] ADR [alternative dispute resolution][.]”6Professor

Bird has noted that “experiential and other creative learning methods en-

hance student learning.”7When properly constructed, such exercises “can

increase student understanding of business law and the pressures and deci-

sions faced by modern managers.”8They can “provoke students into thinking

creatively about problems,” “promote the generation of new ideas and in-

sights,” and “require students to operate under conditions of uncertainty.”9

Moreover, the pressure of decisions prompted by simulation exercises “may

compel participants to use available sources of knowledge more aggressively,

integrate that knowledge more broadly, and organize the knowledge gained

more coherently to support their conclusions.”10

Simulation exercises can also “increase the level of student par-

ticipation,” particularly if they are “sufficiently intense and realistic that

participants take their role in the simulation very seriously.”11 They “promote

positive student feeling about the classroom experience and may give con-

fidence to students who struggle in the classroom.”12 They also encourage

“cooperation among student teams, particularly where the success of the

individual depends upon the success of the entire team.”13

5It is important to recognize that active learning exercises should supplement, rather than

entirely replace, traditional teaching methods. See LeVon E. Wilson & Stephanie R. Sipe,

A Comparison of Active Learning and Traditional Pedagogical Styles in a Business Law Classroom,31

J. LEGAL.STUD.EDUC. 89, 102 (2014) (finding after empirical study that traditional learning

methods often led to similar levels of performance on exams depending upon the type of

questions posed).

6Lucy V. Katz, The Case of the Alarming Enchilada: A Dispute Resolution Exercise for A Legal Environ-

ment of Business Course,18J.L

EGAL.STUD.EDUC. 144, 145 (2000).

7Robert C. Bird, Integrating Simulation Games into Business Law Teaching,19J.LEGAL STUD.EDUC.

203, 204-05 (2001).

8Id. at 205 (examining benefits of simulation exercises).

9Id. at 213.

10Id. at 214.

11Id. at 213.

12Id. at 214.

13Id.