Many business law educators have recognized the importance of teaching students not only the rules of contract law, but the process of implementing these rules in the "real world" of business. This article discusses a contract negotiation exercise that enables students to apply the black letter law of contracts while at the same time honing their negotiation skills and developing an understanding of the legal aspects of human resource management. The implementation of this exercise also enables the instructor to create an active learning environment, which provides opportunities for students with diverse learning styles, particularly those whose strengths are grounded in concrete experience rather than abstract thinking. The exercise can be incorporated not only into business law courses, but into human resource management, employment law, negotiation, and conflict resolution courses as well. (Contains 39 footnotes.)