Archive for the ‘Commercial contracts’ Category
Thursday, April 28th, 2011
Do you need to tell the (potential) buyer about the future threat to the business? If you want to avoid a claim for misrepresentation you do… or risk unlimited liability.
A case on 20th April this year has confirmed the position at English law that silence (when you know an honest statement is no longer true) can amount to fraudulent misrepresentation.
It’s not the first such case to make this point (as anyone who attends our regular in house lawyers forums will be aware) but it does place the bar higher for sellers of businesses, who must balance the threat to the sale against the (very real) threat of a claim, in respect of which they will not be able to limit liability.
Posted by Richard Nicholas, who specialises in commercial, IT and outsourcing agreements, complex projects for private and public sector clients, collaboration, distribution & agency contracts, e-commerce and consumer law.
Richard Nicholas
0121 237 3992
rnicholas@brownejacobson.com
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Tags: fraudulent misrepresentation, misrepresentation claim, richard nicholas, selling a business, unlimited liability
Posted in Commercial contracts, In-house Lawyers, Outsourcing | No Comments »
Thursday, April 28th, 2011
It’s always useful, when advising on issues such as cloud computing, to hear the views of CIOs, so I was delighted to be invited by Post Magazine to be part of a round table discussion on the subject – looking at cloud computing in the insurance sector.
To me, the benefits of cloud computing make a switch nearly inevitable, although there are some significant and justifiable fears about both data security and availability – particularly in the light of recent events, making the choice of a private cloud the more palatable option for critical business functions.
There are practical restraints on use of cloud computing in the insurance sector but the consensus was that these could be overcome. Indeed, several of those present were actively looking at a switch to cloud computing in the near future.
With the right contractual assurances and safeguards in place it seems cloud computing is coming – even to the (traditionally risk-averse) insurance sector.
Posted by Richard Nicholas, who specialises in commercial, IT and outsourcing agreements, complex projects for private and public sector clients, collaboration, distribution & agency contracts, e-commerce and consumer law.
Richard Nicholas
0121 237 3992
rnicholas@brownejacobson.com
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Tags: cloud computing, Data Protection, data security, insurance cio, insurance sector, IT Contracts, post magazine, richard nicholas
Posted in Commercial contracts, Data Protection, In-house Lawyers, Insurance, Insurance - Advisory, IT Contracts, Outsourcing | No Comments »
Tuesday, April 19th, 2011
Whether it’s an angry ex-colleague, ex-employee or ex-director – if your business has valuable confidential information that it needs to protect, these people will inevitably know about it.
When that person leaves – how do you stop them from disclosing information about your product or company to other suppliers?
We looked at practical legal steps (restrictive covenants, contractual provisions) and technical/IT steps that you can use to prevent the loss of IP, data and know-how in a recent workshop and picked up some useful industry perspectives from those who attended.
If all else fails then the court will intervene, occasionally with a fairly stringent perpetual injunction, prohibiting that person from (ever!) disclosing that information, as in a recent case involving a golf trolley device .
To get such a prescriptive remedy however you’ll need to act fast, demonstrate a real threat and that other remedies will not suffice. Getting the right IP and contractual protection in place before you reach a dispute can significantly improve your chances.
Posted by Richard Nicholas, who specialises in commercial, IT and outsourcing agreements, complex projects for private and public sector clients, collaboration, distribution & agency contracts, e-commerce and consumer law.
Richard Nicholas
0121 237 3992
rnicholas@brownejacobson.com
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Rating: 0.0/10 (0 votes cast)
Tags: Commercial contracts, confidential infomation, ip
Posted in Commercial contracts, In-house Lawyers, Intellectual Property, IT Contracts, Outsourcing | No Comments »
Friday, April 15th, 2011
… or at least, they don’t do everything you might want them to.
A recent Court of Appeal decision took a similar line to the first instance ruling in BSkyB v EDS in reaching the conclusion that an entire agreement clause that said that the agreement constituted:
“the entire agreement between the parties” and would “supersede any previous promises, agreements, representations, undertakings or implications” made prior to the contract was not enough to exclude liability for misrepresentations made outside the contract terms, although it will prevent collateral warranties arising.
If you want to exclude liability for misrepresentation (as those who attend our regular in-house lawyers forums will be all too aware) you need to have either an explicit exclusion of liability for misrepresentation or, better still a statement that neither party has relied upon statements not included in the contract.
Suppliers who want to exclude comments made by salespeople in negotiations need to check their contracts. For those seeking to bring a claim for misrepresentation this judgement, like BSkyB v EDS, breaks down an important obstacle to bringing a claim.
Posted by Richard Nicholas, who specialises in commercial, IT and outsourcing agreements, complex projects for private and public sector clients, collaboration, distribution & agency contracts, e-commerce and consumer law.
Richard Nicholas
0121 237 3992
rnicholas@brownejacobson.com
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Rating: 9.5/10 (2 votes cast)
Tags: BSkyB v EDS, Commercial contracts, entire agreement clauses, misrepresentations
Posted in Commercial contracts, In-house Lawyers, IT Contracts, Outsourcing | No Comments »
Wednesday, April 6th, 2011
The UK Government recently released its ICT Strategy following on from manifesto commitments made prior to the election.
It makes for interesting reading. The proposals for the sharing of IT infrastructure is one that struck a particular chord as it’s one that we recently advised on and seems a common sense approach to making ICT more efficient.
Other proposals worth picking up are the preference for open source software where possible, to make greater use of cloud computing, a presumption against large projects and an environment for SMEs in particular to be able to access contracts and to test solutions.
Inevitably, given the scope of the strategy, it is short on detail on any one area. Some areas however (cloud computing, use of open source solutions, use of many providers) will need careful management if government-held data about all of us is not to be kept securely. Data security is likely to be key to ensuring that these proposals turn out as planned.
Posted by Richard Nicholas, who specialises in commercial, IT and outsourcing agreements, complex projects for private and public sector clients, collaboration, distribution & agency contracts, e-commerce and consumer law.
Richard Nicholas
0121 237 3992
rnicholas@brownejacobson.com
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Tags: cloud computing, data, data security, ICT strategy
Posted in Data Protection, IT Contracts, Local Authorities, Outsourcing, Projects & partnerships, Public Sector | 3 Comments »
Thursday, March 31st, 2011
The Court of Appeal has today upheld a High Court decision that clauses inserted into contracts withdrawing rights on insolvency will not be enforceable.
According to the Court of Appeal judgment in Towergate Stafford Knight Company Limited (now Folgate London Market Limited) v Chaucer Insurance Plc any such clause would fall foul of the anti-deprivation principle and is therefore void.
The anti-deprivation principle is a common law rule that prevents parties from depriving their creditors of the benefits of their assets should they become insolvent.
This Judgment demonstrates the ongoing relevance of the anti deprivation principle and the profound effects that this can have on commercial contracts. Further guidance on the principle can be expected to come from the Supreme Court when the Judgment in Belmont is handed down.
Posted by Paul Cox, specialising in: large loss and catastrophic cases including brain and spinal injuries; fatal claims and those involving chronic pain syndrome; regularly asked to advice on policy liability/interpretation
Paul Cox
0121 237 3912
pcox@brownejacobson.com
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Rating: 10.0/10 (1 vote cast)
Tags: Chaucer, Commercial contracts, Court of Appeal, creditors, insolvency, Towergate
Posted in Business recovery, Commercial contracts, Insurance, Outsourcing, Professional Indemnity | No Comments »
Monday, March 28th, 2011
A contract claim where the terms and conditions states “subject to English Law and practice” does not necessarily confer jurisdiction to the English courts.
In Mujur Bakat SDN BHD v Uni Asia General Insurance BHD the Commercial Court was asked to review the situation where proceedings had been issued in the Commercial Court and leave given to serve on the defendants in Malaysia where the companies were based. The claimants were also Malaysian companies but the parties had incorporated the ITC clauses in their contract.
The claim concerned two alleged breaches of warranty and the court needed to consider whether the English courts were the most appropriate forum for trial which meant that the court had to look at matters such as witness availability and where the parties carried on business. Clearly on these factors the natural place for the case to be heard was Malaysia.
Yet another decision demonstrating how important it is to be precise in drafting contractual terms so that they accurately reflect what the parties intended….
Posted by Nichola Evans, who specialises in professional indemnity work , directors and officers, legal expenses insurance, conditional fee agreements and after the event insurance and commercial litigation.
Nichola Evans
0207 337 1019
nevans@brownejacobson.com
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Rating: 9.5/10 (4 votes cast)
Tags: commercial court, ITC clauses, Mujur Bakat SDN BHD v Uni Asia General Insurance BHD
Posted in Commercial contracts, Insurance, Outsourcing | No Comments »
Tuesday, March 1st, 2011
I was always taught, that a company using intellectual property must necessarily either:
A) Own it; B) Be licensing it (from a third party); or C) Be infringing (a third party’s rights)
A case in the Patents County Court last month however has looked at the question – “if you are using copyright material under licence, but fail to pay the ongoing licence fee – are you therefore infringing the owner’s rights?” The answer was no – it is not necessarily an infringement. Even though you are in breach of the licence, so may be in breach of contract, it does not necessarily follow that you are infringing copyright, or that the licensor has a right to terminate the licence.
From a pure contract law perspective, this isn’t that surprising but is a reminder that if you don’t put express wording in a contract, the courts will not imply it for you (so it is worth getting the wording in at the start).
When and how contracts can be terminated for breach is an issue we’ll be covering at the next in house lawyers forums on 16th, 29th and 31st March. Please sign up here if you’d be interested in attending.
Posted by Richard Nicholas, who specialises in commercial, IT and outsourcing agreements, complex projects for private and public sector clients, collaboration, distribution & agency contracts, e-commerce and consumer law.
Richard Nicholas
0121 237 3992
rnicholas@brownejacobson.com
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Rating: 10.0/10 (1 vote cast)
Tags: copyright, Intellectual Property, IT Contracts
Posted in In-house Lawyers, Intellectual Property, IT Contracts | No Comments »
Wednesday, February 23rd, 2011
The rights of an employer to terminate a contract without notice could be key in deciding whether an independent contractor, trading through a limited company, has to comply with tax avoidance measure IR35.
In MBF Design Services Limited v HMRC the tax tribunal decided that the employer’s right to terminate Mr Fitzpatrick’s contract without notice was “characteristic of a contract for services but quite foreign to the world of employment”. Against this background, other terms of the contract which could be seen as confirming his employee status were given less weight.
This will give some comfort to contractors working on large manufacturing, IT or construction projects where contractors are required to use certain systems and procedures alongside employees, but have no true guarantee of work from week to week.
For employers seeking maximum flexibility from their independent contractors it does give an additional argument “after all…”, they can now explain to would-be contractors working for them “this clause helps you retain your independence ….”
Posted by Richard Nicholas, who specialises in commercial, IT and outsourcing agreements, complex projects for private and public sector clients, collaboration, distribution & agency contracts, e-commerce and consumer law.
Richard Nicholas
0121 237 3992
rnicholas@brownejacobson.com
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Rating: 6.0/10 (2 votes cast)
Tags: contracts, employer, employment, hmrc
Posted in Commercial contracts, Employment, In-house Lawyers, Tax | No Comments »
Wednesday, February 16th, 2011
When the parties are confused as to who had the authority to enter into the contract and the method of concluding the same.
Everton FC brought a claim arising out of an alleged contract for the club to appear in a tournament in South Africa. The High Court held that the parties all understood an agreement would only be concluded when a contract signed by the authorised signatories had been exchanged. The club could not rely on email exchanges or a telephone call between the parties as showing that the understanding of how the contract would be concluded had changed. Therefore Everton’s claim was dismissed.
We’re back to the basics of contract formation and making sure that the formalities are complied with. Compare this case with Richard Nicholas’ post and you can see that if the basics are not dealt with properly, then you may find yourself tied to terms you didn’t intend to agree to or in Everton’s case, finding that there is no contract at all.
Posted by Nichola Evans, who specialises in professional indemnity work , directors and officers, legal expenses insurance, conditional fee agreements and after the event insurance and commercial litigation.
Nichola Evans
0207 337 1019
nevans@brownejacobson.com
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Rating: 10.0/10 (3 votes cast)
Tags: Commercial contracts, Everton FC, High Court
Posted in Commercial contracts, Outsourcing, Professional Indemnity | No Comments »
Wednesday, February 9th, 2011
Is a phrase like this sufficient to incorporate your terms and conditions into a contract? Quite possibly – according to the Court of Appeal in Rooney & Anor v CSE Bournemouth Ltd 2010.
The case concerned maintenance being carried out on aircraft owned by the claimants. Before carrying out work the defendants would produce a “Work Order” incorporating the words “terms and conditions available on request” at the bottom of the page and would not start work until these terms had been signed.
It is important to note that this was an appeal where the initial order was for a strike out of the defendant’s action. It does not mean that a court would find similarly in every case where a phrase such as this is used, (you might not want to use it as your only limit on liability for instance) but it suggests that you can’t ignore throw away comments such as this, on the assumption that any terms have not been properly incorporated. It is a reminder (if any were needed) that you don’t have to have read terms and conditions to be bound by them.
Posted by Richard Nicholas, who specialises in commercial, IT and outsourcing agreements, complex projects for private and public sector clients, collaboration, distribution & agency contracts, e-commerce and consumer law.
Richard Nicholas
0121 237 3992
rnicholas@brownejacobson.com
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Rating: 9.0/10 (1 vote cast)
Tags: Commercial contracts, Rooney & Anor v CSE Bournemouth Ltd, terms and conditions
Posted in Commercial contracts, In-house Lawyers | 1 Comment »
Friday, November 5th, 2010
The ‘without prejudice’ rule is commonly used to incentivise parties to reach a speedy settlement out of court without fear of making concessions in their own case should the dispute end up in court. If the settlement agreement is not agreed, the court should not even know that it was made.
However the problem comes though when the offer to settle is accepted, court battle averted, only for the parties to later question what its terms really meant. Should ‘without prejudice’ communications be available to determine what the parties meant when they reached the settlement agreement?
According to the Supreme Court recently they should.
This decision could have the effect of either making parties more wary in their without prejudice negotiations, which would be a shame if it prevented settlement, but it certainly means that settlement agreements, once drafted should be checked carefully against the offers on the table.
Posted by Richard Nicholas, who specialises in commercial, IT and outsourcing agreements, complex projects for private and public sector clients, collaboration, distribution & agency contracts, e-commerce and consumer law.
Richard Nicholas
0121 237 3992
rnicholas@brownejacobson.com
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Rating: 6.3/10 (3 votes cast)
Tags: Commercial contracts, in-house legal, settlemant agreements, without prejudice
Posted in Commercial contracts, In-house Lawyers, Outsourcing | No Comments »
Wednesday, October 20th, 2010
Today’s CSR sets out the Government’s belief that it should not be the default provider of important services, which is indicative of the Government’s decentralisation plans.
The challenge for procuring bodies will be in:
- getting to grips with proposed new models of contracting;
- understanding and implementing effective tariffs;
- navigating the joint commissioning landscape;
- meeting targets for service delivery from various types of organisation;
Whilst all the time remaining compliant with procurement law.
Not all of these challenges are new. However, the wide ranging reforms to Government on the ground will throw the joint commissioning tendering model into the spot light, with emphasis on the legality of and robust arrangements needed to really deliver contracts which harness the Government’s buying power and deliver value for money without damaging service delivery.
Posted by Rachel Williams, who specialises commercial contracts, projects, competition law, procurement and state aid; clients include NHS bodies, local authorities, RDAs and national and international private sector clients.
Rachel Williams
0115 976 6538
rwilliams@brownejacobson.com
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Rating: 8.0/10 (1 vote cast)
Tags: comprehensive spending review, csr, Procurement, spending review
Posted in Commercial contracts, Competition, Comprehensive Spending Review, Public Sector | No Comments »
Friday, October 1st, 2010
A major criticism of PFI contracts is that they are lengthy (typically around 25 years) and inflexible. Against this background, the government recently targeted second tier contracts as ripe for savings and a Treasury source has this week revealed that PFI/PPP contracts are next in line.
Although the capital element of a project is largely set in stone and underpinned by the rights of funders, the service elements of a PFI or PPP should be as amenable to change as any other services contract.
Good contract managers will already have been looking for efficiencies within the terms of existing contracts – cuts or no cuts – but increasing government focus on reducing PFI charges will lead to actual renegotiation. Particularly where the authority feels the contractor is under-delivering or that the project was over-specified at the outset, and the relationship between the parties (good or bad) means that the authority has the appetite to tackle their contractors.
Posted by Craig Elder, who specialises in project finance; Projects; PFI/PPP ; commercial contracts ; waste and defence sectors; long term/complex service arrangements; public sector procurements
Craig Elder
0115 976 6089
celder@brownejacobson.com
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Tags: Commercial contracts, pfi charges, pfi/ppp, projects
Posted in Commercial contracts | No Comments »
Friday, September 24th, 2010
Liquidated damages clauses have traditionally been assessed on the basis of whether the clause in question represents a genuine pre-estimate of the loss suffered as a result of the breach. If not, the clause was held to be a penalty and therefore unenforceable.
In a recent case, the High Court allowed a liquidated damages clause which, although not a genuine pre-estimate of loss, was justified on commercial grounds.
This “commercial justification test” is a flexible and pragmatic approach and few can argue with the court’s willingness to uphold a commercial agreement negotiated between equals. However, some may be surprised to read that the damages in this case (EUR 7.6 million) for late payment amounted to 20% of the total price!
Posted by Ryan Harrison, who specialises in intellectual property agreements and disputes, licensing, commercial contracts, and commercial and intellectual property issues arising from M & As and disposals.
Ryan Harrison
0121 237 3950
rharrison@brownejacobson.com
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Rating: 10.0/10 (1 vote cast)
Tags: Commercial contracts, liquidated damages
Posted in Commercial contracts | No Comments »
Thursday, August 12th, 2010
What does ‘on completion of this agreement’ mean?
That’s the question that the high court had to decide, faced with a broadband business who had erected electronic communications equipment on the rooftops of certain council properties, including the Council’s own City Hall building.
The business was relying on a provision of a binding memorandum of understanding that allowed it access to council rooftops for this purpose for a period of 15 years, such access to be granted…’on completion of this agreement’. Was the licence enforcable?
Not according to Mr Justice Roth in City of Westminster v Urban Wimax who took into account the fact that a pilot scheme was clearly anticipated under the agreement and that the implicit intention was that the licence only be effective if this pilot scheme had proved sucessful. Urban Wimax were seeking to take advantage of the poor drafting of the memorandum of understanding to suggest that the licence took effect from execution of the agreement.
The council were perhaps lucky here not to have been lumbered with a licence that took effect too early and by the common sense approach of the court, but it is a warning where a pilot scheme is planned for a project (which often include the scantest legal wording), to check the wording of any licences granted, so as not to be embarrassed in court.
Posted by Richard Nicholas
0121 237 3992
rnicholas@brownejacobson.com
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Tags: Broadband, Commercial contracts, IT Contracts
Posted in Commercial contracts, IT Contracts | No Comments »
Thursday, June 10th, 2010
The High Court has upheld a decision that consent given under a co-existence agreement to the registration of a trade mark for certain goods was a bar to opposition on relative grounds, citing section 5(5) of the Trade Marks Act.
Omega Engineering argued that Omega SA had no right to oppose its application to register OMEGA in respect of certain goods since it had expressly agreed not to do so under a co-existence agreement between the two parties. Omega SA argued, amongst other things, that the co-existence agreement was irrelevant to an objection made on relative grounds. Mr Justice Arnold disagreed stating that it would be unjust if a party who had consented to the registration of a trade mark could successfully oppose the application to register it.
This has to be the right decision otherwise the usefulness of co-existence agreements would be severely threatened.
Posted by Sara McNeill
0121 237 3930
smcneill@brownejacobson.com
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Tags: Intellectual Property, ip, Trade Mark, trade marks
Posted in Commercial contracts, Commercial Litigation, Intellectual Property | No Comments »
Friday, March 19th, 2010
The campaigning has started by all the major parties, and anything said at this stage before an election is to be taken with a pinch of salt, but there are likely to be a fair few people whose attention might have been caught by the Conservative Technology Manifesto not least, anyone involved in public sector IT projects (as supplier or customer) any vendors of open source software, makers of smart meters and/or with an interest in data protection.
The document is a short one and, as with any pre-election material, has some positive suggestions in generic terms – an end to wasteful IT projects, a “right to data” policy and greater openness in most areas of public sector life, including publishing online all spending over £500 by local governments.
What might surprise some IT companies that contract with the public sector at the moment however, whatever their political persuasion, is the suggestion that contracts with local authorities that exceed certain thresholds (£500 for local authorities, £25,000 for central government and Quangos) will also be published “in full” – including in particular all performance indicators, break clauses and penalty measures. It’s a brave step and one that might highlight contracts that are overly favourable to suppliers and where the public sector is being unfairly penalised.
On the other hand – from the supplier’s perspective this raises issues of its own – “if you (large IT supplier) can provide those services and meet those service levels for that cost for the public sector, then why not for me, your prospective private sector customer?” There is a risk that too much transparency could mean public sector customers no longer get a better deal than the market.
And what about contracts provided by named “Key personnel” – will these individuals earn a celebrity of their own through contracts published online, or will data protection concerns override requirements in future legislation? Certainly the 35,000 most senior civil servants whose salaries are also required to be published online may have something to say if they can be identified from this information.
However this manifesto plays out, if, as currently predicted the conservatives are likely to be the next government, there are likely to be a few lively debates with the Office of the Information Commissioner before this manifesto becomes law.
Posted by Richard Nicholas
0121 237 3992
rnicholas@brownejacobson.com
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Tags: Data Protection, IT, IT Contracts, Public Sector
Posted in Data Protection, IT Contracts, Public Sector | 1 Comment »
Thursday, March 11th, 2010
It’s a query often raised by clients. A recent case has highlighted that it might well be more than previously thought.
Traditionally a party suing for breach of contract can expect to recover losses that result directly from a breach, but not losses that are “indirect” – as these are considered too remote or unforseeable. Typically a supplier will exclude indirect losses and will also exclude losses such as loss of profits, loss of revenue and similar losses. In a recent case however there was an interesting decision as to what a supplier could claim, even where indirect losses and loss of revenue is excluded. This included:
- Increased payments to suppliers, as a result of using the faulty software
- Additional costs of borrowing, made necessary by the increased payments to suppliers;
- The cost of chasing debts that were not due (but which the faulty software suggested were due);
- The cost of ex-gratia payments made to customers to compensate for poor service – (i.e. payments that the customer was not obliged to, but chose to pay to protect its reputation); and
- Even the cost of stationery used to write to its customers to explain the problems caused by the faulty software
None were excluded by the typical “loss of profits” exclusion, nor by excluding indirect losses. For software suppliers it’s a potential wake up call that errors and delays in projects can lead to eye-watering amounts of damages – something that it is worth taking the time to protect against when working through the small print of their agreements.
Posted by Richard Nicholas
0121 237 3992
rnicholas@brownejacobson.com
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Tags: Commercial contracts, IT
Posted in Commercial contracts, IT Contracts | No Comments »
Friday, February 26th, 2010
Here’s an idea for a game: Move a marble-like ball around a computer screen by continually placing train tracks in front of it
Here’s another one: Having developed the above programme, move the rights in it from you to your company and then seek to move it back again using the courts and the law of copyright infringement.
The first idea might seem a decent one. The second idea is a truly terrible and expensive one and one that developers should avoid at all costs as this case shows.
A freelance developer developed his game concept (called either Tracktrix, or later Train Trax) before he joined Circle Studios as a games developer. Without telling others in the company that he had developed this concept himself he passed on this concept and encouraged Circle Studios to exploit it.
Sadly this did not lead to commercial success and Circle Studios went into administration. Afterwards the developer sought to take back the concept and to do this he claimed, amongst other things – copyright infringement, alleging that Circle Studios had copied the game from him as a freelance developer. After all he should know…he (as an employee of Circle) had copied it!
Unsurprisingly perhaps the games developer was unsuccessful. As the developer had not disclosed where the idea came from, there was no reason for the employer to believe that the concept was not created in the course of his employment. Any infringement was caused by the developer. The copyright claim failed, as did a related breach of confidence claim, with the judge lamenting that the action reached the court in the first place.
The lesson – be clear where ideas come from as an employee and if you developed something yourself that you later want to use in your employment, discuss assignment or a licence with your employer. If it’s too late to do this, avoid litigation if you can, as taking that track without advice is likely to mean losing your claim, as well as your marbles.
Posted by Richard Nicholas
0121 237 3992
rnicholas@brownejacobson.com
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Tags: copyright, Intellectual Property, IT
Posted in Intellectual Property, IT Contracts | No Comments »
