Posts Tagged ‘Commercial contracts’
Monday, January 30th, 2012
At the World Economic Forum recently Neelie Kroes announced the setting up of the “Cloud Partnership”.
With it she announced a policy to increase the uptake of cloud computing throughout Europe through the creation of common standards and regulation, together with an initial investment of Euro 10 Million from the European Commission to make it happen.
Personally I’m always a little concerned by announcements to boost the economy through greater regulation. If however the policy results in greater uptake of cloud computing by the public sector (whether through true “public” clouds or through the greater use of “private” clouds), as common standards are agreed and accepted then there is a real chance of (much-needed) cost savings, which must be welcome.
Let’s hope an agreement on standards can be reached more quickly than agreement on the debt crisis, even if it does involve putting up with unnecessary repeated references by politicians to becoming “not just Cloud friendly but Cloud active”.
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
VN:F [1.9.11_1134]
Rating: 0.0/10 (0 votes cast)
Tags: cloud computing, Commercial contracts, European Commission, government bodies, IT Contracts, neelie kroes, outsourcing, Public Sector, world economic forum
Posted in Commercial contracts, Consumer contracts, Government bodies, IT Contracts, Outsourcing, Public Sector | No Comments »
Friday, November 25th, 2011
The Supreme Court has recently commented on how it decides between two reasonable interpretations of a clause (Rainy Sky SA v Kookmin Bank).
The Court confirmed that “if there are two possible constructions, the court is entitled to prefer the construction which is consistent with business common sense and to reject the other”. In keeping with this, the Court found against the party that was unable to advance any commercial reason why its interpretation should be adopted.
The case continues the move by the Supreme Court away from a strict (and some might say, overly literal) approach to the interpretation of contracts to a position where commercial purpose is generally more important than the niceties of language. This is welcome, but does it really amount to much more than the members of the Court confirming that they want to sleep well at night?
Posted by Tim Claremont, who specialises in domestic and international engineering and construction, including contractual and delay claims across all forms of dispute resolution; also contract drafting and negotiation.
Tim Claremont
0115 976 6520
tclaremont@brownejacobson.com
VN:F [1.9.11_1134]
Rating: 7.3/10 (3 votes cast)
Tags: Commercial contracts, dispute resolution, Supreme Court
Posted in Commercial contracts, Commercial dispute resolution | No Comments »
Friday, October 14th, 2011
A proposal for a common sales law across the 27 states of the EU to anyone opting into its terms has just been published. Does this signify a major development for businesses entering contracts throughout the EU?
In the short term, I confess, I doubt it – for one thing there already exists a voluntary piece of sales legislation to which businesses could opt-in if they wanted. I am of course referring to the United Nations Convention on Contracts for the International Sale of Goods (CISG), to which 76 countries have already signed up (with some notable exceptions such as the UK, India and Brazil).
An advantage the new EU instrument could have over the CISG however is a single supreme court (the ECJ) to determine how it should be interpreted. Over the long term we may yet all need to learn how it works alongside national contract law. I’ll certainly be watching to see how it develops.
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
VN:F [1.9.11_1134]
Rating: 0.0/10 (0 votes cast)
Tags: CISG, Commercial contracts, common european sales law, ECJ, united nations convention on contracts
Posted in Commercial contracts, Consumer contracts, In-house Lawyers, Outsourcing | No Comments »
Thursday, October 13th, 2011
Have you entered into an agreement for lease which is conditional upon the landowner/developer satisfying certain conditions, (such as obtaining planning, carrying out works etc), by a specified end date? Did the agreement also allow both parties to terminate if the conditions weren’t satisfied by this end date?
In these challenging times, it’s useful to remember the old adage that a party cannot benefit from its own breach. Recent case law upheld a prospective tenant’s argument that a developer could not terminate the agreement where it was in breach of its own reasonable endeavours obligations, despite this not being expressly set out in the drafting…so check the wording carefully (and of any exclusions) if you find yourselves unhappily on the wrong end of a termination notice. Footnote – we’ll have to see how this decision goes on appeal. We’ll keep you posted!
Posted by Sarah Parkinson, who specialises in property development and retail; heads up commercial property development practice, dealing with complex projects and commercial property transactions, including options and development agreements.
Sarah Parkinson
0115 976 6575
sparkinson@brownejacobson.com
VN:F [1.9.11_1134]
Rating: 6.0/10 (1 vote cast)
Tags: benefit clause, breach of contract, Commercial contracts, conditional clause, contract termination, exclusion clauses, property developers, terminating a contract
Posted in Commercial contracts, Property, Retail | No Comments »
Monday, August 15th, 2011
Imagine buying something big e.g. a ship or production line. The seller wants a payment upfront. You agree in return for a promise from a third party that you’ll be repaid if the seller fails to deliver (an “advanced payment guarantee”). The seller disposes of its business, meaning that the guarantee no longer refers to the right party. Can you still enforce the guarantee?
The Court of Appeal gave a purchaser in this situation greater comfort by treating the advanced payment guarantee as a performance bond (a primary obligation). Interpreted this way, rather than as a guarantee (a secondary obligation), the purchaser can enforce it even where the original contract for sale has been changed – which might otherwise have rendered a guarantee void.
With so much at stake and an “all or nothing” result, there is no substitute for clear drafting to make it clear that rights are intended to survive. A few extra words in the guarantee could have avoided the dispute entirely.
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
VN:F [1.9.11_1134]
Rating: 0.0/10 (0 votes cast)
Tags: advanced payment guarantee, Commercial contracts, Court of Appeal, performance bond
Posted in Commercial contracts, In-house Lawyers | No Comments »
Wednesday, May 11th, 2011
Unlike other jurisdictions, courts in the UK have not normally made a distinction between gross negligence and negligence of any other kind (para 54).
In a recent case however where a set of terms and conditions excluded liability for negligence “other than gross negligence or wilful default”, the court held that a distinction does exist and that an (otherwise negligent) failure to exercise proper skill and care might not amount to gross negligence unless there was also (for example) an “indifference to an obvious risk”.
It’s a distinction that may well be seized upon by those drafting contracts for suppliers – being grossly negligent suggests a greater lack of care than mere negligence, and a greater hurdle to be overcome in the event of a claim. From a customer’s perspective it is a distinction worth looking out for if you want to ensure you have a remedy for mere (trivial) negligence on the part of those providing financial or other services and want to ensure you receive the highest standards of care.
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
VN:F [1.9.11_1134]
Rating: 0.0/10 (0 votes cast)
Tags: Commercial contracts, contracts, gross negligence, negligence
Posted in Commercial contracts, In-house Lawyers, IT Contracts, Outsourcing | 1 Comment »
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
VN:F [1.9.11_1134]
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
VN:F [1.9.11_1134]
Rating: 9.0/10 (1 vote cast)
Tags: BSkyB v EDS, Commercial contracts, entire agreement clauses, misrepresentations
Posted in Commercial contracts, In-house Lawyers, IT Contracts, Outsourcing | No 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
VN:F [1.9.11_1134]
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 »
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
VN:F [1.9.11_1134]
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
VN:F [1.9.11_1134]
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
VN:F [1.9.11_1134]
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 »
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
VN:F [1.9.11_1134]
Rating: 0.0/10 (0 votes cast)
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
VN:F [1.9.11_1134]
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
VN:F [1.9.11_1134]
Rating: 0.0/10 (0 votes cast)
Tags: Broadband, Commercial contracts, IT Contracts
Posted in Commercial contracts, IT Contracts | No Comments »
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
VN:F [1.9.11_1134]
Rating: 0.0/10 (0 votes cast)
Tags: Commercial contracts, IT
Posted in Commercial contracts, IT Contracts | No Comments »
Friday, February 19th, 2010
Of the habits I’ve learned over the years advising on commercial contracts, one of the most irritating is perhaps that I do not now feel prepared to read anything at all (documents, contracts, covering emails) without a pen in my hand ready to underline important bits of it or write next to it. I know that I’m not alone in this.
In the relatively measured world of contract negotiation, where an apparently wildly aggressive spew of words annotating text along the lines of “How much?” “when?” “Why would we agree this?” or simply “No!” – much of which allows me to pick up the phone and have a much more measured conversation with the client & or will lead me to making similar points to the other side as part of a negotiation.
In the context of a dispute however these sorts of annotations could be much more problematic as it is less clear when they will be priviledged (i.e. prevented from being disclosed to the other side or as evidence). A recent case however suggests that these sorts of annotations will not always be privileged, unless they clearly give a clue as to the advice being offered by a lawyer to his/her client. It might well be acceptable therefore for a court to allow a document such as a contract which is partly underlined as evidence in the event of a dispute, even though it might highlight the areas that the other side consider significant and those that it does not.
Comments made by non-lawyers (“Oooops – shouldn’t have done that!” – “we’re stuffed!” etc) are not generally privileged, so can be disclosed and may well be of interest to the other side. The conclusion seems to be obvious – when dealing with a dispute, keep the originals clean, keep the legal advice separate and make sure that this advice remains privileged.
If you must annotate, annotate copies, be aware of the danger you might have to disclose that copy – oh and do leave annotations at work. Newspapers and novels are probably best left unannotated – particularly if they need to go back to the library…
Posted by Richard Nicholas
0121 237 3992
rnicholas@brownejacobson.com
VN:F [1.9.11_1134]
Rating: 0.0/10 (0 votes cast)
Tags: Commercial contracts, contract negotiation
Posted in Commercial contracts | No Comments »
Wednesday, January 27th, 2010
The UK has just this week reportedly emerged from recession but the pain is still being felt by suppliers and customers throughout the UK.
It has been the cause of many breached contracts, failed deliveries and missed payments over the last few months, a fact that’s unlikely to change as a result of the economic growth figures.
But what if you can no longer perform your part of a bargain because the funding you thought you had in place is no longer available? Should you be able to escape your obligations?
What about if you were aware of a clause in your contract allowing you to escape liability for “force majeure events”?
Sadly for the purchaser of an executive jet aircraft whose case was heard this month, such a clause, by itself, may not help.
It seems only right that force majeure should not include economic downturns, particularly where it is possible for the parties to deal with a lack of funding another way – by using a “hardship” clause or to make the deal dependent upon the purchaser first obtaining funding.
For those suppliers facing unwilling purchasers (or would-be purchasers waiting for deliveries) this case is likely to be welcomed. The recession (and its consequences) wasn’t a force majeure event, nor should it be treated as one, but rather a challenge that buyers and sellers must face together on their own terms.
Posted by Richard Nicholas
0121 237 3992
rnicholas@brownejacobson.com
VN:F [1.9.11_1134]
Rating: 0.0/10 (0 votes cast)
Tags: Commercial contracts, contracts, force majeure, recession
Posted in Commercial contracts | No Comments »
