Rely on the most comprehensive, up-to-date legal content designed and curated by lawyers for lawyers
Work faster and smarter to improve your drafting productivity without increasing risk
Accelerate the creation and use of high quality and trusted legal documents and forms
Streamline how you manage your legal business with proven tools and processes
Manage risk and compliance in your organisation to reduce your risk profile
Stay up to date and informed with insights from our trusted experts, news and information sources
Access the best content in the industry, effortlessly — confident that your news is trustworthy and up to date.
With over 30 practice areas, we have all bases covered. Find out how we can help
Our trusted tax intelligence solutions, highly-regarded exam training and education materials help guide and tutor Tax professionals
Regulatory, business information and analytics solutions that help professionals make better decisions
A leading provider of software platforms for professional services firms
In-depth analysis, commentary and practical information to help you protect your business
LexisNexis Blogs shed light on topics affecting the legal profession and the issues you're facing
Legal professionals trust us to help navigate change. Find out how we help ensure they exceed expectations
Lex Chat is a LexisNexis current affairs podcast sharing insights on topics for the legal profession
Discuss the latest legal developments, ask questions, and share best practice with other LexisPSL subscribers
Contracts bind people and companies to perform reciprocal actions, and invoke the force of law if they are formulated correctly. Some contracts are carried out immediately, like sales of goods, but the full power of the contract in society is seen in those which are carried out slowly over many years. These include the mortgages contracts which enable us to buy houses, the derivatives and options which mellow our economy, and the shipping orders which ensure our supermarkets are always stocked.
Lawyers are enlisted to draft and negotiate these contracts in part to ensure that the terms agreed are sufficiently foresighted and flexible to respond to the vagaries of life. Unfortunately, the pace of recent political and economic change has undermined some long-term contracts in such fundamental ways that lawyers, industry groups and regulators are struggling to provide solutions. The question arises: can contracts as we know them support the dynamic requirements of modern life?
Following the last financial crisis, the UK government decided that major UK banks should be split into two separate legal entities: the 'retail' bank and the 'risky' bank. The question of which contracts were 'risky' was often fraught. A 'grey zone' of contracts emerged (such as loans to universities and housing associations) which bore some but not all of the features of risky investment contracts. In order to squeeze them into the protected retail bank, many thousands of borrowers had to be contacted individually, informed of the changes to the legal landscape and asked to novate contracts they had agreed years previously to a new lender.
The LIBOR-rigging scandal has produced a similarly vexing and expensive situation. LIBOR was used for decades as a floating interest rate for mortgage repayments, but the rate will no longer be used after 2021. Mortgage contracts have long included clauses acco
Access this article and thousands of others like it free by subscribing to our blog.
Read full article
Already a subscriber? Login
Rory is a solicitor in the Financial Regulation team at Pinsent Masons LLP, with personal academic interests in private, public and international law approaches to emerging financial technologies.
0330 161 1234