68.3 Drafting points—charges

BOILERPLATE AND COMMERCIAL CLAUSES vol 4(3)

BOILERPLATE AND COMMERCIAL CLAUSES vol 4(3) | Commentary

BOILERPLATE AND COMMERCIAL CLAUSES vol 4(3) | Commentary

The main purposes of prohibiting charges over payments or assets are likely to be:

(a)
to ensure that the assets needed for the operation of the contract remain available for the contract, and
(b)
to prevent a situation arising where a third party, eg a bank, acquires an interest in the contract (eg a right to receive payments) which might interfere with the smooth running of the contract or which the other (non-charging) party would find undesirable for some other reason.

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