The mortgage deed may contain express provisions varying or extending the mortgagee's general right to reimbursement from the security of costs properly incurred1. There may, for example, be agreement that the mortgagor is personally liable for payment of costs2; or that costs should be payable on the indemnity basis3; or that the mortgagee is entitled to the costs of proceedings where a third party impugns the title to the mortgage, or the enforcement or exercise of some right or power accruing to the mortgagee
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This Practice Note explains certain common financial covenants used in commercial finance transactions including:•minimum net worth test•gearing ratio•leverage ratio (or debt to equity ratio)•current ratio (or acid test ratio)•cashflow ratio•interest cover ratio, and•loan to value ratioIt explains:
There are two kinds of burden:•the legal burden, and•the evidential burdenThe legal burdenA party has the legal (sometimes called ‘the persuasive’) burden where the onus is on that party to prove a fact or issue in a case to the required standard of proof.The legal burden is generally on the
Fraud by false representationFraud by false representation applies to a broader range of conduct than the offences under the preceding legislation (the Theft Act 1968 (TA 1968)). No gain or loss need actually be made, and no deception need operate on the mind of the deceived for the Fraud Act 2006
This Practice Note examines:•why negative pledge clauses are used in commercial transactions •the consequences of breaching negative pledge provisions•how negative pledges are viewed in the context of security and quasi-security, and•key considerations when drafting a negative pledge clauseWhere
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