Company charges definition

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Mistake in contract law

Mistake in contract law This Practice Note considers the legal concept of mistake in contract law. It examines common mistake, mutual mistake, unilateral mistake, mistake as to identity and mistake as to the document signed (non est factum). It also considers the impact of each of these types of mistake on the contract and the correction of mistakes by rectification or construction. For guidance on dealing with mistakes in the execution of documents, see Practice Note: Deeds—Failure to comply with formalities and other defects and our Execution collection, in particular, The Basics—Q&As—Mistakes in executing documents. For more guidance where parties choose to correct a mistake by agreeing an amendment to the operative parts of a contract, see Practice Note: Contract variation. What is a mistake? A mistake is an erroneous belief held by one or both parties to a contract at the time of its formation. A mistake may arise as to the: • subject matter or terms of the contract • identity of the other party •...

Distinguishing between lending against the security of receivables and purchasing receivables

Distinguishing between lending against the security of receivables and purchasing receivables This Practice Note gives a brief overview of the key legal issues and discussion points commonly encountered when financial institutions are deciding whether to offer receivables purchase/invoice discounting facilities or to provide a loan secured against the value of receivables. There are a number of reasons why suppliers may prefer to elect to sell receivables (on a no recourse or limited recourse basis) instead of borrowing. These reasons can include: • pricing—if the account debtor is a better credit risk than the supplier, the supplier might receive better pricing terms than if it were to borrow on an unsecured basis • credit lines—receivables purchase transactions may allow a seller to raise funds without using up credit lines with its financiers (though this will vary from financier to financier as different financial institutions have different rules on how they book receivables purchase transactions) • negative covenants—a supplier might be prevented from raising financial indebtedness under its existing facilities...