The following Commercial Q&A provides comprehensive and up to date legal information covering:
Firstly, see Practice Note: Managing a trading relationship with a business in financial difficulty. This outlines that general trade creditors are usually the last to know if a company is struggling as it not always easy to evaluate whether the finance director's assurance that 'the cheque is in the post' is in fact a true statement, or is masking a much bigger problem. For more information, see Checklist: Contract risk management clauses—checklist.
Should you wish to proceed with agreeing to set-off, see the Lexis®PSL Construction clause bank: Set-off clause which may be helpful.
There are a number of various rights of set-off that currently exist under English law, often with no need for a contractual set-off clause:
legal set-off allows a court to give a judgment for the balance due between two parties for reciprocal claims which are unconnected to and independent of each other. Legal set-off can only apply where both of the claims are
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Breach of statutory dutyThis Practice Note considers claims for damages for breach of statutory duty. For guidance on claims for damages for a negligent breach of duty of care outside a statutory duty, see Practice Notes:•Negligence—when does a duty of care arise?•Negligence—when is the duty of care
Common financial covenantsThis 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
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Sentencing fraud offences committed by individualsThe Sentencing Council (SC) has produced sentencing guidelines for fraud offences under the Fraud Act 2006 (fraud by false representation, fraud by failing to disclose information and fraud by abuse of position), false accounting under section 17 of
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