The following Commercial practice note provides comprehensive and up to date legal information covering:
Where a contract is made by two or more parties it may contain a promise or obligation made by two or more of those parties. Any such promise may be:
joint and several
Whether an undertaking is joint, several, or joint and several in contract is a question of construction and is dependent on the intention of the parties as evidenced in the contract. For example, in Rhinegold Publishing v Apex Business Development, statutory demands were served on Rhinegold Ltd, and a related company, Tannhauser Ltd, in the sums of approximately £22,000 and £31,000 respectively. A settlement agreement was subsequently entered into under which the parties agreed to pay the amounts due, but Tannhauser failed to fully do so. Although the settlement agreement was silent on the question of liability, the High Court held that on a proper construction of the agreement, the parties were jointly and severally liable. Rhinegold was therefore required to pay the outstanding sums owed by Tannhauser.
Joint liability arises where two or more persons jointly promise to do the same thing. For instance where B and C jointly promise to pay £100 to A:
there is only one obligation, namely a single payment of £100
each of B and C is liable for the performance of the whole promise,
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