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PRACTICE NOTES
This Practice Note looks at the SBCC (Scottish Building Contract Committee) standard forms of contract and the key differences between them and the JCT contracts. The approach of the Scottish Building Contract Committee (SBCC) in its standard form contracts is to create as much uniformity across the UK as possible, adopting the JCT forms wherever practicable. However, it remains the case that because of the different legal system north of the border, there are certain key differences in approach. The SBCC standard forms have made the changes required to the JCT forms to bring them in line with Scots law and terminology but they do not change the risk profile or, generally speaking, make other substantive amendments. They follow the JCT colour coding, section headings and clause numbering and, as far as possible, follow the JCT names and dates. The SBCC forms are now published in one amalgamated document so that it is no longer necessary (as was the case with the old JCT 80 and 98 forms) to read a separate
FLOWCHARTS
This flowchart sets out the process for defects under the JCT Standard Building Contract and Design and
PRACTICE NOTES
For guidance on contract law generally, see Practice Note: Ireland—Contract law essentials. This Practice Note is primarily focused on terminating business-to-business commercial contracts. Focus on identifying the termination rights available under the contract and what rights, if any, there may be to terminate the contract at common law. If considering termination, thoroughly review the whole of the contract, ensuring the final signed version, with any amendments and any contractual notices is checked. Engage with the relevant stakeholders (for example, the contract manager or business owner) to understand the status of the relationship with the other party and any recent communications. Note: a breach of contract may (but will not always) result in the agreement being brought to an end. However, there are many more ways that a contract can be terminated other than by breach and there are other instances where a contract may be treated as void or rescinded. What is a breach of contract? A breach of contract may occur in circumstances where a party fails to perform
CHECKLISTS
This Checklist outlines considerations when drafting or reviewing a commercial contract. It addresses preliminary issues prior to drafting or reviewing the contract, key commercial issues and clauses, methods of risk management, common boilerplate provisions, execution and contract management. For more information on commercial contract drafting and review, see Practice Notes: Structure and form of commercial contracts and Key terms and conditions in commercial contracts. This is a high-level Checklist suitable for use when drafting and reviewing a broad range of commercial, business-to-business contracts. It may be suitable for junior lawyers and those working in-house and assumes some familiarity with the concepts referred to. It touches only lightly on pro-party drafting and negotiating positions and links out to more specific guidance. This Checklist does not consider issues around data protection, data security or industry specific issues. For more information on negotiating commercial agreements where data protection is a concern, see: Data protection essentials—overview. For Checklists aimed at more specific categories of contracts, see: • Drafting terms for the sale of goods—business to business—checklist • Reviewing terms for the
PRACTICE NOTES
This Practice Note sets out a brief overview of contract law in Ireland. It discusses the general principles and key Irish cases in the areas of contract formation and interpretation, exclusion and limitation of liability, defences to breach of contract, breach and remedies. For guidance on starting a claim for breach of contract, see Practice Note: Ireland—Starting a breach of contract claim. Formation and interpretation A valid and enforceable contract comprises four essential components: • offer • acceptance • consideration • intention to create legal relations In addition to these four elements, a court will have regard to the ‘overall context’ when deciding whether a document reflects ‘the complete agreement between the parties’ or whether it is a partial or incomplete agreement. In determining whether there is a valid contract between the parties, the court will ‘assess the objective meaning of the relevant words or conduct against the backdrop of the commercial or practical context in which the agreement was intended to operate’ (Biomass Heating Solutions Ltd v Geurts International
PRACTICE NOTES
Overview of the NEC Professional Service Short Contract The NEC Professional Service/Services Short Contract, or PSSC, is part of the NEC3 and NEC4 suites of contracts (see Practice Note: NEC contracts—introduction). In the NEC3 suite of contracts, it was known as the Professional Services Short Contract. It has been rebranded as the Professional Service Short Contract in the NEC4 suite. It is an alternative within the NEC3/NEC4 suites to the longer form NEC3 Professional Services Contract/NEC4 Professional Service Contract (PSC), used for appointing consultants which is discussed in Practice Note: NEC Professional Service Contract. Until the introduction of the Professional Services Short Contract in the April 2013 edition of the NEC3 suite, the PSC was the only contract in the NEC3 suite which did not have an alternative ‘short’ form to use on simple projects. The NEC4 suite has retained the Professional Services Short Contract subject to some changes which are highlighted in this Practice Note, as well as some reordering of clauses and minor amendments to the drafting similar to those made in the other NEC4 contracts.
Q&As
This Q&A refers to a contract between two companies contracting for business purposes. The date on which an agreement is intended to take effect can be different to the date on which it is signed. Unless otherwise provided, an agreement takes effect once signed by all parties. If the effective date is not the date on which the document is signed by all the parties this should be made clear in the agreement itself in a separate commencement clause. See the Drafting Notes to Precedent: Commencement and term clause and Practice Note: Executing documents—deeds and simple contracts and Q&A: If a contract’s actual date and effective date are different, is the effective date enforceable?
Q&As
We have assumed that this Q&A is referring to a business-to-business contract, which is not subject to specific sector or industry regulation. Requirement for consent of some or all parties A contract variation is a subsequent change to an original contract. The parties to the original contract may agree the change at the time of the variation, or a future variation could have been provided for by the parties at the time of the original contract through the identification of trigger points or processes resulting in change. An existing contract may be varied in writing provided that the usual rules for the creation of a binding agreement are
PRACTICE NOTES
Before you can start taking steps to take control of the contract management process in the legal department, you have to understand what the current commercial and legal processes involve. You should conduct a contract management audit that includes all the stakeholders, resources, and processes across your organisation (including the legal department) that impact how your organisation’s contracts are handled, from negotiation and creation to execution and management. This Practice Note provides suggestions as to how to conduct an audit of contract management processes together with an indication of the topics you should investigate during your audit. Conducting the audit There are several ways you could conduct an audit of contract management processes in your organisation: Method Advantages Disadvantages Impromptu hallway or office conversations. Ad hoc meetings may give you the required information if your organisation is small. —You need to steer the conversation with targeted questions. See Precedent: Ireland—Impromptu contract audit meeting questions for some sample questions.—Risk of gaining an incomplete picture. Conduct a workshop that includes a representative
PRACTICE NOTES
Scope of Practice Note This Practice Note on breach of contract considers what may amount to a breach of contract, how the courts approach such assessment with reference to contractual interpretation of the parties’ obligations (and including the ‘principle of futility’ and the ‘prevention principle’), the remedies for breach, ie an express contractual right to terminate for breach or termination under the common law doctrine of repudiatory breach, and the availability of damages for contractual breach. Note: a breach of contract may (but will not always) result in the agreement being brought to an end. However, there are many more ways that a contract can be terminated other than by breach and there are other instances where a contract may be treated as void or rescinded. For guidance on these issues, see Practice Notes: • Termination and expiry of contracts • Terminating commercial contracts • Contract termination—checklist and more generally: Terminating contracts—how and when a contract ends—overview. For the purposes of this Practice Note, we use the terms: • defaulting party—for the party (alleged to
Q&As
Contracts can be varied in a number of ways: • in writing • orally • by conduct • unilaterally (if permitted under the contract) • by waiver, or • by sustained minor breach An existing contract may be varied in writing, provided that the usual rules for the creation of a binding agreement are followed,
PRACTICE NOTES
This Practice Note on interpreting contracts considers when evidence of pre-contractual negotiations and statements can be adduced as an aid to construing the contract. When advising on contractual construction you should consider: • the guiding principles used by the court when interpreting the meaning of contracts, including the requirement to have regard to the background matrix of fact (also known as the factual matrix) and the commercial context in which agreements were reached—see Practice Note: Contract interpretation—the guiding principles • the rules (or 'canons') of construction used to assist in ascertaining the meaning of a written contract—see Practice Note: Rules of contract interpretation • other aids to contract interpretation such as the parol evidence rule—see Practice Note: The parol evidence rule in interpreting contracts, and • the admissibility of surrounding documents as an aid to interpreting contracts—see Practice Note: Contract interpretation—admissibility of surrounding documents For practical guidance as to the approach when faced with a dispute over a contract’s meaning, see Practice Note: How to approach a contractual interpretation dispute—a practical guide. Relationship