This practice note examines ways of drafting a joint venture agreement to avoid the joint venture being considered to be a partnership. In order to avoid the inference of a partnership, a joint venture agreement should be drafted so it emphasises the continuing separation and independence of the participants' businesses (best guaranteed by each maintaining separate operational control), and the separate accrual and taxation of their profits. Separate and independent businesses The joint venture agreement should be drafted to ensure there is: • no merger • no joint legal or beneficial ownership of any assets used in the joint venture • no joint carrying on of the joint venture business or businesses The best way to ensure there is no suggestion of the participants jointly carrying on a joint venture business is for their agreement to reinforce that each participant is separately controlling the operations of its own business. In a typical contractual joint venture, each participant is obliged to provide its own contribution to the venture and has complete autonomy within its own sphere of

A personal right to treat land in a particular way.

Dispute Resolution analysis: Damages in contract are intended to place the claimant in the same position as they would have been in if the contract had been performed. But how does the court differentiate between the ‘imaginary world’ in which ‘the contract is performed’ and the events which in fact took place? In this judgment, the court considered the scope of the appropriate counterfactual. The court held that contractual damages are not intended to put the claimant in the position they would have been in but for the breach of contract. Rather, they operate as a substitute for performance. The relevant counterfactual did not, in this case, reflect the likelihood that but for the breach, the level of trading under the contract would have been reduced. No discount on damages was therefore applied. Written by Harriet Campbell, professional support lawyer at Stephenson Harwood LLP.

This Practice Note examines the right to notice of an employee or employer under the contract of employment, ie the notice that must be given by an employer or employee to terminate the employment contract, whether oral or written, the effect of statutory notice provisions in determining the minimum notice period, when the notice period starts to run, issues relating to permanent health insurance (PHI), withdrawing notice of termination, longer notice being given by the employee and dismissing lawfully without notice. In terms of contract law, employers are free to give notice of dismissal at any time, unless they have expressly or impliedly agreed not to in the contract. There is no breach of contract as long as they allow the employee to work out their notice or (if this is provided for in the contract) pay the employee in lieu of notice. However, an employee whose contractual rights have not been breached may also have statutory rights. For example, a dismissal may not be in breach of contract but it may still be: • in breach of statutory

An Offer structured as a contractual proposal made by the Offeror to the shareholders of the Offeree to acquire their shares in return for consideration paid by the offeror (which may be cash, shares, loan notes or other consideration).

A contractual option to take a lease for a further term is a ‘call’ option. It confers a unilateral right on the tenant to call for a renewal lease. There is no obligation on the tenant to exercise this right, but if the tenant does so the landlord must then perform its part of the bargain. The right to call for a renewal lease is often subject to conditions precedent (such as the tenant having paid all rents and complied with the other tenant covenants in the lease) – for further discussion see Conditions precedent below. A call option is a contract for the sale of an interest in land within Law of Property (Miscellaneous Provisions) Act 1989, s 2(1). The option must: • be in writing • contain or incorporate all of the terms expressly agreed between the parties, and • be signed by or on behalf of each party When the tenant exercises the option by giving notice to the landlord, that is simply a unilateral mechanism to trigger the obligation

Competing security interests arise when more than one creditor has taken security over the same asset or group of assets. Determining the order of priority between those security interests decides the order in which each of the secured creditors can claim on the secured property in an enforcement or insolvency scenario. Where the proceeds of enforcement of the security are not sufficient to pay all of the competing secured creditors in full, questions about priority are particularly critical because one or more of them may not recover all of the amounts they are owed if the company cannot pay from other assets. In such cases, being a higher-ranking creditor clearly has significant advantages. Priority between security interests is determined by the priority rules under general law. These can, however, be varied by the parties entering into a contractual priority arrangement under a deed of priority or an intercreditor deed. What are the advantages of entering into a contractual priority arrangement? Varying priority between security interests In the absence of contractual agreement to

Construction analysis: The Privy Council upheld the Court of Appeal’s finding that the subcontractor was entitled to a contractual quantum meruit under a FIDIC-based contract for varied piling works. Although the subcontractor had pleaded quantum meruit based on unjust enrichment, the Board of the Privy Council held it would be ‘mere formalism’ to deny recovery where the contractor accepted a contract existed and the FIDIC terms (clause 12.3) provided for reasonable payment for varied works. Claims for standby augering, piling and static testing were considered contractual, while manufacturing standby and storage claims fell outside the contract and failed, as enrichment could not be proven. NH’s procedural objections as to notice under FIDIC clause 20.1 were rejected given both parties’ conduct. The decision confirms that where a contract governs the relationship between the parties, quantum meruit arises within it, not through restitution, and that courts will prioritise substance and fairness over technical pleading errors.

What is meant by a contractual recognition of bail-in clause? The concept of a ‘contractual recognition of bail-in clause’ came about as a result of provisions in the Bank Resolution and Recovery Directive (EU Directive 2014/59/EU) (the BRRD), which was part of the EU’s response to the financial crisis. Practice Note: EU Bank Recovery and Resolution Directive (EU BRRD)—essentials provides detailed information on the BRRD. Note that the BRRD has been incorporated into the EEA Agreement, meaning it applies to all EEA countries, not just EU member states. One aim of the BRRD, is to ensure that if an institution becomes insolvent, the creditors and shareholders should bear the losses, as opposed to the taxpayers. To help achieve this, Article 43 of the BRRD, allows an EEA regulator to write-down and/or convert into equity a failing EEA institution's liabilities (known as the bail-in tool). However, one potential obstacle to the effectiveness of this provision, is that the write-down or conversion may not be recognised under the law of non-EEA jurisdiction. In

This Practice Note considers when an employee may be entitled to a redundancy payment under a contractual redundancy scheme (enhanced or occupational redundancy scheme or redundancy policy) and the interaction with the statutory redundancy scheme. It outlines the enhancements that are typically offered by employers. It also considers potential issues such as whether an employer can defeat entitlement under an enhanced redundancy scheme by giving notice to employees for another, non-redundancy reason. Remedies, age discrimination and taxation issues are also examined. Under the Employment Rights Act 1996 (ERA 1996), an employee who is dismissed by reason of redundancy after two or more years’ continuous employment will be entitled to a statutory redundancy payment, based on their age, length of service and average weekly pay, subject to a cap. For further information, see Practice Note: Entitlement to statutory redundancy payment. However, it is relatively common for employers, particularly larger employers and those that are unionised, to pay redundancy payments to redundant employees in excess of the statutory redundancy payment. These are often known as enhanced redundancy payments. Whether

Dispute Resolution analysis: The Court of Appeal addressed in this case the interesting question of when it might be possible to exclude the right of a disclosed principal from enforcing and/or relying on the terms of a contract which does not expressly exclude such a principal from its remedies. The court considered the rare circumstances in which that might be a possibility, noting that they are rare indeed, as there is a strong presumption against finding that a disclosed but unnamed principal has given up their contractual remedies. Written by Adam Heppinstall, barrister, Henderson Chambers.

A set-off is the right of one party, Party A, who is owed money by another party, Party B, to ensure payment by setting off the amount owed to Party A through a reduction of Party A’s liability to Party B under a separate dealing. Thus, where a creditor and a debtor have had mutual dealings, the creditor is entitled to set-off against the debt which they are owed any sum which they owe to the debtor. See Practice Note: What is set-off and when is it available? Contractual set-off is one of the five main types of set-off described in Practice Note: Types of set-off. Contractual set-off arises where a right of set-off has been created by an express contractual agreement. It is used when contracting parties want to extend or limit set-off rights which are available under general law (although it cannot be used to alter the scope or operation of insolvency set-off which applies mandatorily regardless of any contractual agreement between the parties—see Practice Note: Types of set-off—Insolvency set-off). This Practice Note examines: