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Q&As
To establish that express terms and conditions have been incorporated into a contract, the party seeking to rely on them must show that it has done what is reasonably sufficient to give the other party notice of them: Thornton v Shoe Lane Parking Ltd and Parker v South Eastern Ry. This will be a question of fact in each case. The more onerous or unusual the terms, the more that needs to be done to bring them to the notice of the other party: Interfoto Picture Library v Stiletto Visual Programmes. A summary of this rule and related issues can be found in the following Practice Notes: • Contract interpretation—express terms in contracts, and • Contract interpretation—terms implied
Q&As
Privity of contract 'Privity of contract' is a common law doctrine, which provides that you cannot either enforce the benefit of, or be liable for any obligation under a contract to which you are not a party. Therefore, if your client is not a party to a contract (ie they are a third party) then they cannot sue or be sued under that contract. For further information, see Practice Note: Third party rights—the common law doctrine of privity of contract. Options to recover money as a creditor The fact that a company is insolvent and so unable to pay its debts as and when they fall due as defined by section 123 of the Insolvency Act 1986 means that there is usually only a limited pot of money available for all creditors, and unsecured creditors may inevitably end up with little or no return. For more
PRECEDENTS
[Insert in para 6.1 of response form ET3:] Status of claimant 1 It is denied that the Claimant worked for the Respondent as an employee under a contract of employment. The Claimant was at all material times a [self-employed [independent contractor OR non-executive director] of the Respondent] [insert details]. Contract void for illegality 2 The contract entered into between the Claimant and [insert name of company], which owned the undertaking which then transferred to the Respondent, provided that [insert details of illegality, eg 50% of the Claimant’s salary should be paid to the Claimant’s wife. No services were provided by the Claimant’s wife to [insert name of company] and this arrangement was an attempt to defraud HM Revenue & Customs of income tax and National Insurance contributions].
Q&As
This Q&A assumes that the document requiring interpretation is a simple contract to which the normal rules of contract construction and interpretation apply, and is not a document used in legal proceedings or other proceedings to which specific rules of interpretation might apply. The usual rules of contract interpretation will be considered by the courts when considering the definition of an 'agreement'. Whether a term needs to be implied depends on the wording of the particular contract and the surrounding circumstances. The rules of contract interpretation The courts will apply an objective test based on what a reasonable person, having all the background knowledge which would reasonably have been available to the parties in the situation they were in at the time of contracting, would have understood the contract to mean. The
Q&As
A contract for the hire of a venue is a contract for the supply of services. When considering the supply of services by a business, drafters should first consider whether the customer is a business or a consumer (business to business (B2B) or business to consumer (B2C)). For information on B2B contracts for the supply of services, see: Supply of services—overview and Practice Note: Contracts for the supply of services—business to business, and for information on B2C contracts for
PRACTICE NOTES
Section 49 of the Law of Property Act 1925 This Practice Note considers the procedure under section 49(1) of the Law of Property Act 1925 (LPA 1925), by which a buyer or seller of any interest in land (or their representatives) may, between exchange and completion, make a summary application to court in respect of: • any requisitions or objections • any claim for compensation, or • any other question arising out of or connected with the contract (other than a question affecting the existence or validity of the contract) The section applies to a contract for the sale or exchange of any interest in land. The court may make such order as appears just, including an order as to the costs of and incidental to the application. The court cannot award damages. For guidance on the court’s power to order return of a deposit under LPA 1925, s 49(2), see Practice Note: Return or forfeiture of a deposit. When is it appropriate to
Q&As
In answering this question, we have assumed that you are referring to a services agreement between two businesses in an unregulated supply sector. The ability to recover sums under a commercial contract will depend on the terms of the contract relating to calculation of payments, invoicing and dispute resolution. For general information, see Practice Note: Price, payment terms and interest. If the contract introduces a process for agreeing invoices for services and agreeing these invoices as ‘final’ for parts of the work there is likely to be no right to go back to recover errors, regardless of the error. The nature of the error—whether this is a price calculation error, a miscalculation of usage or
Q&As
The Commercial Agents (Council Directive) Regulations 1993 (the Commercial Agents Regulations), SI 1993/3053 do not contain a specific provision regulating assignment by the principal. Consider the provisions of the agreement and whether there is a prohibition on assignment. This could be an actual term in the written contract or implied because of the nature of the relationship between the parties and how the agency is/has been conducted. See Practice Note: Contract interpretation—terms implied by fact. Is the contract capable of assignment? An assignment is ‘an immediate transfer of an existing proprietary right, vested or contingent from one party to another’. Assignments can be effected either: • by consent—either by way of gift or for consideration, or • by operation of law—when they can occur during life or on death An assignment by operation
NEWS
MLex: Irish telecom operator Eircom’s damages lawsuit against BT Group over a public-sector contract must be carefully managed to trial, a UK judge told the parties today. Eircom’s claim, filed at the High Court, followed a decision by sector regulator Ofcom in 2020 to fine BT for its conduct over a tender process.
PRECEDENTS
1 The Architect/Contract Administrator may deliver to the Contractor as an instruction a schedule of any incomplete items of work and defects outstanding at
Q&As
An indemnity is an agreement by one party to bear the cost of certain losses or liabilities incurred by or claims brought against another party in specified circumstances. Indemnities are used in a contract together with warranties and exclusion and limitation of liability clauses to apportion commercial risk. The impact of an indemnity provision will depend upon its express terms. Practice Note: Contract interpretation—the guiding principles provides a useful starting point for interpretation, as it sets out the five principles of interpretation used by the courts, as formulated by Lord Hoffmann in the leading case of Investors Compensation Scheme v West Bromwich Building Society (ICS). In particular, it provides that the meaning which a document (or any other utterance) would convey to a reasonable man is not the
PRACTICE NOTES
This Practice Note summarises what the Information Release Schedule (IRS) is, its role in the JCT contracts and some practical points to consider when using the IRS and incorporating it into a JCT contract. Information Release Schedule The JCT definition of the IRS (as defined, for example, in the fifth recital in the JCT Standard Building Contract Without Quantities) is the schedule of information that the Architect or Contract Administrator will release, and the time of that release. It is therefore essentially a timetable for the flow of design information. An IRS is necessary on a project where the full set of design information is not available at tender documentation stage, or will not be available by contract execution. This is particularly the case for fast-track projects, where the completion date is fixed by external criteria usually defined by the business case for the project (such as a harvest in relation to a manufacturing project) and the design has to be completed alongside early construction works in order to achieve