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Q&As
Every employee is entitled to a minimum period of notice of dismissal from his employer if, but only if, it is necessary to give notice in order lawfully to terminate the contract. The contract of employment may be terminated in a variety of ways at common law, including: • by expiry of a fixed or limited term (the contract will terminate automatically when the agreed date of expiry arrives) • by notice (the length of notice required depends upon what was agreed expressly or impliedly) For statutory unfair dismissal purposes, ‘dismissal’ includes: • expiry of a fixed or limited term contract, unless the term is
CHECKLISTS
The Contract Data contained within the NEC Engineering and Construction Contract (ECC) sets out the project specific details for the particular works to be carried out. It is very important that this part of the contract is fully completed and that the details are correct to avoid ambiguity and/or disputes. This Checklist provides practical guidance as to how to complete the details including links to relevant Practice Notes and other content which provide detailed information on the areas covered. It looks at the NEC4 edition of the ECC, although much of the Checklist also applies to the Contract Data in the NEC3 version of the ECC. It is aimed at those who are relatively new to dealing with NEC contracts. An employer will often arrange for the architect or another consultant to complete the project specific information within the contract and will then ask its lawyer to check the contract before the parties execute it. Alternatively, a lawyer may be asked to fill in all of the details but they will need input from the client/its
CHECKLISTS
Once the procurement route and form of building contract has been selected (see Practice Note: Choosing the right procurement method—construction projects) the employer should consider the following matters and incorporate the appropriate drafting in the building contract particulars and schedule of amendments. This Checklist assumes that the parties are using a standard form of building contract, such as a JCT form, and that the employer is proposing the first draft including the completed contract particulars and a schedule of amendments, which amends the standard terms. This list is not exhaustive, however, and there may be other project specific matters/risks that need to be taken into account: Contractual matters • Carry out due diligence on the contractor The employer needs to carry out due diligence on the contractor at the outset to determine whether its financial position is acceptable. Confirm the contractor’s company number and name at Companies House. • Obtain consultants’ details Confirm the full details of the consultants engaged by the employer; some of these will need to be included in the particulars at the start of the
Q&As
The answer to this Q&A will entirely depend on the contractual terms of the secondment and of the original employment. For example, Precedent: Secondment agreement (employer-host-employee) envisages a situation where: • the original employment contract continues in force during the currency of the secondment (see clause 1.2) except insofar as the terms of the secondment agreement are inconsistent with the terms of that employment contract • the secondment agreement will terminate (see clause 1.1): ◦ on a stated
Q&As
Novation vs assignment Novation should be distinguished from assignment. Novation occurs when A and B are party to an agreement and B 'transfers' both their obligations and rights under the agreement to C, such that C can be said to 'step into the shoes' of party B. The result of a novation is a new contractual relationship between A and C, and the contract between A and B being extinguished. An assignment is 'an immediate transfer of an existing proprietary right, vested or contingent from one party to another'. ‘Assigning a contract' is concerned with transferring a party's rights under the contract only, and not the transfer any of their obligations, a third party. In a contract between A and B, B can choose to assign their rights under the contract to C. The result of an assignment is that the original contract between A and B remains in place, no new
Q&As
Parties to a contract often seek to exclude liability in relation to certain types of losses, which can include consequential losses. Such clauses fall within the Unfair Contract Terms Act 1977 (UCTA 1977) for business-to-business contracts and the Consumer Rights Act 2015 (CRA 2015) for consumer contracts. The validity and enforceability of a clause excluding liability will depend on the facts of the case, terms used and whether these are broad enough to cover all the losses and nature of claims arising (for example claims in contract and tort), the identity of the parties (whether this is a B2B or a B2C transaction), whether the clause is deemed fair. For further information, see Practice Note: Exclusion and limitation of liability. For business-to-business contracts, any term of a contract must
Q&As
Initially, the terms of the contract should be checked for any provisions relating to delivery, acceptance, rejection or returns. Terms may be either express or implied: • express terms—are terms which are actually recorded in a written contract or openly expressed in an oral contract at the time the contract is made (or there may be a combination of written and oral express terms) • implied terms—are not stated in the contract but arise ‘by implication’ to reflect the intention of the parties at the time the contract was made. Terms may be implied by fact, law or custom. For guidance on implying terms into contracts, see Practice Notes: ◦ Contract interpretation—terms implied by law ◦ Contract interpretation—terms implied by fact ◦ Contract interpretation—terms implied by custom and usage The remainder of this response assumes that the contract
PRECEDENTS
Schedule of amendments to the jct MEASURED TERM contract 2016 The Contract comprises the completed Measured Term Contract 2016 (MTC 2016) published by the JCT subject to the following amendments: ARTICLES Articles 5 and 6 Article 5 & 6 Principal Designer and Principal Contractor In each Article, after ‘for the purposes of the CDM Regulations’, insert ‘and the Dutyholder Regulations’. Article 7 Article 7 Arbitration Delete Article 7 and insert ‘Not used.’ Article 9 Insert new Article 9 as follows: ‘Article 9 [To be added on the face of the contract] The Employer and the Contractor agree that the modifications in the Schedule of Amendments attached hereto (as initialled by the parties) shall be incorporated into this Contract and the provisions of the Agreement, the Conditions and the Schedules annexed to the Conditions shall have effect as modified by the Schedule of Amendments which together comprise the ‘Contract’. If there is any discrepancy between the Agreement and/or the Conditions and the Schedule of Amendments, the wording of the Schedule of Amendments shall prevail.’ [Article 10 Insert a new Article 10 as follows: ‘Article 10 Collateral warranties Within 14 days of the Employer’s request,
Q&As
The general rule is that the limitation period will commence on the date on which the cause of action arises. A distinction is to be made between claims made in contract and in tort—for contractual claims, the cause of action accrues on the date of the breach (regardless of whether any damage is suffered or whether the other party knows of the breach) but for claims in tort, the cause of action does not generally accrue until damage is suffered. For defects claims or claims about the works based on breach of a building contract, this will often be from the date of practical completion, even where the contract does not expressly state this. In Oxford
Q&As
Repudiatory breach The general rule is that a party to a contract must perform precisely what they agreed to do. Failure to do so constitutes a breach of contract. For further information, see Practice Note: Termination for breach of contract. A ‘repudiatory breach’ is a breach of contract that goes to the very core of the contract and gives the innocent party the right to treat the contract as being disregarded and entitling the innocent party to refuse to be bound by its terms. For further information, see Practice Note: Repudiation of contract. It is difficult to demonstrate circumstances which may amount to a repudiatory breach of contract, as what this will vary with each contract on the basis of the varying obligations.
Q&As
Contracts governed by the Public Contracts Regulations 2015 (PCR 2015), SI 2015/102, often envisage a service arrangement that will last over a period of time and, because of that, the contract may contain sophisticated mechanisms by which various categories of change can be effected during the contractual term. This may include extensive clauses in relation to the extension of the contract. Whether the expired contract can be extended depends on the extension clause in question. If, for example, the clause provided that the contract could be extended after its expiration, the contract could be extended in accordance with PCR 2015, SI 2015/102. The relevant provision of PCR 2015, SI 2015/102, reg 72 sets out a comprehensive set of principles that will determine when a contract or framework agreement may be modified without a new procurement and when a new procurement procedure will be required.
PRACTICE NOTES
This Practice Note serves as a quick reference guide for practitioners comparing the law of damages as it applies to claims in tort and in contract. For the basic principles of the law of damages, see Practice Note: The remedy of damages—general principles. For detailed guidance on the law as it applies to contract claims, see: Contractual breach damages and remedies—overview. For detailed guidance on the law as it applies to claims in tort, see: Damages in tort and negligence claims. For guidance on the concept of ‘special damages’ and ‘general damages’ which are unique to pleading personal injury and clinical negligence claims, see: Past expenses and losses—overview. For guidance on attempts in drafting commercial contracts to exclude and/or limit liability for certain types of losses, see Practice Note: Exclusion and limitation of liability. General principles Contract Tort Compensatory function ’...where a party sustains a loss by reason of a breach of contract, he is, so far as money can do it, to be placed in the same situation, with respect to damages,