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Q&As
Right of first refusal and conveyance not preceded by contract This response deals with the question of the procedure to be adopted where a landlord wishes to dispose of premises to a third party buyer after the expiry of an offer notice served under section 5D of the Landlord and Tenant Act 1987 (LTA 1987) to qualifying tenants of flats which have not been accepted. Some long leaseholders qualify for a right of first refusal of their freehold under LTA 1987. The seller is obliged to serve an offer notice to the leaseholders before selling the freehold to a third party buyer. More than one offer
PRACTICE NOTES
ARCHIVED: This Practice Note has been archived is not maintained. Brexit impact—public procurement The UK public procurement regime derives from EU public procurement laws, and is therefore impacted by the UK’s withdrawal from the EU. For general updates on the process and preparations for Brexit, see Practice Note: Brexit timeline [Archived]. For further reading on the impact of Brexit on public procurement, see Practice Note: Brexit—the implications for public procurement [Archived]. Status of grants in public procurement law Public Contracts Regulations 2015 The Public Contracts Directive, which sets out the European Union public procurement rules, is implemented in the UK (as regards England, Wales and Northern Ireland) by the Public Contracts Regulations 2015 (PCR 2015). PCR 2015 apply where one of the parties to any arrangement is a 'contracting authority' as defined at regulation 2(1). In addition, the arrangement must be within the scope of PCR 2015—that is, subject to exemptions (at regulations 7 to 12 of PCR 2015): • there is an arrangement which is a 'public services contract', 'public supply
PRACTICE NOTES
This Practice Note considers how to adopt a negotiation strategy including tips on fact management, client objectives (including the best alternative to a settlement ), evaluation of your counter-party’s position, negotiation tactics and whether to start with a settlement offer or settlement discussion. For guidance on who should be involved in settlement discussions and issues of confidentiality and ‘subject to contract’ see Practice Note: Settling disputes—who, confidentiality and subject to contract. For guidance on assisted forms of settlement process, see Practice Note: What is ADR? and related content. For guidance on making offers and documenting a settlement, see Practice Notes: • Settling disputes—settlement offers (Calderbank, WPSAC and Part 36) • Settling disputes—how to document a settlement and related content. Settling disputes—an early strategy for settlement Part of the process of litigation is the exchange of information under one of the specified pre-action protocols or (if none applies to the claim) under the Practice Direction Pre-Action Conduct and Protocols. The Letter of Claim and Letter of Response enable the parties to make progress in
Q&As
A collateral warranty is a contract which is collateral to an underlying or primary contract, such as a construction contract. The warranty creates a contractual link where there would not normally be one, thereby enabling a third party, such as a purchaser, to have a direct contractual relationship with the contractor, and to rely upon the undertakings or covenants contained in the warranty in order to bring an action in contract against the contractor if there has been a breach. For more information, see Practice Note: What are collateral warranties? When a contract, such as a collateral warranty, is silent on the issue of assignment, this means that the benefit of the contract can be assigned without limit or without requiring the consent of the other party. However, most collateral warranties contain express clauses which restrict or qualify the rights of assignment, such as limiting the number of times an assignment
PRACTICE NOTES
What is a dispute resolution clause? Many commercial agreements contain what is called a ‘dispute resolution clause’ or an ‘ADR clause’. Alternative dispute resolution (ADR) is a process of resolving a dispute otherwise than through court proceedings. Note that the Commercial Court and the Circuit Commercial Court use the term negotiated dispute resolution (NDR) for a method of resolving a dispute otherwise than through the courts, but for ease of reference, the term ADR is used in this Practice Note. The purpose of including a dispute resolution clause in an agreement is to provide the parties with a roadmap of how to deal with a dispute, should it arise under their agreement. A dispute resolution clause will specify how any disputes between the parties to a contract are to be resolved and will often require the parties to use a particular type or types of ADR process to resolve any dispute before resorting to litigation or arbitration. For the different types of ADR, see Practice Note: Which form of ADR? For general information on mediation
PRACTICE NOTES
Scope of Practice Note This Practice Note considers: • the doctrine of economic duress—raised as a defence so as to render void a contractual arrangement which the party alleging duress asserts was entered into as a result of economic duress (lawful act economic duress receiving Supreme Court confirmatory recognition in English law in the decision in Pakistan International Airline Corporation v Times Travel) • the doctrine of undue influence—again raised as a defence, whereby a party may seek to rescind a contract or set aside a transaction on the grounds that they entered into it by reason of undue influence being exerted upon them. More commonly seen in the context of domestic relations, eg between husband and wife in relation to jointly owned property, rather than a commercial, business context. The authoritative decision in this regard being RBS v Etridge • the tort of intimidation—not a defence but a free-standing cause of action based in tort, where the claimant seeks to recover damages; with elements of cross-over in respect of economic duress as seen in cases
PRACTICE NOTES
This Practice Note considers the different forms of construction contract which are available and which contracts are more suitable for particular types of work, taking into account factors such as the procurement method being used, the sector to which the works relate and the size and complexity of the works. There have been standard forms of building contracts in the UK for over 100 years and their use is extremely widespread. There are numerous forms that the parties to a construction project can choose to adopt—the range of contracts that has developed over the years reflects the different procurement methods that now exist, different risk profiles, the variety in size of projects and the varying demands/expectations of those who own and use/occupy buildings. Construction projects are complex, both in terms of the rights and obligations of the employer and the contractor who will carry out the work, and also in terms of what will physically occur on site. The contracts that govern these projects and the relationships associated with them therefore need to be clear and
PRACTICE NOTES
This Practice Note sets out the law on the use of boilerplate provisions in business-to-consumer (B2C) contracts. As well as providing details on the Consumer Rights Act 2015 (CRA 2015) (which regulates unfair terms in B2C contracts), it also looks at the Competition and Markets Authority (CMA) guidance ‘Unfair contract terms: CMA37’ (CMA Guidance). For discussion on the use of specific boilerplate provisions in B2C contracts, namely assignment, definitions and interpretation, dispute resolution (eg adjudication, alternative dispute resolution (ADR), arbitration), entire agreement, force majeure, governing law, jurisdiction, variation and waiver, see Practice Note: Boilerplate clauses in business-to-consumer contracts—specific clauses. For more information on the use of standard terms and conditions in B2C contracts generally, see Practice Notes: • Consumer standard terms and conditions—the business context • Consumer standard terms and conditions—the advertising and marketing context • Consumer standard terms and conditions—incorporation For our suite of template B2C contracts and drafting tips, see: Trading with consumers—overview and Drafting consumer contracts—checklist. What is ‘boilerplate’? ‘Boilerplate’ is a term used to describe the clauses that are included
NEWS
This week's edition of Construction weekly highlights includes publication of the Welsh developer remediation contract and related guidance, a Technology and Construction Court (TCC) decision confirming that minor irregularities or broad-brush explanations in an adjudicator’s decision are unlikely to constitute breaches of the rules of natural justice (Clegg Food v Prestige Car), a Royal Institution of Chartered Surveyors (RICS) consultation on the updated expert witnesses professional standard, and the Ministry of Housing, Communities and Local Government (MHCLG)’s announcement that the New Homes Accelerator Programme has supported delivery of 100,000 homes.
Q&As
How is the professional negligence claim being pleaded against the solicitors? Identifying the possible limitation periods that might apply depends on whether you are founding your claim against the solicitors in tort, contract or equity. In most cases there will be a contract between the professional, eg a solicitor, and the client. There may be express or implied terms as to the performance of obligations under the contract and there may be attempts to limit or exclude liability for inadequate performance. Where there has been a failure to perform as required by the contract, a claim in contract will arise. In addition, where a person assumes responsibility to perform professional services for someone who relies on those services, a duty in the tort of negligence to exercise reasonable skill and care arises even if the services are performed under a contract between those parties. Commonly, professional negligence claims against solicitors are pursued on the basis of both breach
CHECKLISTS
This Checklist is for drafting terms and conditions for the sale of goods. It sets out the key considerations when drafting business-to-business (B2B) standard form terms and conditions or a contract for the sale of goods. It considers the legal, regulatory and practical issues around the sale and supply of goods and is drafted with a seller/supplier bias. For general guidance on contracts for the sale of goods, see Practice Notes: Contracts for the sale and supply of goods—business to business and Implied terms in contracts for goods and services. For general guidance on key terms in commercial contracts more broadly, see Practice Note: Key terms and conditions in commercial contracts. General considerations Speak to departmental representatives within the business to establish any concerns they have and any customer feedback that should be addressed in the terms. Understand how the goods will be provided and any back-end processes, eg for delivery or returns, which need to be reflected in the terms. Check whether there are any pre-existing arrangements such as restrictive covenants
CHECKLISTS
This Checklist sets out the key issues to consider when drafting or reviewing a pre-construction services agreement (PCSA). It is important to remember that the content and scope of PCSAs will depend on the type of services required of the contractor and the estimated length of the pre-construction period. As a result, the drafting can vary considerably. See Practice Note: Pre-construction services agreements for more on PCSAs. PCSAs normally combine elements taken from a letter of intent, a consultant's appointment and a building contract. The essential clauses are similar to those found in a letter of intent, but with additional provisions to deal with liaising with other parties and preliminary works being carried out on site. However, unlike a letter of intent, PCSAs are drafted as conventional legal agreements with separate sections for parties and recitals. Key issues and clauses • Background A PCSA should contain a recitals or background section which explains the basis for the appointment and the intention of the parties. It should be clear that the agreement relates to the performance of the services only contained