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Q&As
The standard forms of collateral warranty that parties involved in a construction project are most likely to suggest are published by: • JCT (drafted for use by contractors and sub-contractors) • CIC (drafted for use by consultants) The British Property Federation (BPF) previously published a standard form of warranty, but this is no longer being printed. There is no standard form NEC3 collateral warranty. In fact, only the Professional Services Contract (PSC) envisages the provision of collateral warranties—but it does not include a form of warranty within the contract, therefore the parties need to append the agreed form and include reference to it in the contract data. Parties entering into the NEC3 ECC form would therefore need to add a Z clause and attach an appropriate form of warranty to their contract. Funders are unlikely to accept any of the standard (published) form collateral warranties without amendment. This is due to the limitations on the warrantor’s liability that are included in most standard form warranties. Purchasers and tenants
PRACTICE NOTES
This Practice Note considers the effect that the unreasonable refusal of alternative employment has on an employee’s right to a redundancy payment, the conditions that an offer of alternative work needs to fulfil in order for this right potentially to be affected, what constitutes an offer of suitable employment, what constitutes an unreasonable refusal and the burden of proof in these cases. Employees who are made redundant are sometimes offered further work. If such an offer is made but is refused by the employee, this may have the potential to remove the employee's right to a redundancy payment. Only offers of further work that fulfil certain conditions have the potential to affect the employee's right to a redundancy payment. The conditions are as follows: • the offer must be for a renewed contract, or a new contract • the renewed or new contract must take effect either immediately after expiry of the old one, or no more than four weeks later • the offer must be made before the old contract expires If the employee
PRACTICE NOTES
A claim for negligent misrepresentation may often be brought alongside or in the alternative to a claim for negligent misstatement. It is therefore useful to understand the key practical considerations in respect of both types of claim. Comments Negligent misrepresentation Negligent misstatement Key ingredients of claim —the statement relied on by the representee was a statement made to them by or on behalf of the representor—the statement was intended by the representor to induce the representee to enter into the contract—the statement actually induced the representee to enter into the contract—the statement had the character of a representation—the representation was falseInherent therefore in a negligent misrepresentation claim is the entering into of a contract resulting from the misrepresentation —an untrue statement made by the representor to the representee—the claimant relied on the misstatement—the claimant suffered loss as a result of so doing—there is no requirement for a contract to have been entered into between the claimant and the representor Parties
PRACTICE NOTES
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z Parent company guarantee (PCG) A contract between a parent company and a beneficiary, by which the parent guarantees its subsidiary's performance under a separate contract between the subsidiary and the beneficiary (eg a building contract). In the event of the subsidiary failing to perform its obligations under its contract with the beneficiary, the parent company may be required to perform its obligations in its place or reimburse the beneficiary for losses suffered as a result of the subsidiary’s failure to perform. See subtopic: Parent company guarantees in construction projects. Partial possession This is where the employer takes possession of part(s) of the works before practical completion of the whole project, for example to rent a completed floor to a tenant while works continue on other floors. In such a case, practical completion is deemed to have occurred for that part. See Practice Note: Early use and partial possession (Partial possession). Partnering A
NEWS
Arbitration analysis: Throughout the course of an international commodity transaction there are many legal issues and potential disputes that can arise as the commodity crosses multiple jurisdictional boundaries and goes through many hands in the journey from producer to end user. Given the international nature of commodity markets, it is usual for the contracts involved to incorporate arbitration clauses. This analysis considers the types of disputes arising from the sale of commodities, the disruption to the LNG market brought about by the Russian war, and coverage of prospective types of disputes in the new metals market. Analysis written by Amanda Lees, partner at King & Wood Mallesons.
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Q&As
Subject to an employee's right to object to the transfer, the effect of a relevant transfer under the Transfer of Undertakings (Protection of Employment) Regulations 2006, SI 2006/246 is that the transferee acquires: • all rights, powers, duties and liabilities under or in connection with the contracts of employment of transferring employees • liability for all pre-transfer acts and
NEWS
Construction analysis: The Technology and Construction Court (TCC) refused to summarily enforce an adjudicator’s decision made in favour of a company, which company was one of two partners in an unincorporated joint venture. The joint venture had been appointed as sub-contractor, under a sub-contract for works at a nuclear facility. The court found that the company alone was not a party to the sub-contract, and so the adjudicator had lacked jurisdiction. The case emphasises the need for parties to carefully consider the legal implications of carrying on projects as an unincorporated joint venture.
Q&As
A governor of a public body who is elected by the public will be regarded by the law as an office-holder (an ‘office’ in this context meaning a subsisting, permanent, substantive position which has an existence independent of the person who fills it, which goes on and is filled in succession by successive holders). They may also be regarded as a ‘worker’ if they have a contract with that body to perform services. Whistleblowing protection is given to ‘workers’ under the Employment Rights Act 1996 (ERA 1996). Under ERA 1996, s 47B, an individual has the right not to be subjected to a detriment by their employer, done on the ground that they made a protected disclosure, if they are a ‘worker’. A worker is any individual who: • has entered into works under or used to work under a contract of employment or any other contract (whether express or implied, oral or in writing), under which they • will personally carry out work
Q&As
The mere act of a company going into administration does not render a post-termination restriction (also known as a restrictive covenant) unenforceable. Consideration will need to be given to: • the circumstances in which a post-termination restriction becomes unenforceable, and • the effect of administration on the contract of employment Effect of repudiatory breach A repudiatory breach of contract by the employer will usually result in the employer being unable to rely on any post-termination restrictions (Billposting Co Ltd v Atkinson, Cantor Fitzgerald v Bird). However, there will be no repudiatory breach or wrongful dismissal where the terms of the contract expressly permit the employer to give pay in lieu of notice rather than allowing the employee to work their notice, and the employer dismisses in accordance with those contractual terms (Stewart (Rex) Jeffries Parker Ginsberg v Parker). For more information, see: • Practice Note: Post-termination restrictions—the
Q&As
We have been unable to find any legal authority for a definition of ‘revenue’. Contract terms will be construed and interpreted in accordance with the general principles and rules of contract interpretation as established by a considerable body of case law. Much will depend on the context and factual background of the agreement in which the term is used. A simplified and brief summary of these principles is provided in Practice Note: General rules of contract interpretation—summary. ‘Revenue’ is often equated with ‘income’ or ‘turnover’ and is generally understood to mean the total amount of income received or generated by a business. A company can be receiving or generating revenue but not be making a profit. Debts and liabilities are generally not deducted when calculating revenue, whereas they are when calculating profits. ‘Revenue’ may typically be referred to in the context of an exemption
PRECEDENTS
This Agreement is made on [insert date] Parties 1 [Insert name of employer] whose registered office is at [insert address], company registration number [enter number] (‘Employer’); and 2 [Insert name of worker] of [insert address] (‘you’). Background (A) You are employed by the Employer under your Contract. (B) Under your Contract, you carry out work that is unmeasured work for the purposes of the National Minimum Wage Regulations. (C) This Agreement is a daily average agreement as contemplated by Regulations 49 and 50 of the National Minimum Wage Regulations. (D) You and the Employer agree that Average Daily Hours are approximate to Realistic Average Daily Hours. the parties agree as follows: 1 Definitions 1.1 Actual Availability Commitment • means the number of hours per day that you are actually available to carry out duties[ if the work is needed or if work is available] under your Contract; Actual