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PRACTICE NOTES
’No greater liability’ clauses are a common feature of collateral warranties and third party rights memoranda. Their purpose is to ensure that the warrantor/promisor does not have greater exposure under the third party rights granted than it has under the original contract. However, the drafting of these clauses has been subject to debate and can sometimes result in unintended consequences for the parties. Collateral warranties—general principles It is a generally accepted commercial principle, among users of collateral warranties, that, if a party enters into a warranty which is collateral to an underlying contract, it should not be under any obligations or duties under that warranty that are greater or of a longer duration than those under the original contract. In fact, professional indemnity insurance policies commonly exclude cover for claims under a collateral warranty that result from obligations that are more onerous than those under the original or underlying contract. In British Overseas Bank v Stewart Milne the court recognised that the underlying commercial purpose of collateral warranties
NEWS
This week's edition of Construction weekly highlights includes a case where the Inner House of the Court of Session held that compliance with notice requirements was a condition precedent to the contractor’s right to recovery loss and expense (FES v HFD Construction), a case in which the Commercial Court ruled that performance bonds are autonomous contracts, independent of disputes between the parties to the underlying contract (Power Projects v Star), updated guidance from the Ministry of Housing, Communities and Local Government (MHCLG) on the amendments to the Building Safety Act 2022 (BSA 2022) introduced by the Leasehold and Freehold Reform Act 2024 (LFRA 2024), and responses from several built environment industry bodies to the Autumn Budget 2024.
GLOSSARY
A contract that creates a relationship of landlord and tenant.
GLOSSARY
An investor or partner (in a mudaraba contract).
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 Show 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. In this regard, see Practice Note: Contract interpretation—express terms in contracts,
Q&As
In this query, a person, usually a developer, wishes to buy land for development but is concerned that planning permission may not be forthcoming. The developer does not want to be bound to acquire land which may well prove to be worthless for development purposes and so the developer might: • enter into a conventional contract at a price to reflect its current value without planning permission subject to an uplift or overage payment in the event that planning permission is granted within a fixed period, or • enter into a contract conditional upon planning permission being obtained within a fixed or reasonable time, or, as in this case • enter into an
Q&As
Licence or tenancy Consideration may need to be given to whether or not occupation of the hut could be implied into the trade agreement. However, this would seem unlikely on the basis of existing case law, ie as Lord Neuberger acknowledged in Marks and Spencer plc v BNP Paribas Securities Services Trust Co (Jersey) Ltd, a term should not be implied into a detailed commercial contract merely because it appeared fair or merely because one considers that the parties would have agreed it if it had been suggested to them. They were necessary but not sufficient considerations. A term would only be implied if, without it, the contract
PRECEDENTS
These precedent clauses, provided by the Royal Institution of Chartered Surveyors (RICS) and the NEC, can be used to incorporate into a construction contract the Conflict Avoidance Process (CAP). The CAP involves the appointment of a Conflict Avoidance Panel—either in the contract or by agreement at a later time. The intention behind the clauses is for the parties to commit to the early identification of potential disputes, to promote collaborative working and the resolution of disagreements using conflict avoidance measures. From the RICS Dispute Resolution
PRECEDENTS
[Insert in para 5.1 of claim form ET1:] 1 1. The Claimant was employed by the Respondent as a [insert job title, eg Senior Accountant] from [insert date] until [his OR her OR their] dismissal on [insert date]. The Respondent is [insert brief description of the nature of the Respondent, eg an internet service provider]. [ The contract of employment ] 2 [The Claimant’s contract of employment included a notice period of [insert details, eg three months].] 3 [Insert details of any other relevant contractual terms of relevance to the performance capability issues in question.] [ The Respondent’s policies and procedures ]
Q&As
This Q&A assumes that the contract of retainer was not intended to be a conditional fee agreement (CFA) or a damages-based agreement (DBA). The need for a written retainer generally On its most basic analysis, a solicitor’s retainer with their client (retainer) is a simple contract. It is trite that most contracts do not need to be committed to writing to be enforceable, and a retainer is generally no different. The only retainers which do need to be in writing to be enforceable are CFAs (pursuant to section 58(3) of the Courts and Legal Services Act 1990 (CLSA 1990)) and DBAs (per CLSA 1990,
PRACTICE NOTES
This Practice Note considers the content of the arbitration agreement with particular focus on the position under English and Welsh law (England and English are used as shorthand throughout). This Practice Note should, in particular, be read in conjunction with Practice Notes: Arbitration agreements—definition, purpose and interpretation and Arbitration agreements—the in writing requirement. Further Practice Notes on arbitration agreements are also available in the ‘Related documents’ pod. Contractual requirements for arbitration agreements Under English law, an ‘arbitration agreement’ must be made in accordance with usual contractual principles. Compliance with such principles will be determined by the law applicable to the arbitration agreement (about which see below). In Black Sea Commodities v Lemarc Agromond, the court was clear that the doctrine of separability of the arbitration agreement did not alter that general position. It is not possible for an arbitration agreement to be deemed agreed if there was no consensus ad idem to the contract in which the putative arbitration agreement would sit (Black Sea Commodities v Lemarc Agromond). See also Mustill & Boyd, Commercial Arbitration
Q&As
Broadly, sponsoring self-employed individuals appears to be envisaged under the sponsor licensing regime (for relevant discussion, see Q&A: Is it possible for a Skilled Worker licensed sponsor to sponsor a migrant to become a member of an LLP rather than an employee? Note that this does not deal with separate tax and employment law tests relating to self-employment/types of employment). In accordance with Home Office guidance Workers and Temporary Workers: guidance for sponsors part 2 S1.29, a genuine contract for employment or services between the employer and the self-employed worker must be in place. The contract must show: • the names and signatures