Where a party owns land with the potential for development, and wishes to retain a financial interest in the uplift in value of that land in respect of that future development, but also wishes to dispose of the land, it is common for the transferor and the transferee to enter into an overage agreement. Such an agreement is a contract that provides that the transferee (or its assigns) will pay to the transferor a sum calculated by a formula (usually a fixed percentage of the increase in the value of the land in a developed state, or if planning permission is obtained) on the happening

Where parties to a dispute, whether commercial or otherwise, reach terms of settlement, it is usual to embody those terms in a settlement agreement. The settlement agreement will contain the terms on which the compromise has been reached, and will usually amount to an actionable contract between the parties and, where proceedings have been issued, the schedule to a Tomlin Order staying the proceedings save for the purpose of enforcing the terms of the compromise. The terms of the settlement agreement will usually include various standard

It is possible for an insurer to avoid an insurance policy on the basis of non-disclosure and/or misrepresentation of material facts (see, by way of example, Pan Atlantic Insurance Co Ltd v Pine Top Insurance Co Ltd). An insurance contract is one of utmost good faith, and failure by the insured to disclose a material fact, or misrepresentation of a material fact, potentially enables the insurer to make use of the legal remedy of avoiding the policy. If the policy is avoided, the insurer is entitled to act as though the policy never existed. However, the circumstances that allow an insurer

When a worker's employment terminates, they have a statutory entitlement to pay in lieu of accrued but untaken holiday from their final leave year. As to whether the payment in lieu can be calculated on the basis of basic salary only, this will depend on what provision is made in the employment contract (or other ‘relevant agreement’). The payment to be made in lieu of accrued unused holiday is: • the amount specified in a 'relevant agreement' covering this situation, or • if there is no relevant agreement, the

Where a supplier sells extended warranties on domestic electrical goods it is likely that the supplier will be obliged to comply with the terms of the Supply of Extended Warranties on Domestic Electrical Goods Order 2005, SI 2005/37. A domestic electrical good is defined in the Supply of Extended Warranties on Domestic Electrical Goods Order 2005, SI 2005/37, r 1(3) as a product designed to be connected to an electricity supply or powered by batteries and used for domestic purposes, but does not include watches, jewellery or fixed installations (other than integrated appliances). ‘Extended warranty’ by the same provision is defined as being a contract

Testamentary options A testamentary option arises when a person, by his will, directs that a beneficiary should have the option of purchasing property forming part of the estate. As explained in Talbot v Talbot [1968] Ch 1, upon exercise of that right the beneficiary enters into a contract with the executors. Williams on Wills Precedents notes at para 209.1 that: Testamentary options are a peculiarity. The gift of an option to acquire property at its market value is not really a gift at all and might be described as

Whether or not the proposed activity constitutes a breach of contract will depend upon: • the respective definition of 'exclusive' and 'product' within the distribution agreement, and • any restrictions specifically imposed on the manufacturer That will determine if the proposed action is a breach of the exclusive distribution agreement. For information about the importance of definitions in contracts and general rules of interpretation, see Practice Note: Defining terms. Exclusivity The terms 'exclusive', 'non-exclusive' and 'sole' are used frequently to describe the rights granted under

Interim and conservatory measures from the tribunal The tribunal in an arbitration under the Dubai International Arbitration Centre Arbitration Rules (DIAC and the DIAC Rules) has the power to issue provisional orders or take any other interim or conservatory measures (including injunctions) that it deems necessary, including to conserve goods which form part of the subject matter in dispute (Appendix II, Article 1). For example, in a dispute between a shipbuilder and a purchaser where the purchaser is reclaiming advance payments following the termination of the contract, the purchaser may wish to prevent the shipbuilder from selling the completed vessel or from selling

A lease is a contract between parties which provides for rights and obligations arising out of the occupation by the tenant of property owned by the landlord. The lease must be for a defined term or a periodic term and comes to an end only upon its expiration by effluxion of time (or, in some circumstances, a later period specified by statute, such as the continuation by virtue of Part II of the Landlord and Tenant Act 1954 of business tenancies that are not contracted out), or where validly terminated by one or other of the parties,

Restructuring & Insolvency analysis: The court directed the supervisor of a company voluntary arrangement (CVA) to issue a certificate of termination following findings of irremediable breach. Emphasising that a CVA is a contract between the company and its creditors, the court dismissed the company’s misconceived cross-application for a stay of the CVA pending the outcome of the creditor’s earlier challenge to the CVA. The court was further critical of the supervisor for not issuing a certificate of termination and issuing a winding-up petition in the circumstances, which he was obliged to do under the CVA. Written by Morwenna Macro, barrister at Five Paper.

Commercial analysis: The High court judgment in Macdonald Hotels Ltd v Bank of Scotland Plc addressed a number of interesting issues for finance transactions. These included the potential for a Braganza-style term to be implied into a lender's decision to withhold consent to the disposal of assets or the grant of security by the borrower, the nature and legal effect of a prohibition on assignment within a facility agreement where the 'assignor' may have ceased to be an obligor/group member and the status of a document where one party executes it as a simple contract and another as a deed. Annie Harvey, senior knowledge lawyer at Taylor Wessing, discusses the decision.

Restructuring & Insolvency analysis: The Court of Appeal held it was not fair for administrators to refuse to correct a contract based on a common mistake as to the value of proof of debt. Although the sum due had been determined by deed, the administrators should not have relied upon their contractual rights but should have agreed to increase the debt as admitted to proof. The creditor was entitled to seek relief both under paragraph 74 of Schedule B1 to the Insolvency Act 1986 (IA 1986), and the principle in Ex parte James. Written by Sarah Clarke, barrister at Hardwicke Chambers.