This Practice Note is part of a series of notes which examine commercial property contract clauses from the buyer’s perspective and suggests practical amendments and issues to look out for. It focuses on typical clauses dealing with: • the management of occupational leases (OLs) affecting the property between exchange and completion, and • existing maintenance/service contracts It considers how these matters are commonly dealt with in practice, the relevant Standard Commercial Property Conditions (Third Edition — 2018 Revision) (SCPCs) and suggests practical due diligence and drafting tips for buyers. Occupational lease management between exchange and completion The parties should agree in the contract how management matters relating to occupational leases will be dealt with in the period between exchange and completion. Buyers should be most concerned about this issue where the property is multi-let and where there is a significant gap between exchange and completion. For a single-let property with a short period to completion (say less than a month) the buyer might take a more relaxed approach and rely on the

If a parent company guarantee (PCG) is not signed before the completion of a contract, the obligation to provide the PCG may persist. In Liberty Mercian Ltd v Cuddy Civil Engineering Ltd and another, it was determined that the obligation to provide a PCG, bond, or warranty survives termination or repudiation of the contract because these are considered collateral to the substantial stipulations of the contract and are merely procedural and ancillary. Therefore, the contractor remains under a continuing obligation to

Construction analysis: Parties in a construction project were in dispute over the meaning of a waiver clause in a settlement agreement (the Waiver Clause); in particular, whether it involved the waiver of both past and future financial claims by the defender. The defender sought to introduce evidence of the pursuer’s conduct, post-settlement, to interpret the meaning of the Waiver Clause. The Court of Session held that this evidence was irrelevant. The court also considered, in relation to an alternative claim by the pursuer for rectification of the Waiver Clause, whether section 9 of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1985 (LR(MP)(S)A 1985) was engaged (which takes account of the interests of third parties). There were, however, insufficient averments to explain: (i) the nature of any reliance by third parties on the existing wording of the Waiver Clause; or (ii) how their interests would be affected by the proposed additional wording. Written by Nick McAndrew, advocate at Ampersand Advocates.

As identified in Practice Note: Real estate development finance—introductory guide to collateral warranties, the purpose of a collateral warranty is to create a contractual link where there wouldn't normally be one, thereby enabling a third party to have a direct contractual relationship with the parties to the original contract. The third party can then

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Consumer Rights Act 2015, s 100 (CRA 2015) provides that the Act will only apply to goods or services as of 1 October 2015. For more information, see Practice Note: Consumer Rights Act 2015—summary. The question is: at what point, if at all, do oral negotiations and subsequent work become a legally enforceable contract? Formation of contract For a contract to be effective, four key elements must be present: • offer • acceptance • consideration, and • the intention to create legal relations Acceptance

This Q&A assumes that the term ‘honorary contract’ refers to a relationship between an individual and an organisation whereby the individual is carrying out activities, such as work or research, for that organisation, but they are receiving no remuneration from the organisation for those activities. Honorary contract arrangements are common in the NHS. In some cases, the individual will be employed by another organisation, and will continue to be paid by that other organisation for the duration of the contract with the first (host) organisation. This Q&A also assumes that the EEA national is not continuing to carry out work for the EEA organisation while the honorary contract is subsisting. Article 45 of the Treaty of the Functioning of the European Union does not define the term ‘worker’

Where a contract is specifically terminated, for example under a contractual clause or at common law (ie repudiation), such termination operates prospectively and both parties are discharged from any further performance under the contract of their primary obligations (eg payment or carrying out remedial works). See, for example, Photo Production Ltd v SecuricorTransport Ltd. This is different to the position whereby a contract is effectively completed because all of the parties’ primary obligations have been satisfied. They are, however, still enforceable in the future, if required. Under some contracts, a party’s obligations may be considered ‘closed’ ie all primary obligations or matters relating to it are deemed to have been completed/concluded with nothing outstanding or open to challenge. As set out below, this is normally achieved in JCT contracts by the issuance of the final certificate or statement. The practical completion certificate or certificate of making good defects may also have this effect, but to a more limited

We are not aware of any case law which considers the meaning of a ‘fair allowance’ under clause 5.6.1 of the JCT Standard Building Contract 2011/2016 where the quantities of work have changed. However, it would appear that when making a fair allowance for any significant change in the quantity of the work supplied,

Construction analysis: On 15 May 2024, the Joint Contracts Tribunal (JCT) published the 2024 editions of its Minor Works Building Contract, Minor Works Building Contract with contractor’s design, Minor Works Sub-Contract with sub-contractor’s design, Short Form of Sub-Contract and Sub-subcontract 2024 to add to the publication on 17 April 2024 of its Design and Build Contract and Design and Build Sub-Contract Agreement and Conditions, along with associated guides. In this article, we consider how these contracts differ from their 2016 equivalents and the extent to which the same changes have been made in the Minor Works and sub-contracts as had been made in the 2024 DB forms.

Novation is the method by which the parties to an existing contract 'transfer' the rights and obligations of that contract to a third party. Novation is not strictly a transfer of rights and obligations but a discharge of the rights and obligations between contracting parties and a recreation of them with a third party (replacing an original contracting party) and one (or more)

ARCHIVED: This flowchart has been archived and is not maintained. This flowchart illustrates