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NEWS
Construction analysis: The Privy Council, on an appeal from the Supreme Court of Mauritius, held that an arbitrator was wrong in law to conclude that a lump sum contract, based on the JCT Standard Form of Contract 1980, had been varied by the parties as a result of significant additional and substituted works so as to become a measure and value contract. The board also considered that the arbitrator was correct to dismiss the employer’s counterclaim for the costs of appointing third parties to carry out certain works—even if the contractor had been in breach, the employer had not identified any loss, ie excess payment over what it would otherwise have paid the contractor. The board further held that the arbitration agreement comprised two separate agreements, which were to be read together in determining the ability to appeal the arbitration award.
Q&As
Inconsistency between the name and registered number of a company on the face of a contract may create issues relating to identity, privity and capacity. Contractual provisions (including the identification of the parties), will be interpreted in accordance with what the parties are considered to have intended, judged objectively and in the light of the relevant factual background known to both parties. The courts will interpret a contract in accordance with the principles established by Lord Hoffman in ICS v West Bromwich Building Society and the line of cases since. For more information, see Practice Notes: • General rules of contract interpretation—summary • Contract interpretation—the guiding principles • Contract interpretation—rules
Q&As
For the purposes of this Q&A, it is assumed that the deceased was a sole buyer. If the buyer dies between exchange and completion, the validity of the contract is not affected. The benefit and burden of the contract passes to the personal representatives of the deceased who are bound to complete. Therefore, it is not open to the personal representatives to decide not to complete because the deceased had made a bad bargain (Death of a contracting party: Halsbury's
Q&As
We have assumed that the contract in question is subject to the Housing Grants Construction and Regeneration Act 1996. In construction contracts, the employer will typically retain an agreed percentage from interim payments due to the contractor as security for the future performance of its obligations under the building contract—this is known as the retention. The Court of Appeal in Relicpride Building Co Ltd v Cordara held that the purpose of the retention was to act as a security by ensuring that the employer had a sum available from which to indemnify itself in respect of any loss or damage that it might suffer through a failure by the contractor to rectify any outstanding defective items during any relevant defect rectification period. The employer was obliged to give the contractor a reasonable opportunity to fulfil its outstanding obligations in respect of defective works, however,
Q&As
It is open to parties to an employment contract to agree a contractual provision enabling the employer to recoup money expended on training an employee if the employee leaves their employment, usually within a specified period of time. Care must be taken in the drafting of such a clause to ensure that it is enforceable, and further, if it is to be enforced, that it does not take the employee’s pay below the national minimum wage unless the employee chose to leave or was dismissed because of their conduct (see Commissioners for HMRC v Ant Marketing , and the accompanying Employment News Analysis: Ant Marketing). Without such a contractual provision there is no free-standing right for an employer to recoup training costs
Q&As
Where the parties are contracting on the basis of an unamended JCT Design and Build Contract 2011 or 2016, the standard of care to be exercised by the Contractor in relation to the design is reasonable skill and care. This arises because the contract provides that the Contractor has the same liability
Q&As
Exercising the right to buy (RTB) If a tenant seeks the right to buy (RTB), they must serve notice on the landlord in the prescribed form (Form RTB1 in England, WRTB1 in Wales). The current form includes guidance for the tenant on the RTB process and highlights sources of information and advice. The landlord must then, unless the notice is withdrawn, serve a notice (Form RTB2 and WRTB2 in Wales) on the tenant: • admitting the right, or • denying the right and stating reasons why The RTB2 must be served within four weeks of the
PRACTICE NOTES
Introduction This Practice Note is part of our student series, aimed specifically at students undertaking their LLB. It examines the development and modern operation of the doctrine of privity. It begins by outlining the orthodox common law position and its conceptual foundations, including the link between privity and consideration. The Practice Note examines the development, operation and reform of the doctrine. It begins by outlining the orthodox common law position and its conceptual foundations, including the relationship between privity and consideration. It then analyses the principal judicial responses to the doctrine’s rigidity, including collateral contracts, agency, trusts of a promise, restrictive covenants and recovery of third-party loss, with reference to leading cases. The Practice Note then analyses the statutory reform introduced by the Contracts (Rights of Third Parties) Act 1999, examining the structure and interpretation of sections 1(1)–1(6), including the identification requirement under section 1(3), and key authorities. It focuses on how third parties may now enforce contractual terms where clearly identified, and how the Act preserves certainty and party autonomy. A consolidated case table
Q&As
It is assumed in this scenario that the notice is an agreed notice because it is a notice entered under the Land Registration Act 1925 which is treated as an agreed notice by virtue of paragraph 2(1) of Schedule 12 of the Land Registration Act 2002 (LRA 2002). We also assume that there is no possibility of locating the contract in the pre-registration deeds or by obtaining historical copies of the register using form HC1 or by obtaining an office copy of the entry in the Land Charges register from the Land Charges Department. An agreed notice may be removed if the registrar is satisfied that the interest
Q&As
European orders for payment (EOPs) were introduced through Regulation (EC) No 1896/2006 (the Regulation). EOPs are a means by which a claimant can seek payment from a defendant for an uncontested specific money claim without having to initiate court proceedings. The Regulation (EC) No 1896/2006 does not contain an express exception for arbitration unlike, for example, Brussels I (Regulation (EC) 44/2001) or the Brussels I (recast) (Regulation (EC)1215/2012). Article 2(1) of the Regulation provides that it applies to civil and commercial matters in cross-border cases, irrespective of the nature of the court or tribunal
Q&As
Damages for breach of contract are compensatory and the aim is to place the claimant in the same position, so far as money can do it, as if the contract had been performed. Contract law damages are further not a matter of discretion. They are claimed as of right, and are awarded or refused on the basis of legal principle. For further guidance on damages for contractual breach, see Practice Notes: • Contractual damages—general principles • Contractual damages—pecuniary losses • Contractual damages—non-pecuniary losses In relation to financial loss (pecuniary loss), there are three different categories of contractual damages that may be available: • expectation-based damages (also known as ‘loss of bargain’ damages) • reliance-based damages • gains-based
Q&As
The general position is that, where parties have provided that liquidated damages (LADs or LDs) will be payable by the contractor if completion is delayed, this will be the employer’s sole remedy for such delay. In this situation, the employer will therefore not be able to seek general (ie unliquidated) damages from the courts in addition to, or instead of, claiming LADs—whether or not the parties have used express ‘sole remedy’ wording. This is illustrated particularly in cases where parties have inserted ‘nil’ or ‘N/A’ as the amount of LADs payable. For example, in Temloc v Errill Properties, the parties had inserted ‘nil’ in the contract particulars against the amount of LADs payable. The court held that the effect of this was that LADs were still the employer's sole remedy for delay damages under the contract, but the parties had agreed the amount would be nil. The