BOILERPLATE AND COMMERCIAL CLAUSES vol 4

BOILERPLATE AND COMMERCIAL CLAUSES vol 4(3)

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About this title—authors, overview

Commentary

A.1 Scope of title

A.2 Checklists

Section 1159(2)

Section 1162

1.1 Introduction

1.2 When deeds must be used

1.3 Documents commonly executed as deeds

1.4 Why deeds are sometimes preferred

1.5 Formalities for executing deeds

1.6 Delivery of deeds

1.7.1 Individuals and companies

1.7.2 Individuals

1.7.4 Signing deeds only as complete documents

2.1 Purpose of recitals

2.2 Layout of recitals

2.3 Wording of recitals

3.2 Descriptions of parties

3.3 Legal name and status of parties

3.4 Address of party

3.5 Use of ‘party’ and ‘parties’

4.1 Law and jurisdiction

4.2 Exclusive and non-exclusive jurisdiction

4.3 Effect of national laws

4.4 International conflicts of laws

5.1 Purpose of arbitration clauses

5.10 Arbitral institutions

5.11 Enforcement—international contracts

5.12 Experts

5.13 Alternative dispute resolution (ADR)

5.14 Suitability of arbitration

5.2 Confidentiality and enforceability

5.3 Arbitration—drafting issues

5.4 Scope of the arbitration

5.5 Choice of arbitrator

5.6 Choice of procedure

5.7 Post-termination issues

5.8 Exclusion of appeal to court

5.9 Multi-arbitrator agreements

6.1 Notices

6.2.1 Writing

6.2.2 Personal delivery

6.2.3 Post

6.2.4 Electronic mail

6.3 Addresses

6.4.1 Time of delivery

6.4.2 Personal delivery

6.4.3 Post

6.4.4 Electronic mail

6.5 Proof of receipt

6.6 Confirmation by post

7.1 Reason for definitions clause

7.2 Definitions clause

7.3.1 Using columns

7.3.2 Using continuous paragraphs

8.1 Use of ‘affiliate’

8.2 Meaning of ‘affiliate’

8.3 Purpose of including definition

8.4.1 ‘Subsidiary’ and ‘holding company’ (Section 1159(1))

8.4.2 ‘Wholly owned subsidiary’ (Section 1159(2), Schedule 6)

8.4.3 ‘Parent’ and ‘subsidiary undertakings’ (Section 1162 and Schedule 7)

9.1 Use of ‘successors and assigns’ in general

9.2 Use of ‘successors and assigns’ in UK, USA

9.3 ‘Successors and assigns’—drafting points

10.1 Introduction

10.2.1 Format of interpretation clause

10.2.2 Amendment and replacement of statutes

10.2.3 Persons

10.2.4 References to clauses, sub-clauses or schedules

10.2.5 Clause headings

11.1 Introduction

11.2.1 Definition of ‘month’

11.2.2 Definition of ‘year’

11.2.3 Definition of ‘day’

11.2.4 Definition of ‘quarters’

11.3.1 Day on which time begins to run excluded

11.3.2 ‘Corresponding date’ rule

11.3.3 Ends of months

11.4 Expiry of defined period

11.5 Dates calculated ‘from’ and ‘until’

11.6 Duration of agreement

11.7 Use of ‘business day’, ‘business hours’

12.1 Language of the agreement

13.1 Service of process on overseas party

14.1 Use of receipts clause

15.1 Deciding if schedules are part of agreement

15.2 Content of schedules

16.1 General

16.2 Attestation

16.3 Testimonium

16.4 Testimonium—traditional format

16.5 Testimonium—modern format

16.6 Signatures

17.1 Counterpart documents in modern practice

17.2 Commercial practice

18.1 Background

18.2 Territory and the United Kingdom, Great Britain, Britain, British Isles etc

18.3 ‘European Union’

18.4 Drafting points—territory

19.1 Commencement

19.2 Distinguishing date of agreement and commencement date

20.1 Date of agreement

20.2 Drafting points—agreement date

21.1 Meaning of condition

21.2 Meaning of condition precedent

21.3 Meaning of condition subsequent

21.4 Form of conditions precedent and subsequent

21.5 Drafting points---conditions precedent and subsequent

22.1 Frustration of contract

22.2 Force majeure clauses

22.3 Types of force majeure clause

22.4 ‘Beyond the control’—labour disputes

22.5 Party responsible for force majeure event

22.6 ‘beyond the reasonable control’ or ‘beyond the control’ of a party

22.7 Effect of force majeure event

22.8 Temporary stoppage

22.9 Drafting points—force majeure clause

23.1 Types of termination provisions

23.2 Timing of termination

23.3 General

23.4 Breach of contract

23.5 Termination for breach

23.6 Termination on insolvency

23.7 Insolvency and partnership

23.8 Insolvency and a corporate party

24.1 Clauses surviving termination

24.2 Drafting points—survival of termination clause

25.1 Meaning of ‘subject to contract’

25.2 Heads of agreement

25.3 Contracts relating to land

25.4 Drafting points—status and legal effect of documents

26.1 General

26.2 Time limit to comply with the exercise of an option

26.3 Drafting points—options

26.4 Right of first refusal distinguished from option

27.1 Documents and statements comprising contract

27.2 Purpose of entire agreement clause

27.3 Attempting to exclude liability for misrepresentation and fraud

27.4 Drafting points—entire agreement clause

28.1 Amendment or variation clauses

28.2 Drafting issues—amendment or variation clause

28.3 Specifying amended clauses

28.4 Unilateral variation

28.5 Amending or varying agreements and third parties

29.1 Requirement for consent

29.2 Drafting points—consent

30.1 Introduction

30.2 Application of contra proferentem rule to commercial contracts

31.1 Exemption clauses

31.2 Interpretation of exemption clauses by courts

31.3.1 Unfair Contract Terms Act 1977

31.3.2 Misrepresentation Act 1967

31.4 Drafting and negotiating issues

31.5 Drafting points on ‘reasonableness’

31.6 Acceptance clauses

32.1 Exclusion of implied terms and warranties

33.1 Further action required after completion

33.2 Further assurance clauses

33.3 Irrevocable power of attorney

33.4 Drafting points—further assurance clause

34.1 Completion stage

34.2 Distinguishing between start and end of contract

35.1 Priority of documents

36.1 Meaning of ‘waiver’

36.2 Waiver and breach of contract

36.3 Waiver clauses

36.4 Waivers distinguished from releases

37.1 Severance of contract clause

37.2 Illegality or unenforceability

37.3 Severance and enforceability of remainder

38.1 Purpose of ‘cumulative remedies’ clause

38.2 Drafting points—cumulative remedies clause

38.3 ‘Expressio unius, exclusio alterius’

39.1 Use of ‘exclusive’, ‘non-exclusive’ and ‘sole’

39.2 Meaning of ‘exclusive’, ‘non-exclusive’ and ‘sole’

39.3 Avoiding ambiguity

39.4 Drafting points—’exclusive’

40.1 Appointments clause

40.2 Appointment of agents

40.3 Appointment clause—drafting points

41.1 Use of ‘assignment’,’ transfer’ ‘novation’

41.10 Permitted assignment

41.11 Drafting points—delegation and subcontracting; successors and assigns

41.2 Assignment of rights

41.3 Transfer of obligations

41.4 Novation

41.5 Effect of a no-assignment clause

41.6 Prohibition of assignment without consent—all parties

41.7 Prohibition of assignment without consent—one party

41.8 Prohibition of assignment without consent—refusal or consent not to be unreasonably withheld

41.9 Corporate re-organisation

42.1 Sub-contracting in general

42.2 Drafting points—sub-contracting

43.1 Usual types of parent company guarantee

44.1 General implications of ‘joint and several’ liability

44.2 Use of ‘joint and several’ liability clauses

44.3 Drafting points—joint and several liability

45.1 ‘No partnership’ etc clauses

45.2 Existence of partnership

45.3 Existence of agency etc

45.4 Drafting points—no partnership or agency clause

46.1 Absolute and qualified obligations distinguished

46.2 Obligations under a ‘best endeavours’ clause

46.3 All reasonable endeavours

46.4 ‘Best endeavours’ versus ‘reasonable endeavours’

46.5 Endeavours undertaking—drafting implications

47.1 Introduction

47.2 Modern practice

48.1 Warranties in general

48.2 Standard warranties as to due capacity and good standing

48.3 Terms and conditions of warranties

48.4 ‘Knowledge’ warranties

48.5 Drafting points—warranties

49.1 Different meanings of ‘capacity’

49.2 Use in attestation or execution clauses

49.3 Use of warranties

49.4 Use of boilerplate clauses to indicate authority

49.5 Drafting points—authority of company signatories

50.1 Use of disclaimers

50.2 Disclaimers distinguished from exemption clauses

51.1 Indemnity clauses

51.2.1 Legal proceedings

51.2.2 Conduct of proceedings

51.2.3 Sub-buyers

51.2.4 Franchisee’s indemnity

51.3 Drafting points—indemnities

51.4 Indemnity and ‘holding harmless’

52.1 Nature of ‘insurance’ clauses

52.2 The view of the insurers

52.3 Drafting points—insurance clause

53.1 Nature of ‘deposits’

53.2 Deposit and part payment distinguished

53.3 Case law on deposits

53.4 Drafting points—deposit clauses

54.1 Payment obligations in general

54.2 Interest

54.3 Currency

54.4 Drafting points—currency

54.5 Indexation

54.6 Net sales price (or net invoice price)

55.1 Inspection of records

55.2 Records and inspections

55.3 Drafting points—auditing, inspection and record-keeping clauses

56.1 ‘Of the essence’

56.2 Whether time is of the essence

56.3 Clauses making time of essence

57.1 Set-off

57.2 Court rules

57.3 Express right of set-off

57.4 Extending right of set-off

57.5 No right of set-off

58.1 Background to retention of title

58.2 Principle of retention of title

58.3 Retention of title clauses

58.4 Summary of retention of title

59.1 When title and risk pass

59.2 Title and risk in sales with international element

60.1 Value of intellectual property

60.2 Meaning of ‘intellectual property’

60.3 Defining ‘intellectual property’

60.4 Warranties as to validity of intellectual property rights

60.5 Drafting points—intellectual property

61.1 Confidential information

61.2 Issues to be addressed

61.3 Confidentiality and the Freedom of Information Act 2000

62.1 Introduction to consultation

62.2 Consultation and consent distinguished

62.3 Requirements for consultation

62.4 Drafting points—consultation

63.1 Control of announcements

63.2 Drafting issues—announcements

63.3 Agreed press release

64.1 Purpose of reporting clause

64.2 Drafting points—reporting clause

65.1 VAT

65.2 VAT clauses

65.3 VAT—transfer of a going concern

65.4 VAT— transfer of going concern involving land or buildings

65.5 Other taxes

66.1 Costs and expenses

66.2 Expenses

66.3.1 Background to stamp duty

66.3.2 When is stamp duty payable?

66.3.3 Instances when stamp duty will be payable

66.3.4 Intellectual property

66.4 Stamp Duty Land Tax (‘SDLT’)

67.1 Use of certificate of value

67.2 Form of certificate of value

68.1 Charges generally

68.2 Clause to prevent charge over payments or assets

68.3 Drafting points—charges

69.1 Types of acknowledgment

69.2 Use of acknowledgments

69.3 Acknowledgments and warranties

70.1 Bribery Act 2010

70.10 Reach of the Bribery Act 2010

70.11 Situations where the Bribery Act 2010 applies

70.2 Offences created by the Bribery Act 2010

70.3 Offence of bribing another person—active bribery

70.4 Offences related to being bribed—passive bribery

70.5 Bribery of foreign public officials

70.6 Relevant activities and functions

70.7 Improper performance

70.8 Liability of directors and managers where organisation commits bribery offence

70.9.1 Associated persons

70.9.2 Defence

71.1 Operative clauses

72.1 Purpose of ancillary agreements

73.1 Background to the Contracts (Rights of Third Parties) Act 1999

73.10 Remedies given to third parties

73.11 Defences of contracting party (as promisor) to third party action

73.12 Exceptions to application of the Contracts (Rights of Third Parties) Act 1999 to third parties

73.13 Arbitration

73.14 Exclusion or variation of third party’s rights

73.15 Third party rights distinct from the Contracts (Rights of Third Parties Act) 1999

73.16 Limitation periods

73.17 Third party not to be treated as party to the contract for purposes of other Acts

73.18 Double recovery

73.19 Application of the Contracts (Rights of Third Parties) Act 1999 in the United Kingdom

73.2 Changes to doctrine of privity of contract

73.20 Matters not affected by the Contracts (Rights of Third Parties) Act 1999

73.21 Effect of the Contracts (Rights of Third Parties) Act 1999

73.22 General wording of the Contracts (Rights of Third Parties) Act 1999

73.23 Checklist of matters to consider concerning third party when drafting agreement

73.24 Contracts (Rights of Third Parties) Act 1999

73.25 Insurance contracts

73.26 Amending or varying agreements made before the Contracts (Rights of Third Parties) Act 1999

73.27 Confidentiality agreements or confidentiality clauses

73.28 Licensing of technology and software

73.29 Consumer contracts

73.3 Exceptions to application of the Contracts (Right of Third Parties) Act 1999

73.30 Landlords and tenants

73.31 Indemnities

73.32 Payment to third party

73.33 Exclusion of liability

73.34 Settlement agreements

73.35 Solicitors and their clients

73.4 Who benefits from the Contracts (Rights of Third Parties) Act 1999?

73.5.1 Contract with contracting party that is part of international group of companies

73.5.2 Research contract between sponsoring company and university

73.5.3 Contract containing an indemnity

73.6 Issues for drafting

73.7 Aim of the Contracts (Rights of Third Parties) Act 1999; statutory right given to third parties

73.8 Definition of ‘third party’

73.9 Identifying the third party

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