Business Contracts Handbook by Boundy, Charles -- Read -- Imperial Library of Trantor

Index

Business Contracts Handbook

Contents Acknowledgements List of Abbreviations Glossary Preface

The Aim of This Book Sources of Law Background to This Book Scope of the Book How to Use This Book Limitations

PART I CREATING AND WRITING CONTRACTS CHAPTER 1 Contract Basics

Introduction

THE FRAMEWORK OF CONTRACT LAW

Common law What is a contract? Contract development

Contract Essentials

THE NEED FOR CONTRACTS TO BE IN WRITING

The general rule The use of e-mail

OFFER AND ACCEPTANCE (HAVE WE AGREED?)

Offer and ‘invitation to treat’ Acceptance

CERTAINTY (WHAT EXACTLY IS ON OFFER?)

Being precise Following through

CONSIDERATION (WHAT WILL IT COST?) INTENTION TO BE LEGALLY BOUND (DO I WANT TO BE COMMITTED?)

Offer, Acceptance and Certainty

AN EXAMPLE OF SIMPLE OFFER AND ACCEPTANCE THE EFFECT OF ACCEPTANCE ON DIFFERENT TERMS UNCERTAINTY

Is there a match or mismatch? Misrepresentation Being clear Evidence

THE USE OF IMPLIED TERMS

Consideration

CONSIDERATION AND VALUE SOMETHING FOR THE FUTURE GRATUITOUS PROMISES CONTRACT VARIATIONS SIGNATURE AS A DEED

The Need for Writing

CONTRACTS RELATING TO LAND THE TRANSFER OF INTELLECTUAL PROPERTY RIGHTS GUARANTEES

Evidenced in writing Consideration Indemnities and representations E-mail guarantees

CONSUMER CONTRACTS EMPLOYMENT CONTRACTS

Defective and Incomplete Contracts

DEFECTIVE CONTRACTS INCOMPLETE CONTRACTS CONTRACTS WITH CHILDREN

‘Subject to Contract’ and ‘Without Prejudice’

‘SUBJECT TO CONTRACT’ ‘WITHOUT PREJUDICE’ ‘SUBJECT TO CONTRACT’ AND ‘WITHOUT PREJUDICE’

‘Gentlemen’s Agreements’ and Business Misunderstandings

GENERAL STATEMENTS HANDSHAKE AGREEMENT TO AGREE/‘TO BE AGREED’ UNSIGNED AGREEMENTS AND COMPLEX NEGOTIATIONS

Unsigned drafts Fixed fee or quantum meruit

ESTOPPEL AND PART PERFORMANCE

Some Sample Cases

CARLILL V. CARBOLIC SMOKE BALL COMPANY (1893) FISHER V. BELL (1961) VHE CONSTRUCTION PLC V. ALFRED MCALPINE CONSTRUCTION LTD (1997) CONFETTI RECORDS V. WARNER MUSIC UK LTD (2003)

Background Decision

Summary and Checklist

CHAPTER 2 Reaching and Recording Agreement

Introduction Getting Started

WRITING IT DOWN

Putting it off No protection for lack of application

Negotiating Contracts by E-mail

A BUYER’S OFFER – AN EXAMPLE

A closer look

THE SELLER’S RESPONSE TO THE BUYER’S OFFER A SELLER’S OFFER THE BUYER’S RESPONSE TO THE SELLER’S OFFER

Analysing the offer What’s missing? The buyer’s response

THE SELLER’S COUNTER TO THE BUYER’S RESPONSE

The seller’s counter-response The importance of timing

THE BUYER’S REACTION

Decision time? Terms on websites

Structuring the Contract

NAMES AND DETAILS OF THE PARTIES

Who are you dealing with? Who is taking responsibility? Finances and reliability The individuals involved

INTRODUCTION (‘RECITALS’)

Recitals Using recitals effectively

DEFINITIONS

When to define a term Where to define a term

OPERATIVE CLAUSES TERM AND TERMINATION SCHEDULES OR APPENDICES? CONTRACT SIGNATURES

Simple signatures Signing on behalf of a party

SIGNING AS A DEED

Wording

The Language of Contracts

WHAT THE LAW SAYS THE PRINCIPLES OF ‘CONSTRUCTION’ LEGALESE INFORMAL LANGUAGE ARCHAIC LANGUAGE

Shall and will Hereunto, hereinbefore and the said Latin

UNNECESSARY LANGUAGE TECHNICAL, INDUSTRY OR COLLOQUIAL TERMS PUNCTUATION SENTENCE CONSTRUCTION CLAUSE NUMBERING

Numbering style Managing the numbering

PROVISOS AND OTHER CONDITIONS WORKED EXAMPLES ‘For the avoidance of doubt’

Example – a product sale agreement

Summary and Checklist

ESSENTIALS WRITING IT DOWN

Preparation Drafting Afterwards

CHAPTER 3 Planning More Complex Contracts

Introduction Planning the Deal Outlines

A pro forma ‘packing list’ contract planner

An example of the planner

THE ROLLING MEMORANDUM

Keeping track An aid to communication

ATTITUDES TO RISK

Assessing the risk Limiting the risk

Internal and External Teams

INVOLVING THE RIGHT PEOPLE INTERNALLY INVOLVING LAWYERS

When to use a lawyer The importance of a clear brief Being realistic The relationship with your lawyer Confidence and confidentiality Challenge Managing legal costs Specialization

Planning the Contract Documentation

SOME INITIAL CONSIDERATIONS

Type of transaction

SATISFYING CONDITIONS OR REQUIREMENTS

Conditions ‘Satisfactory’

MAKING ASSUMPTIONS (SEE ALSO ‘WARRANTIES’, P. 62 IN CHAPTER 4)

Due diligence (both ways)

THE ST ALBANS CASE – RISK, LOSS AND LIABILITY

Planning for Change

TOLERANCE FACTOR PEOPLE AND EVENTS CHANGE CONTROL CLAUSES A PRACTICAL EXAMPLE OF CHANGE

The background and intention What actually happened

PRICE CHANGES

Price changes in long-term contracts Legal implications Planning ahead; the short-term approach Planning ahead: the longer-term approach to price changes

PLAN FOR SUCCESS (AS WELL AS FOR RISK AND FAILURE)

What will happen if you succeed? The Cala Homes case Success and exclusivity

The Length and Complexity of Contracts

The 90:10 rule The packing list principle

Summary and Checklist

CHAPTER 4 Common Contract Terms and Clauses

Introduction Commonly Used Words and Phrases

REASONABLENESS

The reasonable person Alternative approaches

BEST/REASONABLE ENDEAVOURS

Case law on best endeavours Case law on reasonable endeavours Case law summary Endeavours and good faith Endeavours and absolute obligations Drafting ‘endeavours’ clauses

REASONABLE NOTICE GOOD FAITH ‘INCLUDING, BUT NOT LIMITED TO …’ OR ‘INCLUDING, WITHOUT LIMITATION …’

Key Common Clauses

LENGTH OF THE AGREEMENT RENEWAL NOTICE TO TERMINATE DATING (AND BACKDATING) AGREEMENTS TERM AND TERMINATION – DRAFTING POINTS

Start date Termination Examples of drafting termination dates

PAYMENT PROVISIONS AND CHARGING INTEREST

Being clear

POST-TERMINATION BREACH AND OTHER EARLY TERMINATION EVENTS (SEE ALSO CHAPTERS 6, 19 AND 20)

Examples (short-form clauses but covering the essentials)

DAMAGES – DRAFTING ISSUES (SEE ALSO CHAPTERS 7 AND 19)

Damages Genuine pre-estimate of loss Cumulative remedies

WARRANTIES AND INDEMNITIES DEFINED TERMS AND INTERPRETATION CLAUSES

Defining terms Location of the interpretation section

GROUPS OF COMPANIES (SEE ALSO CHAPTER 6) CHANGE OF CONTROL CLAUSE

Defining control

Boilerplate Clauses

ASSIGNMENT AND SUBCONTRACTING (SEE ALSO CHAPTER 18)

Assignment with consent

THIRD-PARTY RIGHTS

Privity of contract Inclusions and exclusions Practical steps

CONFIDENTIAL INFORMATION NOTICES

Notices in writing Keeping track Time for service

FORCE MAJEURE/ACT OF GOD

Continuing effects Drafting issues to look out for Force majeure and risk planning

ENTIRE AGREEMENT AND NO VARIATION CLAUSES COUNTERPARTS OTHER TYPICAL BOILERPLATE CLAUSES

No agency, partnership or joint venture Further assurance Illegality and severance No waiver Non-merger Choice of law/jurisdiction

Summary and Checklist

PART II KEY LEGAL ISSUES AFFECTING CONTRACTS CHAPTER 5 Confidentiality, Privacy and Data Protection

Introduction Confidentiality

THE OUTLINES OF LEGAL PROTECTION OF CONFIDENTIAL INFORMATION

The benefits of written agreement Loss of data Other parties

SOME OTHER CONFIDENTIALITY ISSUES

Sample Confidentiality Clause Non-disclosure Agreements (NDAs)

OUTLINES NDA CHECKLIST

Definitions The main issues Recipients Mutuality Restrictions (sometimes NDAs also contain restrictive covenants)

FORMS OF NDA

A sample short-form confidentiality letter An alternative form

Employee Restrictive Covenants Privacy

THE HUMAN RIGHTS ACT 1998 (HRA) HOW PROTECTION OF PRIVACY HAS DEVELOPED EQUALITY AND NON-DISCRIMINATION

The Data Protection Act 1998 (DPA)

DPA – THE BASIC PRINCIPLES SOME DATA PROTECTION DEFINITIONS WHAT DATA IS COVERED BY THE DPA? THE EIGHT PRINCIPLES OF DATA PROTECTION BUSINESS USE OF PERSONAL DATA COLLECTING PERSONAL DATA FROM A WEBSITE SECURITY OF PERSONAL INFORMATION TRANSFERRING DATA SUBJECT ACCESS REQUESTS COMPLIANCE PRIVACY AND ELECTRONIC COMMUNICATIONS REGULATIONS 2003 DATA RETENTION (EC DIRECTIVE) REGULATIONS 2009 REGULATION OF INVESTIGATORY POWERS ACT 2000 (RIPA)

Freedom of Information Act 2000 (FOIA) Summary

CHAPTER 6 Dealing with Companies and Partnerships

Introduction Main Types of Business Organization

UNLIMITED LIABILITY ORGANIZATIONS

Trading name Effect of unlimited liability Joint and several liability

LIMITED LIABILITY COMPANIES

The principles Owner-managers

LIMITED LIABILITY PARTNERSHIP (LLP)

A hybrid LLP basics The need to file accounts Joint and several liability avoided

No model constitution NOT-FOR-PROFIT ORGANIZATIONS

Companies and Contracts

COMPANY NAME AND NUMBER

Use of correct name Change of name Company searches

CONTRACTS WITH GROUP COMPANIES

The principles Practical steps

HOLDING AND SUBSIDIARY COMPANIES TAKEOVERS – AND HOW THEY AFFECT CONTRACTS

Financial Guarantees and Alternatives

NOTES

Directors’ Duties

DIRECTORS’ DUTIES – THE OUTLINES DIRECTORS’ DEALINGS – THE EFFECT ON CONTRACTS

The principles Diverting business and secret profits Anticipating insolvency Good faith dealings Abuse of powers Directors’ negligence Lifting the ‘corporate veil’

DIRECTORS’ AND COMPANIES’ CRIMINAL LIABILITY

Insolvency

TYPES OF CORPORATE INSOLVENCY

Receivership Administration Liquidation Company voluntary arrangement (CVA) Voluntary liquidation

INSOLVENCY CLAIMS THE EFFECT OF INSOLVENCY

Corporate revival Dealing with the company after insolvency

INSOLVENCY PROVISIONS IN CONTRACTS

Drafting considerations Termination or the right to terminate? Defining insolvency

RETENTION OF TITLE

The principle Types of ROT clause The effect of resales Drafting considerations

Summary and Checklist

CHAPTER 7 Risk, Exemption Clauses and Insurance

Introduction and Outline Damages and Recoverable Loss

THE PRINCIPLES – HADLEY V. BAXENDALE (1854)

Recoverable losses Special circumstances Variations to the test

THE IMPLICATIONS OF HADLEY V. BAXENDALE FOR EXEMPTION CLAUSES

Unfair Contract Terms

UNFAIR TERMS LEGISLATION NON-EXCLUDABLE RISKS LIMITED EXEMPTIONS LIABILITY FOR FRAUD THE UNFAIR CONTRACT TERMS ACT 1977 (UCTA)

Sellers and unfair terms Standard terms Reasonableness of exemption Exclusions

Related Contract Clauses Insurance in Relation to Contract Terms

SOME POLICY TERMS

Excess/deductible Event Utmost good faith

THE IMPACT OF INSURANCE ON CONTRACTS

Insurance review Subrogation Indemnities and insurance

UNDERTAKING TO INSURE

Covenants to insure

Negotiating Exemption Clauses

LESSONS FROM THE COMMON LAW APPROACH TO RISK AND EXEMPTION CLAUSES

Is the exemption properly incorporated in the contract? Strict interpretation Clauses construed against those seeking to rely on them Severance Blanket exemption clauses

SUGGESTED GENERAL APPROACH TACTICS IN ALLOCATING RISK

Identify main risks Risk management Special cases Allocating risks Agreed damages The impact of insurance

DRAFTING CONSIDERATIONS

Define the obligations first Obligations versus endeavours Precision Types of loss Be careful about using words like ‘including’ and ‘other’ Don’t go too wide Limiting direct loss

POSSIBLE OUTLINE OF A SUITABLE BASIC EXEMPTION CLAUSE

Pause and reflect

Entire Agreement Clauses

DRAFTING TIPS FOR ENTIRE AGREEMENT CLAUSES

Common general short-form entire agreement clause Suggested extended form

Some Selected Cases

ST ALBANS CITY AND DISTRICT COUNCIL V. INTERNATIONAL COMPUTERS LTD (1996) – LIMITATION CLAUSE HELD UNREASONABLE UNDER UCTA

Case Comment

WATFORD ELECTRONICS V. SANDERSON CFL LTD (2001) – EXEMPTION CLAUSE HELD REASONABLE AS RELATIVE EQUALITY OF BARGAINING POWER REGUS V. EPCOT SOLUTIONS (2008) – EXEMPTION CLAUSE HELD REASONABLE

Case The Regus exemption clause Comment

JACKSON V. RBS (2005) – REMOTENESS OF LOSS

Comment

HOTEL SERVICES V. HILTON INT. HOTELS (2000) – THE MEANING OF ‘CONSEQUENTIAL’ LOSS FERRYWAYS V. ASSOCIATED BRITISH PORTS (2008) – INDIRECT LOSS/REASONABLENESS OF EXEMPTION

Case Comment

THOMAS WITTER V. TBP INDUSTRIES (1996) – ENTIRE AGREEMENT CLAUSE PRINCIPLES INNTREPRENEUR PUB CO. LTD V. EAST CROWN LTD (2000) – ENTIRE AGREEMENT CLAUSE QUEST 4 FINANCE V. MAXFIELD (2007) – ENTIRE AGREEMENT CLAUSE INEFFECTIVE PEEKAY INTERMARK LTD V. AUSTRALIA AND NEW ZEALAND BANKING GROUP LTD (2006) – ENTIRE AGREEMENT CLAUSE UPHELD SIX CONTINENTS HOTELS V. EVENT HOTELS (2006) – GENERAL RELEASE AND COVENANT NOT TO SUE INTERNET BROADCASTING CORPORATION (T/A NETTV) V. MARR LLC (T/A MARHEDGE) (2009) – EXCLUSION CLAUSES AND DELIBERATE BREACHES OF CONTRACT

Summary and Checklist

CHECKLIST

CHAPTER 8 Restrictions and Competition Law

Introduction Restrictions and Restrictive Covenants: The Common Law Position

RESTRICTIONS IN AGREEMENTS

Is there a restriction? Mutual restrictions

EXCLUSIVITY

Sole and exclusive rights Defining the terms Informal arrangements

THE COMMON LAW APPROACH

Legal principles Planning

Key tests

Reasonableness of restrictions ‘True’ agency arrangements

DEALING WITH UNREASONABLE RESTRICTIONS

Deleting offending words Undertakings may be preferable to injunctions Injunctions and competition law

Competition Law

THE PRINCIPLES OF COMPETITION LAW

Form versus effect The objective of competition law

THE DANGER OF INFORMAL ANTI-COMPETITIVE PRACTICES THE OLD LAW EUROPEAN UNION AND UK COMPETITION LAW EXAMPLES OF POTENTIAL ANTI-COMPETITIVE PRACTICES THE INFORMATION YOU WILL NEED

Your business The business of the other parties to the planned contracts The proposed contracts/arrangements The relevant market The effect on the relevant market of the contract restrictions proposed

Anti-Competitive Behaviour (Article 81/UK Chapter I)

AGREEMENTS AND ARRANGEMENTS THE EUROPEAN ‘APPRECIABLE EFFECT’ TEST ‘TRUE’ AGENCY AGREEMENTS EXCLUDED

True agency Risk

VERTICAL AND HORIZONTAL AGREEMENTS

Consumer benefits Tacit agreement

AGREEMENTS OF MINOR IMPORTANCE

Small and medium-sized businesses (SMEs) NAOMI (the de minimis notice) The size of the business test The market share test Provisos Reviews

THE RELEVANT MARKET

Substitutability

INDIVIDUAL EXEMPTION UNDER ARTICLE 81(3) OR THE COMPETITION ACT

Individual exemption

Vertical Agreements

THE PRINCIPLES

Staying within an exemption

THE VERTICAL RESTRAINTS BLOCK EXEMPTION (VRBE)

Applicability

THE VERTICAL AGREEMENTS REGULATION (VAR)

What is covered by the VAR Connected parties Market-share tests Turnover test Intellectual property rights in vertical agreements Removal of exemption UK application

HARDCORE AND SEVERABLE RESTRICTIONS IN VERTICAL AGREEMENTS

Hardcore restrictions Hardcore terms in selective distribution systems Specifically excluded restrictions

ACTIVE AND PASSIVE SALES AND THE INTERNET THE TECHNOLOGY TRANSFER BLOCK EXEMPTION (TTBE)

Protection for monopoly rights Limited application Market-share test

THE EFFECT ON COMPETITION

Benefits to consumers Length of restrictions

Horizontal Agreements (Dealings with Competitors)

CONSUMER HARM OBJECT OR EFFECT? SHARING COMMERCIAL INFORMATION

Abuse of a Dominant Position (Article 82/UK Chapter II)

DOMINANCE

No exemptions

KEEPING CONTROL

Practical Issues Relating to Potential Anti-competitive Arrangements

NO-CHALLENGE CLAUSES THE PENALTIES FOR BREACH OF COMPETITION LAW

Criminal penalties

Competition Law Checklist

ANTI-COMPETITIVE BEHAVIOUR

Drafting Contracts Business dealings Avoidance techniques

DOMINANCE

Avoidance techniques

COMPETITION LAW TESTS

General questions Agreements of minor importance (NAOMI) Vertical agreements exemption Dominant position No exemptions

PART III CONTRACTS FOR SALES AND SERVICES CHAPTER 9 Sales of Goods – Implied Terms and Standard Terms of Business

Introduction The Legal Framework

COMMON LAW AND LEGISLATION

No UK commercial code Regulating unfairness

EUROPEAN LAW TERMS IMPLIED BY STATUTE OR REGULATION REGULATORY AUTHORITIES WHAT ARE GOODS?

Goods defined Consumer sales

Terms and Conditions of Business

A SHORT-FORM SET OF TERMS OF BUSINESS (FOR BUSINESS TO BUSINESS SALES)

Detailed Review of Sample Terms of Business

1 APPLICABILITY OF TERMS AND IDENTIFYING THE PRODUCTS

Incorporation into the contract Unfair terms

1 PRODUCTS – IDENTIFYING THE GOODS AND COMPLIANCE WITH DESCRIPTION

Special requirements Sale by description

2 DELIVERY AND ACCEPTANCE

Time and place of delivery Delivery dates Time of the essence Post-delivery inspection Rejecting goods

3 PRICE AND PAYMENT

Price increases Price decreases Time of payment Commercial payment terms

4 THE PASSING OF RISK 5 TITLE (OWNERSHIP IN THE GOODS)

Warranty of title Retention of title

6 DEFECTS (QUALITY AND FITNESS FOR PURPOSE)

Satisfactory quality Fitness for purpose

7/8 REMEDIES AND LIABILITY 9 INSOLVENCY 10 GENERAL

Some Other Sale of Goods Issues

SPECIFIC AND UNASCERTAINED GOODS

Selecting goods Theft of goods

SALE BY SAMPLE (SGA S. 15) BAILMENT BRINGING/INCORPORATING THE TERMS INTO THE CONTRACT COURSE OF DEALINGS THE BATTLE OF THE FORMS

Joint Supply of Goods and Services

SUPPLY OF GOODS ELEMENT SUPPLY OF SERVICES ELEMENT AN EXAMPLE OF A MIXED SALE OF GOODS AND SERVICE CONTRACT

Contract Analysis

Summary and Checklist

OUTLINE SELLER’S CHECKLIST

CHAPTER 10 Sales to Consumers and Website Sales

Introduction: Consumer Protection, the Web Revolution and Some Related Issues

NEGLIGENCE

Consumer Protection: Main Principles and Objectives

Consolidation SAFETY SELF-HELP ELECTRONIC OFFER AND ACCEPTANCE

Terms of business Offer and acceptance Consideration

BUYING ON THE WEB – THE E-COMMERCE REGULATIONS

The Unfair Terms in Consumer Contracts Regulations 1999 (UTCCR)

THE UTCCR – THE FRAMEWORK

Consumers Standard terms Products Excluded contracts

UNFAIRNESS – THE KEY UTCCR TESTS

Overall balance Language and small print Good faith

THE SCHEDULE 2 LIST –TERMS LIKELY TO BE UNFAIR EXCLUSIONS, EXCEPTIONS AND OTHER ISSUES

Exclusions Exceptions Enforceability

OFT

Consumer Direct

The Consumer Protection from Unfair Trading Regulations 2008 (CPRs)

OUTLINE

Major change Consolidation

OBJECTIVE AND DEFINITIONS

Commercial practice Unfair commercial practice

CPRs IN MORE DETAIL

New concepts Average consumer

Vulnerable consumers MISLEADING PRACTICES UNDER THE CPRs

Misleading commercial practice False information Misleading omission Examples

THE EFFECTS OF BREACHING THE CONSUMER PROTECTION REGULATIONS

Defences Complaints Sanctions Summary

Defective Products and the Consumer Protection Act 1987 (CPA)

PART I CPA – DEFECTIVE PRODUCTS

Right to compensation

PART II CPA – PRODUCT SAFETY PART III CPA – TRADING RULES PRACTICAL PRODUCT SAFETY LIABILITY MEASURES

Other Sales, Advertising and Marketing Regulations

DISTANCE AND HOME SELLING REGULATIONS

The Consumer Protection (Distance Selling) Regulations 2000 The Cancellation of Contracts Made in a Consumer’s Home or Place of Work etc Regulations 2008

BUSINESS PROTECTION FROM MISLEADING MARKETING REGULATIONS 2008 (BPRS) PRICE STATEMENTS AND CODES OF PRACTICE TRADING DISCLOSURES OF COMPANY DETAILS PRIVACY AND ELECTRONIC COMMUNICATIONS REGULATIONS 2003

Website Terms and Conditions: An Outline

GENERAL CONDITIONS OF USE ORDERING FROM A WEBSITE PRODUCT INSTRUCTIONS AND WARNINGS

Price and payment Delivery Risk and title Cancellation and returns

Data protection

Summary and Checklist

CHAPTER 11 Agency and Distribution Contracts

Introduction Representatives

Vicarious liability Authority

Agency and Distribution: The Main Distinctions

CUSTOMERS TITLE TO GOODS RESALE PRICING AND PAYMENT

Resale prices Customer creditworthiness and risk

DIFFERENT KINDS OF AGENT AUTHORITY AND OBLIGATIONS OF AN AGENT

Commission

PROTECTION FOR THE COMMERCIAL AGENT

The Commercial Agents Regulations

WHO IS A COMMERCIAL AGENT FOR THE PURPOSES OF THE REGULATIONS? WHAT MAIN DUTIES ARISE? WHAT ABOUT COMMISSION PAYMENTS? WHAT HAPPENS ON TERMINATION OF A COMMERCIAL AGENCY? GOODWILL OR TERMINATION PAYMENTS

The choice The calculation Compensation or indemnity Timing

THE COMMERCIAL AGENTS REGULATIONS – THE INTERNATIONAL ASPECT

Agency and Distribution Contracts: The Main Terms

TERMINATION AND EFFECTS OF TERMINATION EMPLOYEE TRANSFER REGULATIONS

Will TUPE apply? Planning ahead

Competition Law Issues

AGENCY AGREEMENTS AND COMPETITION LAW

Further issues Dominance Planning

THE VERTICAL AGREEMENTS EXEMPTION

Territorial restrictions for resales Active sales and wholesales

NON-COMPETE CLAUSES

Summary: Distributor or Agent?

PRICES AND PAYMENT CUSTOMERS TERMINATION COMPETITION LAW

Summary and Checklist

CHAPTER 12 Contracts for Services

Introduction Statutory Protection in Relation to the Supply of Services

REASONABLE CARE AND SKILL REASONABLE CHARGE UNFAIR TERMS RULES

Freelance and Consultancy Services

CONSULTANTS AND COMPANY DIRECTORS CONSULTANCY DISTINGUISHED FROM EMPLOYMENT

Service contract – or contract for services? Tax implications

TESTS OF EMPLOYMENT

Indicators Other implications

A Sample Letter-form Consultancy Agreement

COMMENT ON THE EXAMPLE

Williams’ view Chambers’ view

Corporate Consultancies

Limited companies The contractual position Personal liability PERSONAL GUARANTEES OF A COMPANY’S SERVICE OBLIGATIONS

Terms of Business for Services

A SAMPLE CLIENT LETTER

Other Issues in Contracts for Services

ASSIGNMENT AND SUBCONTRACTING TERM AND TERMINATION RESTRICTIONS AFTER TERMINATION

Protecting the team The choices Other scenarios

Summary and Checklist

PART IV TECHNICAL CONTRACTS CHAPTER 13 Outsourcing Agreements

Introduction Some Key Features of Outsourcing Agreements

THE FRAMEWORK FLEXIBILITY RISK JUMPING THE GUN

Term and Termination of the Outsourcing Agreement

TERM TERMINATION AND ITS EFFECTS TERMINATION FOR BREACH EARLY TERMINATION PARTIAL TERMINATION TRANSITIONING

Selecting a Service Provider

DUE DILIGENCE COMPETITIVE PROCUREMENT INDIVIDUAL NEGOTIATION TIMETABLE/IMPLEMENTATION PLAN

The Implementation Process

CONFIDENTIALITY PLANNING MILESTONES MIGRATION AND INTEGRATION HANDOVER

Service Quality Standards Intellectual Property (IP) and Information Technology (IT) Aspects of Outsourcing TUPE and Other Employment Law Implications of Outsourcing

TUPE – AN OVERVIEW FOR OUTSOURCING PROJECTS

Suspend disbelief Incoming and outgoing The principles Informing and consulting employees Redundancies Pooling

TUPE – A SUMMARY OF THE MAIN IMPLICATIONS WILL TUPE APPLY? A QUICK TEST WILL TUPE APPLY? THE FORMAL TUPE TESTS

General test The ‘business transfer’ test The ‘service provision change’ test No escape The rough and the smooth

TUPE – THE COST IMPLICATIONS ASSESSING THE RISK AND COST IMPLICATIONS

Assumptions Checklist for the provider (or client/new provider on a re-transfer)

TUPE PLANNING – WARRANTIES AND INDEMNITIES

Due diligence Allocating the TUPE risk Preparing the ground

OTHER EMPLOYMENT ASPECTS OF OUTSOURCING

Changing and enforcing employment terms Restrictive covenants Employees and service levels

Some Other Outsourcing Points to Consider Summary and Checklist

THE SERVICE PROVIDER IMPLEMENTATION SERVICE LEVELS INTELLECTUAL PROPERTY TUPE AND EMPLOYEE ISSUES

CHAPTER 14 Intellectual Property and IP Contracts

Introduction Patents: An Outline

THE PRINCIPLE NOVELTY BUYING AND SELLING PATENTS

Trademarks

REGISTERED TRADEMARKS CTM

TM and ®

UNREGISTERED TRADEMARKS

Passing-off Image management

TRADEMARK CHECKS DOMAIN NAMES TRADEMARK ASSIGNMENTS AND LICENCES TRADEMARK INFRINGEMENT

COPYRIGHT OUTLINES COMMERCIAL EXPLOITATION OF COPYRIGHT WORKS INFRINGEMENT OF COPYRIGHT ACTS NOT INFRINGING COPYRIGHT JOINTLY OWNED COPYRIGHTS THE COPYRIGHT SYMBOL MORAL RIGHTS DATABASE RIGHTS

Know-how Intellectual Property Contracts

IP LICENCES – A TYPICAL STRUCTURE

Differences Exclusivity Minimum targets

TRADEMARK LICENCES ASSIGNMENT OF COPYRIGHT (SEE ALSO CHAPTER 18) COPYRIGHT PERMISSIONS (CONSENT TO USE AN EXTRACT FROM A WORK) COPYRIGHT LICENCES

Form of publication Territory and language Term Delivery and timing Consents Financial terms Warranties and indemnities

Franchises and Franchise Agreements

FRANCHISING AND PYRAMID SELLING FRANCHISING – AN OUTLINE THE BENEFITS AND CHALLENGES OF FRANCHISING

Summary and Checklist

IP RIGHTS IP CONTRACTS

CHAPTER 15 Technology Contracts

Introduction Types of Technology Contract Headline Issues in Technology Contracts

CONCEPT, DESIGN AND IP IN TECHNOLOGY

Ideas Designs Intellectual property ownership

DEFINING WHAT IS TO BE DELIVERED, WHEN AND HOW IT IS MEASURED

Specifications Schedules Acceptance When Use of the services

FINANCIAL CONSIDERATIONS

Cost Invoicing and payment

Jumping the Gun

A case in point

Planning ahead

IT Development Agreements: More Detailed Issues

SYSTEM DETAILS

Consistency Interfaces and integration

Software

LEGAL PROTECTION CHANGES PROPRIETARY SOFTWARE BESPOKE SOFTWARE OPEN-SOURCE SOFTWARE A COMBINED SYSTEM INDUSTRY SOFTWARE IDENTIFYING THE SYSTEM AND WHAT IT DOES – SOME KEY QUESTIONS

Drafting or Reviewing IT Agreements

THE PARTIES DEFINING THE DEVELOPMENT AND THE SYSTEM SCHEDULE/APPENDIX – THE SYSTEM/SOFTWARE SPECIFICATION DELIVERY, INSTALLATION AND TESTING

Installation Acceptance process Testing and commissioning What if testing proves unsuccessful?

TRAINING THE RIGHTS AND TERM GRANTED

Territory and purpose Exclusivity Licensed users Copies/back-ups and adaptations New releases and upgrades Intellectual property

PAYMENT ARRANGEMENTS

Acceptance process

TRANSFERABILITY

Client transfers Developer transfers

TERMINATION

Misuse Serious breach Payment failure What is terminated Sub-licences Escrow arrangements

WARRANTIES AND INDEMNITIES

The principles Mutual warranties Copyright warranty Software defects Indemnities and claims handling

LIMITATION OF LIABILITY (SEE ALSO CHAPTER 7) FORCE MAJEURE (SEE ALSO CHAPTERS 4 (‘COMMON CONTRACT TERMS’) AND 7 (‘NEGOTIATING EXEMPTION CLAUSES’)) CONFIDENTIALITY (SEE ALSO CHAPTER 5) BOILERPLATE CLAUSES (SEE ALSO CHAPTERS 4 AND 17)

Choice of law and jurisdiction clauses

Maintenance Agreements (see also Chapters 12 and 13)

Term and renewal of agreement Service levels Termination The source code

Summary

CHAPTER 16 Internet-related Contracts

Introduction

A MOVING TARGET WEBSITES ISPS TERMS USED IN THIS CHAPTER

Use and Misuse of the Internet: The Battle Lines

THE LIABILITY ISSUE THE E-COMMERCE DIRECTIVE AND THE ‘SAFE HARBOUR’ PROVISIONS

National variations Removal of offending material Personal action

SOCIAL AND CULTURAL ISSUES

Respect for copyright

DRM

End-user licence agreement (EULA) Alternative approaches

Liability for Internet Content

INCREASED RISK INTERNATIONAL REACH

User-generated content (UGC) Personal data

Common Features in Internet-related Contracts

ISP TERMS AND CONDITIONS WITH SUBSCRIBERS DOMAIN NAMES AND TERMS WEBSITE-BUILDING/DESIGN

Web links

WEB LINK OUTLINES WEB LINKS – BENEFITS AND RISKS LINKING AGREEMENTS

Content Licensing, Hosting and Reseller Agreements

CONTENT LICENSING AND HOSTING SAMPLE CONTENT LICENSING AGREEMENT CLAUSES

Definitions (examples only) Provision of content Permitted use and limitations Security measures Proprietary rights

WEBSITE RESELLER AND DISTRIBUTION AGREEMENTS

Other terms

Summary and Checklist

DEALINGS WITH ISPs IPRS AND CONTENT RISK RELATED CONTRACTS

PART V THE WIDER WORLD, CHANGES AND BREAKDOWNS CHAPTER 17 The International Dimension

Introduction The Laws of England, the UK and Overseas

EUROPE THE COMMONWEALTH THE UNITED STATES OF AMERICA

The Internet and International Law

SUBJECT AREAS AND LIKELY JURISDICTIONS

Choice of Law and Jurisdiction

THE MAIN ISSUES

Interrelation of law and jurisdiction Local advice

CONVENTIONS AND REGULATIONS

Principles Rome and Brussels The Hague

Choice of Law (Rome)

NON-CONTRACTUAL OBLIGATIONS

The principles

Jurisdiction Clauses

BRUSSELS I

The principles First to court Jurisdiction clauses

Other International Conventions

THE HAGUE CONVENTIONS UN CONVENTIONS OTHER CONVENTIONS

Practical Issues on Choice of Law and Jurisdiction

COURT APPROACHES

Conflict

DRAFTING AND NEGOTIATING CHOICE OF LAW AND JURISDICTION CLAUSES

Choice of language Jurisdiction clause Disputes on negotiating jurisdiction clauses Disputes on negotiating choice of law clauses Planning Drafting Other general considerations

Arbitration and Alternative Dispute Resolution

ARBITRATION OR EXPERT DETERMINATION ARBITRATION OR LITIGATION

Nature of issue Certainty Cost Privacy

ISSUES IN DRAFTING ARBITRATION CLAUSES

Choice of forum Other options

International Sale and Delivery Of Goods

Incoterms CMR conditions Bills of lading

Checklist for Drafting Contracts with an International Element

INTERNATIONAL ELEMENT CHOICE OF LAW (IF THERE IS A MATERIAL INTERNATIONAL ELEMENT) DISPUTE RESOLUTION

CHAPTER 18 Transfers, Changes and Problem Contracts

Introduction Transferring Contracts

THE GENERAL PRINCIPLES OF TRANSFER AND ASSIGNMENT

Assignment Form of assignment Subcontracting Sub-licensing

THE EFFECT OF BREACH OF RESTRICTIONS ON ASSIGNMENT OR SUBCONTRACTING

Consent to assign or subcontract

Change of Control, Variation and Novation

Handling a change of control: an object lesson Variation Novation

Assignment and Subcontracting: Practical Issues

PROBLEM CONTRACTS

Incomplete Contracts

WERE ALL THE KEY POINTS AGREED? VHE CONSTRUCTION PLC V. ALFRED MCALPINE CONSTRUCTION LTD (1997)

Background The decision The implications

IS THERE A CONTRACT? – AN OUTLINE CHECKLIST

Defective and Unenforceable Contracts

LEGAL DEFECTS

Signature defects Total failure of consideration Condition precedent No right to sell (you can’t give what you don’t have) Gifts Illegality/provisions contrary to public policy Gambling contracts and debts Contracts with those under age Corporate incapacity Actual and apparent authority

BEHAVIOURAL ISSUES

Fraud Duress Undue influence

MISTAKE IN CONTRACTS

Mistake as to identity (knowing who you are dealing with) Mistake as to the nature of the transaction Mistake as to content or commitment

CONTRACTS FOR THE BENEFIT OF THIRD PARTIES (SEE ALSO CHAPTER)

Disputed Terms: Is the Contract Correct?

THE ‘PAROL EVIDENCE’ RULE MISREPRESENTATION

Rescinding the contract

DECEIT COLLATERAL CONTRACTS RECTIFICATION

Changes by Actions After the Contract is Agreed

VARIATION, WAIVER, ESTOPPEL AND RELEASE – HAVE THE TERMS CHANGED?

Informal variation Waiver Estoppel Release Reversion Frustration Tax

REPUDIATION – REFUTING THE EXISTENCE OF THE CONTRACT

Summary and Checklist

TRANSFERS AND SUBCONTRACTS CHANGE OF CONTROL/VARIATION ETC INCOMPLETE, DEFECTIVE AND OTHER PROBLEM CONTRACTS

CHAPTER 19 Contract Disputes and Remedies

Introduction The Contract Review: Being Ahead of the Game

KNOWN CHANGES ACTING BEFORE THERE IS A DISPUTE WHAT’S GOING WRONG? SOME LIKELY PROBLEM AREAS PAYMENT PROBLEMS DELIVERY OR SERVICE PROBLEMS

Time of the essence Quality of goods Quality of services Dispute escalation clauses

RELATIONSHIP PROBLEMS EXTERNAL EVENTS

Legal Actions Open to an Unpaid Contract Party

WINDING-UP

Remedial Action

CONTRACTUAL ASPECTS

Check the contract first Limitation periods

BEHAVIOURAL ASPECTS PRACTICAL STEPS SETTLEMENT LEGAL REMEDIES LOOKING OUT FOR DEFENCES

Injunctions and Similar Orders

OBTAINING AN INJUNCTION OTHER TESTS FURTHER PROCEEDINGS

Damages

BREACH OF DUTY OF CARE LIQUIDATED DAMAGES DAMAGES FOR DISAPPOINTMENT OR DISTRESS MITIGATION OF LOSS ACCOUNT OF PROFITS INTEREST AND COSTS

Interest Costs Other costs

RECOVERING DAMAGES

Protective steps

Arbitration and Alternative Dispute Resolution

LITIGATION OR ARBITRATION? ADR

Quick tests

Economic Torts

UNLAWFUL CAUSATION OF LOSS INDUCING A BREACH OF CONTRACT

Summary and Checklist

CONTRACT PREPARATION AND REVIEW CLAIM AND COUNTER-CLAIM INJUNCTIONS AND SPECIFIC PERFORMANCE ARBITRATION, MEDIATION ETC

CHAPTER 20 Termination and Afterwards

Introduction No-Fault Termination

REASONABLE NOTICE DECIDING WHICH COURSE TO TAKE

To terminate or not to terminate?

NO-FAULT TERMINATION ON NOTICE – AN EXAMPLE

Termination for Breach

TERMINATING A CONTRACT

No express default clause Express default clause Comment on example Decided cases Quick tests

MATERIAL BREACHES AND MATERIAL TERMS

Material breaches

REASONABLE TIME AND TIME OF THE ESSENCE

Reasonable time Time of the essence

BEING CLEAR

Serving Termination Notices

SAMPLE NO-FAULT TERMINATION SAMPLE NOTICE REQUIRING BREACH TO BE REMEDIED TO AVOID TERMINATION

Other Grounds for Contract Termination

RESCISSION RESTITUTION REPUDIATION AN EXAMPLE OF REPUDIATION AND THE OPTIONS AVAILABLE

Implications of the choice

INSOLVENCY TERMINATION BY FRUSTRATION DEATH

Post mortem The estate

After Termination

CARRYING ON AS BEFORE POST-TERMINATION OBLIGATIONS

Some Dos and Don’ts Summary and Conclusion

DRAFTING ANALYSIS LITIGATION DON’T BE AN OSTRICH

Appendix A: Archaic Language and Suggested Alternatives Appendix B: Example (Short-form) Product Sale Agreement Appendix C: The Contract Planner/Rolling Memorandum Appendix D: Sample Trademark Licence Appendix E: Sample Technology Agreement Checklist

Scope of the Agreement Financials Rights granted and limitations Escrows Agreement

Stop Press!

Part 1: Creating and Writing Contracts Part 2: Key Legal Issues Affecting Contracts Part 3: Contracts for Sales and Services

Part 4: Technical contracts

Part 5: The Wider World, Changes and Breakdowns

List of Cases Cited List of Relevant Legislation Index

← Prev
Back
Next →

← Prev
Back
Next →