We wrote last week about the UK millionaire whose alleged deal reached in a pub was not upheld by the English courts (http://contractcanary.com/legal-update-pub-banter-lands-uk-millionaire-legal-trouble). Today we’re reporting on a million dollar napkin!
The case concerns two individuals involved in Alaska Dispatch News.
Tony Hopfinger, who headed the Alaska Dispatch News has alleges thatAlice Rogoff (the wife of a billionaire financier) (more…)
Mike Ashley the millionaire majority shareholder of clothing retailer Sports Direct was recently sued for an alleged deal he made in a pub with an associate called Jeffrey Blue. The court case concerned an alleged oral contract made between Ashley and Blue during an alcohol fuelled evening in a pub where Blue alleges to have reached an agreement with Ashley for a payment of £15,000,000 to Blue if he could get Sports Direct’s share price above £8 per share. (more…)
Contract variations are part and parcel of business relationships. Agreements evolve, requirements change. It’s important to be aware of how to vary a contract in order to facilitate these changes.
How Can You Vary A Contract?
You are able to vary a contract just like they are formed, be it verbally, in writing or by conduct. The first thing to check is whether your contract has a variation process included. If it does, that process should be followed. If that process is not followed case law has shown that it is highly likely the variation would still be legally valid.
Agreement or Deed?
If you need to vary an agreement, the next stage is to decide whether the variation should be in the form of an agreement or a deed. In order to answer this there needs to be an assessment of whether there is to be any ‘consideration’. But what is ‘consideration’? (more…)
In modern business speed is usually paramount with many transactions taking place incredibly quickly. This usually makes completing the formalities of a contract difficult or not possible and getting a contract signed is usually the thing which most businesses don’t complete.
Do I Need To Get A Contract Signed?
Getting the contract signed should always be your aim because there can be no dispute the contract and the terms have been agreed by both sides. However if you are unable to get the contract signed an agreement may still be binding but it leaves room for the other party to try and dispute this fact.
When Is An Unsigned Contract Binding?
If a contract is unsigned the courts will look at the conduct of the parties and if their conduct demonstrates that they have accepted the contract and are working to its terms they could be deemed to have accepted the contract by conduct. With this in mind, draft contracts can also be found to be binding if they are never agreed and the parties’ conduct appears to amount to an acceptance by both parties.
What Can I Do If I Can’t Get The Contract Signed?
Planning the end of the contractual relationship is something no party likes to talk about when entering in to a contract. Despite this, planning an exit may be necessary for a variety of reasons.
Termination could arise for a variety of reasons, such as a party breaching their obligations under the contract or ceasing trading or simply there being no need to carry on the contractual relationship. If the contract does not contain adequate provisions relating to termination, it could give rise to legal problems.
Types Of Termination
In every contract you enter in to you should ensure there are provisions allowing you to terminate the contract for convenience. This right will allow you to end the contract at any point for any reason. This can be used as a way to cap your risk where you have accepted a high amount of liability because if things go wrong you can always terminate and stop your total exposure increasing. This could be particularly helpful if you have no liability cap or a particularly high one. (see our Part 1 of our series on the importance of liability caps: http://contractcanary.com/contract-101-part-1-liability-caps (more…)
In our first instalment of Contract 101 we are going to give you a brief overview of liability caps and why they are one of if not the most important aspects of legal agreement for businesses. A contract without one would compare to sitting on the edge of a cliff with no harness!
What is a liability cap?
A liability cap limits the potential scope of a party’s liability under the contract. Its often linked to a fixed sum of money with this representing the most a person will have to pay under an agreement if they do something wrong.
Why are they so important?
Many clients pay no attention to how their liability is limited under their agreement. Most of the contracts we review have no such caps which mean our clients would be agreeing to unlimited liability and exposing their businesses to all kinds of risks! Whilst parties enter in to contracts with the best intentions there is always the possibility that the relationship will not work out. If you have failed to fulfil your duties under your agreement, a liability cap is key to knowing what your potential maximum liability will be under the agreement. This will allow you to plan for the maximum exposure your business could face under the agreement and also to potentially take out insurance to cover this liability as well.
I have a liability cap! Am I good to go?
Unfortunately not! This is where you really need to ensure your contracts are reviewed as a liability cap can take so many forms, for example it could cover only certain clauses in a contract so you may face unlimited exposure under the uncapped clauses. A well drafted liability cap can save your business thousands in lost revenue. A look at the recent case of McGee Group Ltd v Galliford Try Building Ltd demonstrates this. This case involves a claim by McGee Group for £3,318,124.29 due to Galliford failing to complete various works on time. As there was a well drafted clause in the agreement, the court held Galliford did not have to pay £3,318,124.29 to McGee Group but instead only had to pay 10% of the contract value meaning they saved a considerable amount of money.
Protect Your Business
Liability caps can make the difference between a business closing or surviving. Don’t put your business at risk, ensure you are protected. If you are worried about your contract, we are on hand to help. Our reasonably priced contract review packages will give you peace of mind and don’t forget our packages are based on number of pages not documents so you can upload more than one agreement for no additional cost! Click Here For Pricing: Contract Review Pricing