The Business > Resources > The Business: Legal Briefing 21 October 2013
The Business: Legal Briefing 21 October 2013

In this series of legal briefings I shall update you about recent developments in corporate or commercial law, some of which will hopefully resonate with some of you some of the time. I shall explain some of the context and background law, and perhaps give some specific tips. And maybe ramble or even rant a bit.

 

Guarantees: are they enforceable if your co-guarantors don’t all sign? Recent case

When banks ask for guarantees, their documents tend to be pretty watertight so they are hard to escape from. But did the bank here manage to slip up?

Many bank guarantee documents do still define a group of guarantors together as ‘the Guarantor’. Will they change the way these are worded after this case?

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Reading time (1-10 minutes): 3 minutes
Sophistication level (1 (idiot) – 10 (expert)): 5
Entertainment value (1 (turgid) – 10 (side-splitting)): 5

Importance of the expression ‘subject to contract’: recent case

This case involved a dispute over unpaid commission. Shortly before they were due to go to court, Sun Microsystems wrote to Mr Newbury offering to settle by paying him over £600,000 plus £180,000 for legal costs (oh to be a litigation solicitor...) within 14 days of him accepting. The letter went on to say that this settlement was to be ‘recorded in a suitably worded agreement’. Mr Newbury’s solicitors wrote to accept the same day. They also promised to send Sun a draft agreement to approve. But they never got round to agreeing all the terms of this draft agreement.

Mr Newbury’s solicitors asked the court to rule that there was already a binding contract even though a formal agreement hadn’t been signed.

WHAT DID THE COURT SAY?

Reading time (1-10 minutes): 3 minutes
Sophistication level (1 (idiot) – 10 (expert)): 4
Entertainment value (1 (turgid) – 10 (side-splitting)): 4

The importance of having well-worded exclusions and limitations of liability in your contracts: recent case

This case is a good reminder of the usefulness and effectiveness of having well-worded exclusions and limitations of liability in your contracts.

It also flags the point that it is perfectly possible and acceptable in contracts for supply of goods or services to set out time limitations on bringing claims under contracts. (Such time limitations are very common in the context of business sales, but are seen less often in other contracts.)

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Reading time (1-10 minutes): 8minutes
Sophistication level (1 (idiot) – 10 (expert)): 6
Entertainment value (1 (turgid) – 10 (side-splitting)): 4

All the best,

 

Andrew James

 
 
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Andrew James