extra stuff from SGS 17 and 22

Question 1

What they are looking for

Answer 1

• tabulation correct
• you can spot errors
• ACTIVE voice
• use of Defined Terms
• being able to explain clauses

Question 2

always consider:

Answer 2

WHO
WHAT
TO WHOM
HOW

Question 3

payment clause

Answer 3

“The Buyer shall pay the Seller the Purchase Price in cash for the X at Completion by bank transfer to the Seller’s Solicitor’s Bank Account”

and: “the Seller’s solicitors are irrevocably authorised and instructed to accept the Purchase Price on behalf of the Seller”

Question 4

If RC by Seller (and you want Buyer and Target to have benefit)

Answer 4

need to alter the Contracts (Rights of Third Parties) 1999 clause

• “Subject to clause X.2 below”

X.2 “The Target shall have the right to enforce the terms of clause [RC] expressed to be for its benefit as if it were a party to this agreement.”

Question 5

Seller’s Bank Account

Answer 5

means an account in the name of the seller with [name of bank, account number and sort code]

Question 6

interest rate payments

Answer 6

in payment paragraph - include rate and period

“The Buyer will pay interest on late payments at 2% above the base rate of X Bank PLC from time to time. Interest will accrue from the due date until the date payment is due”

Question 7

warranty

Answer 7

less important term not going to the substance of the contract

breach of warranty = allows other side to sue for damages (BUT must still perform its obligations under contract)

Question 8

condition

Answer 8

term that goes to the heart of the contract

Breach of condition = allows other side to treat itself as discharged from future obligations AND sue for damages

Question 9

parties stipulating a term is a warranty or condition

Answer 9

Parties can stipulate what consequences of breach of a given term will be but the label given will not be conclusive

In reality - court will decide remedy once it has assessed the importance of the term that has been breached after considering all relevant matters (look at context term is used in, not label given by parties)

Question 10

confidentiality boilerplate clause - what does it cover

Answer 10

clause usually covers:

• appropiate description of confidential information
• carve out allowing party to disclose confidential information if required by law, court order, or govenrment authority
• statement that confidentiality clause continues after termination of contract

Question 11

confidentiality - example

Answer 11

Each party undertakes it shall not at any time disclose to any person any confidential information concerning the business, customers, affairs, clients or suppliers of the other party except

To its employees, officers, representatives and advisors who need to know information to carry out the party’s obligations under this Agreement (and those people to whom party discloses confidential information to shall comply with this clause)

As my be required by law, court order or any government or regulatory authority

Question 12

entire agreement clause

Answer 12

Clause usually covers:

• Agreement contains entire and only statement
• No party has relied on any statement not included in the agreement
• Only remedy under the agreement is for breach of contract
• Nothing in the agreement limits or excludes liability for fraud

Question 13

restrictive covenants - what are they

Answer 13

undertakings by S not to do certain things

S is protected by it being:

• TIME limited
• possibly GEOGRAPHICALLY limited

Question 14

what is in the clause

Answer 14

• list RC
• make sure they are not more than is necessary (so court don’t deem it unreasonable + unenforceable)
• have a clause stating each undertaking shall be construed as separate and independent (if any is determined unenforceable in whole or in part, that unenforceability shall not affect the remaining undertakings

Question 15

examples of RC

Answer 15

• Not to be engaged or concerned or interests in the business of [ ]
• Not to solicit or endeavour to solicit the CUSTOM (i.e. customers) or EMPLOYEES from the Company

(Use ‘Key Customers’ and ‘Key Employees’ defined terms - more reasonable than all, and in defined terms say customers/employees listed in Schedule 1)

• Not to carry on business under a name or style including the words [ ] or any other name/combination of words capable of confusion
• Not to disclose to any person any information about customers or trade of the company or use its knowledge of customers/trade for the benefit of a business that intends to compete with the Company

Question 16

competition law defined terms

Answer 16

use precedent to define this

• say it includes national and directly effective legislation of any jurisdiction that governs the conduct of the companies or individuals
• for restrictive or anti-competitive agreements/practices
• examples: cartels, pricing, resale pricing

Question 17

warranties (as a clause)

Answer 17

• Seller undertakes warranties are true and accurate at date of agreement
• Seller acknowledges B enters agreement in full reliance on warranties
• Warranties shall not be extinguished/affected by Completion

Question 18

warranties (what should be in the clause - description)

Answer 18

• statements of fact made by the seller in relation to specific aspects of thing being sold
• if found untrue, B has contractual claim for breach of contract
• subject usual requirements of loss, mitigation, and foreseeability
• As well as contractual claim, warranties also force disclosure (in a disclosure letter) of anything that would otherwise amount to a breach of warranty

Question 19

s.43(1) CA 06

Answer 19

IF EXECUTION ON BEHALF OF A COMPANY (by any person acting under authority of company)

• used for agreement under hand (if deed, needs to be BY the company and delivered as deed - s.46)
• simple signature sufficient
• most commonly used

“Signed by X, for and on behalf of [ ]”

Question 20

S.44 CA 06

Answer 20

IF EXECUTION BY THE COMPANY

ways of doing it:

• affixing common seal
• signature of 2 authorised signatories
• by director in presence of witness who attest the signature

authorised signatory = director or CS

UNCOMMON for contracts under hand (bc can be done on behalf of the company - s.43(1))

Question 21

s.46 CA 06

Answer 21

DEEDS ARE ONLY VALIDLY EXECUTED IF

• BY the company
• delivered as a deed

Question 22

POWER OF ATTORNEY - what does it do

Answer 22

appoints a person as attorney who in P’s name or otherwise and on its behalf can

• consider, settle, approve, sign, execute, deliver and issue all agreements/docs, certificates/instruments whether by deed or not which Attorney considers to be desirable
• IN RELATION TO A SPECIFIC TRANSACTION (give details of it)
• allows attorney to negotiate variations/amendments [of a minor nature not material to the transaction]
• take any steps attorney considers desirable with implementation of the transaction

Question 23

clauses in power of attorney include:

Answer 23

• Ratification
• Validity
• Indemnity
• Jurisdiction
• Execution (As deed)
• delegation by corporate authority (if POA to company)
• authority of joint attorneys
• power by way of security

Question 24

POA - ratification

Answer 24

P undertakes to ratify and confirm whatever Attorney does in exercise of power under this power of attorney

Question 25

POA - validity

Answer 25

P declares that a person who deals with the Attorney in good faith can accept a written statement signed by Attorney to the effect that the power has not been revoked (this will be conclusive evidence

Question 26

POA - indemnity

Answer 26

P undertakes to indemnify Attorney against claims, losses, expenses

Question 27

POA - duration

Answer 27

Specifies when power of attorney expires (X months from today’s date)