Snapped at Vodka Revolution

The Cambridge Professionals Network lunchtime meeting on Friday, organised by McTear Williams & Wood, was well attended.  This may have had nothing to do with the fact that we were sponsoring it this time and that Paul made a short speech.   However, this didn’t seem to put off the other lawyers and sundry accountants, bankers, IFAs and insolvency practitioners present.  The free food helped too!   Paul’s topic was the value or otherwise of making plans for things.  He thought it went down reasonably well and at least extracted a nervous laugh from the audience by quoting Mike Tyson “It’s fine for you to make plans but just wait until I punch you in the mouth!”  A bonus was that we got our pictures in the paper. 

 

Stand and Deliver

Google are doing it, Facebook are doing it and now Dixon Phillips are doing it!

We’ve decided that we sit on our bottoms far too much in this office so we now have sitting-standing desks!  Some studies suggest that sitting for long periods increases your chances of developing diabetes, cardiovascular disease and blood clots or thrombosis. According to some reports, men who sit more than 6 hours a day have a 20% higher mortality rate and women who do so have a 40% higher mortality rate. So we are on our feet and looking forward to the benefits of standing up more, including increased energy, alertness and productivity, as well as burning more calories … which means, of course, we can eat more biscuits guilt free!

On his feet: Paul Dixon at our new sit-stand desk

Do your Terms and Conditions work for you?

Terms and conditions are not often a priority for businesses, whether it’s creating new Ts&Cs for a new company or reviewing existing Ts&Cs for an established company. 

Here are a few of the main areas to consider when preparing or reviewing your standard terms and conditions of business. 

Avoiding a battle of the forms

It is important to establish whose Ts&Cs apply at the point a contract is formed, particularly if your business depends on a series of repeat orders.

The last party to put forward its Ts&Cs, which were not explicitly rejected by the other side, will be incorporated into the contract. It is important to make sure your Ts&Cs are included in the contract process before the contract is formed and to be aware of any Ts&Cs sent by the other party with any counter offers which could then apply instead of your own.

Dealing with conflicting terms

Each business deal may be different and not every term of the Ts&Cs may be relevant. Some standard terms could conflict with any specially agreed terms for a particular deal giving rise to doubt on what was actually agreed.

When a contract comprises more than one document (an order form/invoice and standard Ts&Cs for example) it is important to check that key terms across the documents, such as services to be provided or timings, do not conflict and, if they do, to provide that any special terms agreed (which should be clearly set out on the order form/invoice) will override the relevant standard term.

Indemnity warning

Indemnities (a promise to pay a particular amount should a particular liability arise) are a serious contractual protection which should never be entered into without proper thought.

You should usually resist granting indemnities, but try to include them in your Ts&Cs to protect you if there is a particular issue of risk. If you have to give an indemnity, try to cap the level of liability or limit the particular circumstances and time periods in which it applies so that any potential liability is clear and limited.

Right of termination

Thought should be given to how a business can end a contract if the relationship with the other side breaks down or you simply no longer wish to do business with them. This point can be covered by a termination clause setting out the circumstances which would allow this to happen.

At The Races

 

 

I had the pleasure of joining these lovely ladies at Newmarket Racecourse this month for Ladies Day. The sun was shining, the Pimms flowing and the hats donned. We fancied a flutter but as none of us were seasoned gamblers we carefully selected our horses based predominantly on name and jersey! The lawyers of the group decided to bet on anything that slightly resembled the law and we were thrilled when TUPI crossed the line a nose ahead of the competition! Thank you to Price Bailey Legal Services LLP for the invite and a fabulous day out.

Michelle joins the equity

We’re extremely pleased to announce that Michelle Oliver (aka Michelle Atkins, since she got married last year!) has taken a stake in the firm.  She is now a shareholder, as well as a director, alongside us (Paul Dixon and Oliver Phillips.)

 Michelle has been with the firm nearly 5 years and become a key member of it, not only serving clients but also in a management role, in particular helping to develop Lauren’s skills and in maintaining the firm’s good reputation with other professionals and contacts.   She has bags of common sense as well as being responsible in large part for the positive, friendly and mutually supportive atmosphere in our office.

 …  We think she’ll be bringing a cake in soon.

 Paul and Oliver

Boring but important

New law on business insurance contracts was enacted this month and comes into force in August 2016.

The Insurance Act 2015 http://www.legislation.gov.uk/ukpga/2015/4/pdfs/ukpga_20150004_en.pdf improves the position for businesses.

Amongst other things, the Act includes provisions that:

1. will abolish clauses in insurance contracts which automatically convert prior information supplied to insurers into contractual warranties (i.e. actionable promises or assurances by the insured);

2. will abolish also any rule of law that a breach of warranty (express or implied) results in complete discharge of the insurer's liability;

3. if there is a breach of warranty, the insurer's liability should be suspended, rather than discharged, so that insurance coverage may be restored after a breach has been remedied; and

4. that no breach of contract should allow an insurer to refuse to pay a claim if the insured shows that the breach was completely irrelevant to the loss suffered.

... not all good if this new law is used by the insurance industry to justify a hike in premiums! However, it will make it harder for insurers to wriggle out of paying genuine claims.


Paul Dixon
26 February 2015

How can a tenant get out of a Commercial Lease?

Once you have entered into a lease of commercial premises, you are contractually bound to pay rent and outgoings, keep the premises in repair and comply with the other lease obligations until the end of the lease term. This is the case even if you move out and have no continuing use for the premises. So what can a tenant do in order to get out of the lease obligations?

The first thing is to consider the detailed terms of the lease, in particular any early break rights and those relating to assignment and subletting. Assuming no early break rights, the options available include:

- a negotiated surrender of the lease;
- assignment; or
- subletting.

A surrender is best if it can be achieved at manageable expense. The landlord may be happy to take the premises back to use himself or to relet but the tenant is still likely to have to pay a premium. Otherwise, the tenant needs to find someone else to take the premises over. The two main ways to do this are by assignment or by subletting.

Assignment

This is where a new tenant (the assignee) takes over the lease.

Typically, assignment requires landlord consent, not to be unreasonably withheld. The landlord is entitled to be satisfied that the assignee is suitable and able to pay the rent and may impose conditions to his consent. These may include a rent deposit being provided or personal guarantees (where the lease is assigned to a company).

Of most significance to the outgoing tenant, is the usual requirement of an Authorised Guarantee Agreement. This is a guarantee by the outgoing tenant to the landlord that the assignee will pay the rent and comply with the lease obligations. Although the assignee will be primarily liable to the landlord, the tenant will still have fall back liability until either the assignee has in turn assigned the lease to another new tenant or the lease term has ended.

Subletting (also known as Underletting)

Subletting is where a tenant grants a new, subsidiary lease to another tenant (sub-tenant). The original (head) lease remains in force and the tenant will have the same liability to pay rent and carry out repairs, etc but will in turn collect rent from the subtenant and (depending on the terms) be able, in effect, to pass on the other lease obligations.

Subletting is sometimes prohibited outright, even if assignment is not and will nearly always be subject again to landlord consent (not to be unreasonably withheld). Again, the landlord will have various requirements, particularly in relation to the sublease terms, which usually have to reflect the existing lease, and the landlord will expect its legal costs to be paid.