Knowledge

At a time when heads of terms for leasing transactions are taking longer to get into an agreed format, and less time is left for putting a contract in place, there are four key areas where time spent at the heads of terms stage could save valuable time when the contract is being negotiated.

It is perhaps unsurprising in the current economic climate that there have been numerous cases before the Courts concerning the interpretation of contracts relating to land. As parties seek to interpret the contractual terms to their commercial advantage, the legal principles that apply to contracts for the sale or other disposition of interests in land have become the focus of judicial debate and commentary.  Two recent cases reveal the difficulties that can be faced when a dispute arises and the contract does not meet the criteria required by the legislation.

The maxim of ‘approbate and reprobate’ reflects the principle whereby a person cannot both approve and reject an instrument, often more commonly described as blowing hot and cold, or having one’s cake and eating it too.  It began life in Scots law as part of the general doctrine of homologation, and refers to the implied assent to an imperfect deed, contract or settlement, which is to be inferred from circumstance.  For further discussion on this, see Personal Bar, Reid and Blackie, 1st ed, 2006, para. 1-11.

The Energy Act 2011 deals with securing energy supplies and the regulation of renewable energy resources.  It also sets out the framework to facilitate the “Green Deal” to be launched, with the support of secondary legislation this coming Spring.  

In the recent case, Berrisford v Mexfield Housing Cooperative Limited [2011] UKSC 32, a seven judge decision from the Supreme Court relied on 16th century case law and a provision of the Law of Property Act 1925.  In the various summations, some interesting contractual scenarios were explored.  

When a landlord requires to terminate a lease because of a tenant’s failure to comply with its obligations under the lease, the landlord needs to follow the procedures for irritating leases set out in the Law Reform (Miscellaneous Provisions) (Scotland) Act 1985.  Compliance with the statutory provisions about the drafting and service of irritancy notices is essential, and the recent case of Stephen and Susan Scott v Graham Muir and Maureen Bain in Edinburgh Sheriff Court serves as a salutary reminder to landlords of the importance of strict observance of the statutory requirements.

In yet another case concerning holidays, the Supreme Court has handed down its decision in Russell and ors v Transocean International Resources Ltd and ors, confirming that the statutory holiday entitlement of offshore workers is satisfied by the provision of regular onshore ‘field breaks’.

In the current climate it is becoming increasingly common in sales and purchases of land for development to incorporate overage provisions, also known as “uplift” or “clawback” clauses – the purchaser pays an initial purchase price, and then potentially further sums are payable to the seller in the event that the property is transferred on for a profit.

The UK Supreme Court is the final civil court for cases in both Scotland, and England and Wales, and in matters of property law, the judges will find themselves having to consider what are often very different legal principles and regulations, depending on the jurisdiction. However, this knowledge of the law in the other jurisdiction can help to identify flaws in current laws or practice, and, in the recently decided case of Berrisford v Mexfield Housing Cooperative Limited [2011] UKSC 32, as well as relying on 16th century case law and a provision of the Law of Property Act 1925, the Supreme Court highlighted the different common law and legislative provisions under Scots Law, which, had they applied in England and Wales would have made their decision a lot easier.

The adoption of the Regulation on Energy Market Integrity and Transparency (REMIT) by the European Council on 10 October 2011, will for the first time ever, lead to the introduction of the regulation of wholesale energy trading taking place at an EU level.  REMIT will seek to prevent (and detect) market abuse (or more specifically, market manipulation and insider trading) in the wholesale energy sector.  As national regulatory authority (NRA) in the UK, Ofgem will have responsibility for enforcing the prohibitions in the UK.

Planning permissions must be implemented within strict time limits unless expressly agreed otherwise with the Planning Authority.  One symptom of these difficult economic times is that certain planning permissions may not be capable of being built out until the economy improves.  It seems sensible, therefore, to safeguard the planning permission by implementing the permission so that, in time, it can be fully built out.

Title to most properties in Scotland is subject to a variety of burdens and conditions that affect the things that the owner may and may not do at the property.  For example, a condition in the title may impose obligations on the owners to carry out certain operations, such as maintenance, or it might impose limitations on how that property can be used.  But a title condition that burdens a property is only of relevance if there is someone (or more than one) who has the right to enforce compliance of the burden.  This might be the owner of a neighbouring property, whose amenity the b

In Watson v University of Strathclyde, the EAT held that the inclusion of a particular member of staff on a panel to hear an appeal against a grievance amounted to a fundamental breach of contract, so that the employee who had brought the grievance was constructively dismissed.  The panel member in question was not personally involved in the grievance but was close to the subject of the grievance and had, in the past, expressed views about the subject of the complaint.

Contracts for the sale of land require to be in writing, and be signed by or on behalf of the parties to the contract.  A recently decided case in the Court of Appeal provides important clarification concerning execution of documents by companies.  The case between Roger Williams & Others and Redcard Limited & Others [2011] EWCA Civ 466 reached the Court of Appeal to settle the matter of whether a contract for the sale of land, which required to be signed by individuals and a company, had been properly executed in accordance with the legislation.  On dismissing the appeal,

The recent decision in the Scottish case of Co-operative Insurance Society Limited v Fife Council [2011] CSOH 76 has called into question the ability of Landlords to contract out of extraordinary repairs in FRI (tenant’s full repairing and insuring) commercial leases.

Commercial leases and the common law

The recent Scottish case of Morris v Rae [2011] CSIH 30 has been a timely reminder of the possibility of claiming damages for breach of warrandice, if you are evicted from all or even part of your land or buildings due to a defect or encumbrance on your title. Rights to claim, that might not have been enforced a few years ago, are now more likely, in the current economic climate, to be of greater importance, and it is useful to know what those rights are in case you find yourself in the position of receiving, or being able to make, a claim for breach of warrandice.

Generally when we purchase cars, home entertainment systems and other high value or complex goods, we do not expect there to be any faults in them, and in the unlikely event that problems do occur, we usually have a robust guarantee to call upon in order to get the problem resolved.  However, there appears to be an implicit acceptance that when you buy newly or recently constructed buildings, there will be defects and there is no guarantee that these will be resolved without significant expenditure by the owner.  Indeed, standard form construction contracts anticipate that there may be defe

The recent English case of MW Trustees Ltd and others v Telular Corporation [2011] EWHC 104 (Ch) examines the situation where a tenant does not serve a break option notice in accordance with the service provisions contained in the lease and the effect on the validity of that notice.
Background

In the case of RBS v Ashton, the Employment Appeal Tribunal (EAT) has confirmed that the test for determining whether an employer has complied with its duty to make reasonable adjustments is objective. The focus is on judging the reasonableness of the adjustment in question by considering its practical effect on the disadvantage suffered by the employee.  The reasonableness or otherwise of the employer’s thought process in determining whether or not to make a particular adjustment is irrelevant. 

The government and Ofgem have developed a regulatory framework to deliver the grid links from large offshore windfarms to the existing onshore National Grid network. This note comments on the impact of unbundling on the Offshore Transmission Owners (OFTOs) that will be appointed to carry out this role following competitive tender.

An employment tribunal has recently held that an employee on long-term sick leave and in receipt of PHI benefit was not entitled to payment for accrued but untaken statutory holiday for the duration of the sick leave on the termination of her employment (Souter v Royal College of Nursing Scotland (RCN)).
 

What are collateral warranties and why are they needed?
Collateral warranties have been a common feature of building and engineering projects for many years now, yet to many they remain a mystery.  There are many legal and commercial rationales for collateral warranties, which can be summarised as:

On 3 November 2010, the Institute of Chartered Accountants in England and Wales and the Institute of Chartered Accountants in Scotland published a revised joint guidance (TECH 02/10) on the determination of realised profits and losses for the purposes of making distributions under the Companies Act 2006 (the Act). 

On 1 September 2010 the FSA’s Document Viewing Facility (DVF) was replaced by an online facility, the National Storage Mechanism (NSM).
The NSM will store all information required to be disclosed under the Listing Rules, Disclosure and Transparency Rules and Prospectus Rules i.e. all information previously forwarded for publication on the DVF plus all regulatory announcements.