New Corporate Governance Code Welcomed

Government today welcomed new measures to encourage accountability, diversity and improved performance in Britain's boardrooms, as the Financial Reporting Council launched a revised Corporate Governance Code.
The new measures include a recommendation that all directors of FTSE 350 companies be put up for re-election every year and promote the benefits of diversity in new appointments to the board.
Business Minister Edward Davey said:
"Corporate accountability and transparency is integral to rebuilding public trust in the corporate sector and today's new Corporate Governance Code marks an important step towards rebuilding that trust. "
"Alongside the pledges this Government has made to encourage gender equality on the boards of listed companies, these new measures will help to encourage companies to play their part in working towards the creation of a more responsible, fair and transparent corporate society."
Equalities Minister Lynne Featherstone said:
"Half of all consumers are female but only 12 per cent of FTSE 100 directors are, so I'm pleased to see the FRC recognising the need to get more women into the boardroom. A more equal workplace is a more successful workplace and the stronger provision on gender diversity in the new Code is an important step towards building a fair and equal society by tackling discrimination at work."
The UK Corporate Governance Code sets out standards of governance for listed companies. Companies are required either to follow the Code or explain how else they are acting to promote good governance. The new edition of the Code will apply to financial years beginning on or after 29 June 2010.
Notes to editors:
The UK Corporate Governance Code, formerly known as the Combined Code, sets out standards of governance for listed companies. For further information please see the Financial Reporting Council's website.

A New Service for Hertfordshire Businesses

Dear All

My firm, like your business, is a member of the Hertfordshire Chamber of Commerce & Industry. I am pleased to tell you that we have recently accepted an invitation from the Chamber to become Patron Members. Since accepting the invitation we have considered how we might use Patron Membership for the benefit of businesses within the County.

We have resolved to extend our role as facilitators for businesses in Hertfordshire, in particular for those who are members of the Hertfordshire Chamber of Commerce. Although we continue to assist local business development in our usual ways, for example hosting breakfast meetings with topical speakers, we should like to offer something that your business might find useful in these difficult times. For an initial 3-month period we are offering a free consultancy service for Chamber Members who may need general advice relating to their businesses (which may not necessarily be legal advice) but are not sure whether they would benefit from it or where to find it. Our scheme enables you to meet with someone here (usually a Director) free-of-charge to discuss problem(s) that your business faces. Whilst we may not always be able to assist you ourselves we aim to point you in the right direction with a view to your alleviating those problems currently affecting your business. The Chamber has provided to us a list of professional and other advisors who might be able to assist (on a similar basis) with any problems that we identify with you at our meeting.

If you would like to book a free half hour appointment, please contact Georgina Meadows at our Hertford office on 01992 558411 or email her on georgina.meadows@breezeandwyles.co.uk. Please note that during the initial period the meeting will be held on a Thursday afternoon from 4.00 pm.For more information about our breakfast meetings, or to subscribe to our free monthly Employment Law Update "ezine", please visit our website www.breezeandwyles.co.uk. In addition feel free to visit our "Lonely Business Owner" blog available here

We look forward to helping you do business.

Yours sincerelyPeter Tunstill, Senior Partner

For and on behalf of

Breeze & Wyles Solicitors LLP

The Lonely Business Owner

Letter to the The Lonely Business Owner

At times like these when the business is as lean as is possible and you are barely breaking even you are probably spending most of your time working in your business rather than on it. Dealing with day to day micro-operational issues means that the problems aren't getting better you are the only person that can make the decisions and take the actions necessary to change the direction that the business is moving.

Every time you look up is the situation worsening?

Maybe it is so bad that you cannot see through the symptoms to the problems and as result no solution is possible. In circumstances like these the one thing that needs to be done is to get an objective opinion about the situation from an outsider.There will undoubtedly be a time when taking formal insolvency advice is the only course of action and indeed that may also be a safe place to start. However, we are seeing many business owners only turning for help when the situation is irretrievable and formal insolvency procedures the only option. The reality is that in most cases early action would have saved the business or created a better outcome.

Turnaround professionals tend to see crisis situations with requirements for crisis management where the options are severely limited. It would be better for the client if they had approached the professional earlier thereby increasing the options. An Insolvency Practitioner might very well say that they cannot help because this is not a situation appropriate for formal insolvency procedures. In those circumstances, perhaps an outside management consultant may be able to help enabling a costs effective business retention solution with minimal impact on the business and its reputation.

If you would like to have an objective discussion, please contact me or my team on 01279 715333 or brendan.obrien@breezeandwyles.co.uk.

Insolvency Group: Approach Purchase from Adminstrators with care

With the number of businesses considering formal insolvency procedures in the near future, one of those options is to purchase assets from an Insolvency Practitioner through the process of Administration. One of the reasons for the success of administration particularly in pre-packed administration is the risk to the purchasers. Perhaps more so when the purchaser has no link to the original company.

Purchasers must consider some of the following matters when considering purchasing from an Adminstrator:

1. In normal B2B business sales a seller will be required to give guarantees and warranties as to certains aspects of the business. Where an Adminstrator is selling due to that person lack of detailed knowledge of the company's business they will not give this statements about the business and indeed it would be unwise to do so;

2.As part of the normal sale process the sellers usually warrants or guarantees that the assets forming part of the business are wholly owned by that person and capable of being sold. An Administrator may not always be able to do this as in most cases the Administrator will only have limited information about the company

3.Where premises are involved in the sale the Adminstrator is unlikely to clear the buildings making them suitable for operation and the additional cost of so doing must be factored in. Indeed it is often the case that a new lease (if the property is leasehold) will need to be negotiated in a very short period of time.

4.Quite often an Administrator will be contrained by one of the creditors, usually one holding a security in the company's assets the ensure an optimum price. To ensure that this is capable of being achieved any company may have to pay a part of the premium over an extended period of time. This means that the new company's assets may be charged by way of a debenture.

5. When buying through the adminstration process the purchaser must be aware that the continuing business that they buy may be tainted by the insolvency of the previous company and should have in place novation agreements or at least have negotiated these in advance.

The sale out of adminstration is fraught with many traps, and despite the insolvent nature of the process (where little money exists) appropriate legal advice is essential.

Brendan O'Brien

Breeze & Wyles Cycling team come 2nd in Stortford 50K bike ride

A team consisting of Tom Berry, Stuart Pothecary and Brendan O'Brien came second in the Bishops Stortford 50k bike ride. With placing of 5th, 12th and 17th only one other team was able to get three riders in within the 17th place achieved by our team. Such times were extremely good given that there were over 120 people in the field.

Well done to Tom for his fifth place, not bad for a fourteen year old against club riders. His time of 1hr 34 mins was only 2 minutes outside the time of the winner.

Other times being

Stuart Pothecary 1 hr 52 mins
Brendan O'Brien 2 hr 1 min

Breeze & Wyles thanks Isabel Hospice, as organisers for a professionally run day which our team enjoyed immensely.

Property Group: Clarification on Amendment of Right to Buy Notices

At the Court of Appeal the court has dismissed and appeal relating to wrongly served section 125 Notices in relation to a 'right to buy' transaction (Nessa -v- London Borough of Tower Hamlets). Section 125 provides that once the right of the secure tenant to exercise the provisions for purchase the Landlord must then serve a notice within a period after such proof stating amongst other things the purchase price at which the landlord is willing to sell. The facts state that four such notices were served on the tenant split into two parts (one and three, two and four). The Local authority attempted to rely on the correct notices two and four whereas the tenants were relying on notices one and three. The difference in price was approximately £50,000.00.

At the court of first instance, the court held that

(1) the authority had no power to amend the original and incorrect notices; but
(2) could not sell at that market value as this would amount to ultra vires act (it seems ludicrous that a local authority could rely on its own negligence to run an unltra vires defence)

This court held that the tenant could not proceed on notices one and three and that three and four applied.

Each party appealed the decision. the tenant arguing that (2) was wrong and the Local Authority arguing that (1) was wrong.

The Court of appeal held that it could imply into the section 125 notice a power to amend or correct given the detailed information that was to be included.

Concerns

It is of concern to property practitioners that they cannot rely on notices served in these matters. Reliance on the notice must always be to the detriment of the tenant as they will make an application for a mortgage in mosts cases where the purchase price must be stated accurately.

The potential for a further notice to be served within the timeframe to completion puts the tenant and the tenant's conveyancer at a disadvantage as they must always look out for a new notice.

If there is one thing that the local authority should get right above all others in the notice is the purchase price. Why should the local authority be able to remedy its error when any practitioner will agree that the various notice regimes are a potential minefield of negligence. One has to ask what makes local authorities different?

HIPs suspended with immediate effect

In an important step at a point of fragile recovery in the housing market, Communities Secretary Eric Pickles and Housing Minister Grant Shapps today announced that with immediate effect, they are suspending the requirement for homeowners to provide a Home Information Pack (HIP) when selling their homes.

Mr Pickles today laid an Order suspending HIPs with immediate effect, pending primary legislation for a permanent abolition. The Secretary of State has taken this swift action in order to avoid uncertainty and prevent a slump in an already fragile housing market. Today's announcement sends a clear message of encouragement to people thinking of selling their home that they can put it on the market with less cost and hassle.

HIPs are currently holding back the housing market because sellers are having to fork-out extra cash, sometimes hundreds of pounds, just to be able to put their home up for sale. Suspending HIPs will reduce the cost of selling a home, remove a layer of regulation from the process and provide a welcome help to the housing market during the recovery. It will also mean a saving for consumers to the tune of £870m over ten years, giving sellers more money in their pocket to spend in the wider economy.

Mr Pickles and Mr Shapps also said that the Government is determined to help people reduce their energy bills, improve our energy security and tackle climate change by increasing the energy efficiency of their homes. Sellers will therefore still be required to commission, but won't need to have received, an EPC before marketing their property, and the Government will consider how the EPC can play its part in the new drive for a low carbon and eco-friendly economy.

Eric Pickles said:

"The expensive and unnecessary Home Information Pack has increased the cost and hassle of selling homes and is stifling a fragile housing market.

"That's why I am taking emergency action to suspend the HIP, bringing down the cost of selling a home and removing unnecessary regulation from the home buying process.

"This swift and decisive action will send a strong message to the fragile housing market and prevent uncertainty for both home sellers and buyers.

"HIPs are history. This action will encourage sellers back into the market, and help the market as a whole and the economy recover."

Today's move is part of delivering a key manifesto comment made by both parties in the new coalition Government. It will mean that sellers will no longer be told they have to buy a HIP before putting their home on the market, but they will now have the choice to provide one if they want to.

Housing Minister Grant Shapps said:

"This is a great example of how this new Government is getting straight down to work by cutting away pointless red-tape that is strangling the market. Rather than shelling out hundreds of pounds for nothing in return we're stripping away bureaucracy and letting home owners sell their properties.

"But we're also showing our commitment to a greener housing market by keeping Energy Performance Certificates and making them more relevant in helping buyers make informed decisions on the energy costs of their new home."

Nationalised Banks to provide Sub-prime mortgages: Rational thought?

It has been mooted from some in the financial services industry that the nationalised banks should provide sub-prime mortgages, not the least of whom is a wealth management firm of lawyers. Indiciations suggest that more than 1 million people in this country can now be classified as sub-prime borrowers. With the market for sub-prime mortgages almost negligible concerns are raised that these people have almost no access to funds.

Whilst providing information to the market is welcome, it is extremely unlikley that the current government could justify pushing tax payers money into risky lending scenarios. As we stand on the brink of some very tough decisions it is unlikely that the a government would with one hand take money from the public sector in the form of public sector spending restrictions and then proceed to gamble it at the expense of the tax payer. If there is one thing that this administration will be keen on is to spend money appropriately and prudently.

Rent in Administrations

In Goldacre (Offices) Limited -v- Nortel Networks Limited (in administration) [2009] EWHC 3389 (ch) the High Court held that where an adminstrator uses and part of leasehold premises for the outcome of the administration, rent due from the date of adminstration will become an administration expense under the terms of the leae and continue to as such for such period of time as the Adminstrator uses any part of the premises in the furtherance of the adminstration.

This does not mean that the rent for such period will be paid in full. Where there are claims ranking equally as expenses of the administration for full payment to be made the liquidated asset value must exceed the value of these claims before payment can be fully made.

The Employer Traps and Other tips

RIGHT TO APPEAL AGAINST DISCIPLINARY SANCTIONS

It has always been necessary to allow an employee to appeal against a disciplinary sanction, even if it is a verbal warning. Disciplinary sanctions include dismissal. We have come across instances recently where employers seem to be forgetting that they must allow employees to have a right of appeal, and this is particularly important if someone has been dismissed (other than by reason of redundancy). Make sure your disciplinary procedures include this ability.

DATA PROTECTION

Remember that failure to respond in time to a data request can render you liable to a fine. Also, wrongful processing of personal data can lead to a claim being brought against you as employer.
HOLIDAY

Remember that although as an employer you are obliged to give your employees paid holiday (subject to a statutory minimum), it is up to you to decide when an employee can take their holiday. Some employees seem to think that it is their right not only to have the holiday but to decide when they should take it. At this time of year it may not be a bad idea to remind your workforce that they would be sensible not to book holiday until such time as they have cleared it with the appropriate person to avoid disappointment (and argument).

New Anti-Slavery Laws

On 6th April 2010 new laws aimed at preventing the exploitation of vulnerable workers came into force. The new offence of holding another person in slavery or servitude, or requiring another person to perform forced or compulsory labour, carries a maximum penalty of 14 years in prison. The legislation is designed to protect vulnerable people such as migrant workers with little English, those unaware of their employment rights or those unable to report what is happening to them. For an employer to be liable there has to be a level of coercion or deception beyond that of a normal employment arrangement. Such factors may include a worker's passport being held by the employer; the worker being forced to live or remain in a particular area, perhaps in poor accommodation; the employer not paying agreed wages. The new offence is created by Section 71 of the Coroners and Justice Act 2009

Bribery Act - the basics

This received Royal Assent in April. Amongst other things, it creates several new offences carrying a maximum penalty of 10 years imprisonment or an unlimited fine for which employees, directors and commercial organisations can be liable. The offences will come into force at a date to be specified. The new offences will be:

· Bribing another person
· Being bribed
· Bribing a foreign official
· A commercial organisation failing to prevent bribery

Even if the actions in question take place abroad, they will constitute an offence if the person performing them is a British National, is ordinarily resident in the UK, is a body incorporated in the UK or is a Scottish Partnership. Given the potential for an unlimited fine or 10 years imprisonment, it is suggested that employers should undertake a comprehensive review of their exposure to bribery now so that they are in a position to review their practices when the Government issues guidance on what amounts to "adequate procedures": a commercial organisation will have a defence if it can show that it has "adequate procedures" in place to prevent the criminal conduct. More detail later.

AGE DISCRIMINATION AT COURT OF APPEAL

In a previous ezine we reported on the case of Chief Constable of West Yorkshire Police v Homer, which was the case where an employee argued that the requirement to have a law degree was age discriminatory, as he was too old by then to sit one and to achieve any benefit by it (he was 61). His claim at the Employment Tribunal was that the requirement to have a law degree was indirect age discrimination because his age prevented him from completing the degree before his retirement. The employer had won at the first appeal stage at the EAT and Mr Homer went on to appeal to the Court of Appeal. It rejected his appeal holding that, although he was at a disadvantage, in not having the time to enjoy the higher pay or status that would come from the promotion resulting from a law degree before retirement, this resulted from his age rather from age discrimination. Put simply, the only particular disadvantage suffered by Mr Homer's age group was the inability to obtain a law degree before retirement. This did not result from age discrimination but from his impending withdrawal (though retirement) from the workplace.

Religious Discrimination in Employment

In a case that attracted a lot of press attention in April, an employee of Relate was dismissed for refusing to counsel homosexuals about sexual matters. He refused to give acceptable assurances to his employer that he would comply with its equal opportunities policy and continue to work with same sex couples. He was dismissed and subsequently claimed for direct and indirect discrimination under the Employment Equality (Religion or Belief) Regulations 2003. The Employment Tribunal dismissed his claims, so did the Employment Appeal Tribunal, so he tried to appeal to the Court of Appeal but they refused permission for him to appeal. The case was a complicated one and Lord Carey, the previous Archbishop of Canterbury, also got involved. Very briefly, the reason his claims were rejected by the Tribunal and by the EAT were that it was not a question of his employer objecting to a particular belief that he held; rather, his employer was entitled to require him to comply with its aim of providing the service on a non-discriminatory basis. The Judge rejected the "irrational" idea that Christianity deserves special protection from law. Rather, the law protects the right to hold an express belief but does not, and should not, protect that belief's substance or content on the ground only that it is based on religious precepts. (McFarlane v Relate Avon Ltd)

UK Corporate: Company Documentation Due Diligence

Scenario: XYZ Limited goes to the bank to borrower for growth into a new area of business. The bank agrees in principle to lend money to the company. The Directors o the company, all of whom are focussed on the new project and lacking in a detailed understanding of their statutory obligations approach a lawyer when requested by the bank. What can they expect?

The doctrine of ultra vires has meant that a company could only do things that were authorised by the constitutional documents, for instance the memoranda and articles of association. Various governements over the years have attempted to dispose of the doctrine of 'ultra vires' the latest attempt creating an object 'general commercial company' introduced by s3A of the Companies Act 1985.

Where a company acts ultra vires the third party may be exposed to the risk that the ultra vires transaction is void. The effect of a void transaction with limited or no liability accruing against the company could have a damaging effect on the third party whose reliance on the void transaction may have a profound financial impact.

Previously (prior to October 2009), the bank would look at the objects of the company contained in the memoranda and ensure that (1) the company had the POWER to conduct the transaction, and (2) that the Directors had the AUTHORITY to action the creation and furtherance of the terms of the transaction. In our example the lender would need the comfort of legal advice confirming that the company had fulfilled these requirements before proceeding to complete the lending facility.

The Companies Act 2006 has, in effect, made the memoranda obsolete together with the objects. New companies are now formed without the need for the memoranda and as a result the objects. Provisions of the 2006 Act state that the company can do anything unless there are restrictions. Included in the Act are transitional provisions for older companies, the effect of which is to merge the terms of the memoranda into the articles.

Whilst the 2006 Act appears to sound the death-knell for the law on ultra vires, it is far from it. The 2006 Act allows for provisions that restrict the powers of the company, but rather than being contained in the memorandum this will be set out in the Articles, a somewhat more detailed document. Perhaps more importantly the focus seems to have changed from what the company can do to what it is restricted from doing. Whilst this might seem like pure semantics its relevance is felt throughout the business world for those prepared to consider each transaction carefully.

The impact of the Act on our scenario is that the lender will still need that legal opinion but this time the opinion will be produced by a slightly different process. The Lawyer will assess whether the company is prohibited from concluding the transaction.

The impact of the changes effected in the 2006 Act seem to provide no significant outward change in relation to ultra vires, although the process by which the opinion would be created will change. Beware: the lawyer without the necessary understanding of the constitutional changes of company documentation.

Government confirms HIPs will be scrapped!

The new Liberal-Conservative coalition government confirmed yesterday that it will be retaining energy performance certificates but scrapping Home Information Packs.

As you may imagine the commentary on this has been varied, HIP providers concerned at the lack of viabilities in their business and Corporate Estate Agent management reflecting the remainder of the property professsionals who state that the solution is better.

One note of caution has been raised by Paul Smith of SpicerHaart who has in effect stated that sound bite statements of this kind whilst welcomed are unhelpful. Do agents now need to sell properties with HIPS or not?

our recommendation is that it is business as usual until such time as legislation is passed changing the current circumstances.

Brendan O'Brien

Cautiously Positive Response to Revised GDP Figures

The GDP figures for the previous quarter have again been revised upward. This time from 0.2 % to 0.5%.

To a significant extent this has been driven by a weaker pound leading to greater competitivity in the global market place. However, the figures must be viewed with caution. Export led growth is dependent on demand for the products made in the UK together with a sustained period of a weaker pound.

The negative side of the news is that a weaker pound leads to UK inflation as imported raw materials become more expensive creating upward pressure on the cost of production.

During the period of the last 18 months where there has been a significant lack of positive news, it is important that this information is a positive outcome. Exporting business must try to make the most of the marginal competitiveness that the weaker pound gives them

Mortgage Repossessions (Protection of Tenants) Bill receives Royal Assent

Published 8 April 2010

The Mortgage Repossessions (Protection of Tenants) Bill has today received Royal Assent.

This Bill protects tenants when their landlords are repossessed by their lender. Where a landlord has not taken out a buy-to-let mortgage and has not received consent to let, the lender typically has no knowledge that the property has been let. The court is then unable to take account of the tenant's circumstances. Tenants often do not realise that possession proceedings have been commenced. This means they are unable to discuss their situation with those taking repossession action against their home.

Tenants can then find themselves with little or no time to find a new place to live. A recent impact assessment undertaken by this Department estimated that up to 330,000 households in England and Wales were at risk of short notice eviction if their home were repossessed due to their landlord not having lender 'consent to let'.
The new law allows judges to delay the repossession of a property by up to two months, to give tenants the time they need to find a new home. It has the backing of a wide variety of organisations including Shelter, Citizens Advice, the Chartered Institute of Housing, and the Royal Institution of Chartered Surveyors.
On the 8th April 2010 the Mortgage Repossession (Protection of Tenants) Bill received Royal Assent. This Bill provides there to be a two month delay in order to give tenants the time they need to find a new home. It is often the case that landlords let their properties to tenants without complying with the requirements under the landlord's mortgage conditions with their lender for consent to let the property. In these circumstances tenants do not know that this has occurred (and that their tenancy is therefore unlawful) and perhaps more importantly have no control over their eviction. In entering into the tenancy agreement the tenant believes that they have a certainty of occupation of the premises for the period of time granted under the tenancy together with any legal security of tenure that the type of tenancy that they have provides them.

This legislation has been created to allow the tenants a greater period of time in which to find alternative accommodation but has the legislation gone far enough. Given the lack of control and knowledge the tenants have where the landlord defaults on the terms of its mortgage by way of payment or otherwise the act does not give sufficient redress to the tenants in respect of the property to enable them to take the appropriate action. It is our view that the legislation could have provided for the mortgage lender to abide by the terms of the tenancy so long as the tenant continues to pay the rent provided for by the agreement. This would enable the mortgage company to collect the rent to offset against any payment default by the landlord but also to serve the appropriate notice on the tenant to terminate the agreement as if they were the landlord.

Changes to a Company's constitutional documents: 5 October 2009

The various provisions contained in the Companies Act 2006 have broadly been brought into effect. The last date for implementation was 5 October 2009.

In particular the rules relating to the constitutional documents previously known as the memorandum and articles of association have changed. New companies only have one constitutional document know as the Articles of Association whereas the older companies will have both.

in order to bring older companies into line with their newer sisters, section 28 of the Act provides transitional provisions. The effect of this section is to provide that the two documents are treated as one, the Articles of Association now incorporating the terms of the Memorandum.

This means that companies can continue without going through the formalities of change shortly after 5 october 2009. However, the impact of the Act must be borne in mind when alterations are made to the Articles of Association of a company created pre-October 2009.

If you have any doubts please contact me on 01279 715333 or at brendan.obrien@breezeandwyles.co.uk

Increase in Housing Act Rent: Changes under The Assured Tenancies (Amendment) (England) Order 2010

Since the introduction of The Housing Act 1988 all new tenancies from 15 January 1989 became assured or assured shorthold tenancies unless they came within one of the exceptions set out in Schedule 1 of the Act.

If the single annual rental threshold was more than £25,000 then the tenancy was exempt under Schedule 1 of the Act.

From 1 October 2010 under the above new legislation this will change from £25,000 to £100,000. This change affects England only.

The legislation will affect tenancies that are already in place before the 1 October and any that has a rent for more than £25,000 but less than £100,000 will automatically convert to an assured shorthold tenancy.

What does this mean for Landlords?

Firstly tenancy deposits will need to be protected in accordance with the Housing Act 2004 and Landlords will have to give two months notice under s21 Housing Act 1988 to terminate the tenancy.

There will be potential problems that will occur and it will be issues that the courts will have to decide. For example:

(a) If a tenancy ends shortly after 1 October there may not be enough time to serve a s21 notice or if a s21 notice was served before 1 October is it valid as technically the tenancy wasn't an assured shorthold until 1 October?
(b) If court proceedings are issued before the 1 October for breach but a hearing has not been set down until after 1 October could a Tenant argue that the appropriate notices haven't been served?

We would like to think that the courts will take a pragmatic view but until we see some cases go through the courts it would be wise to take advice on individual cases.

If you would like more information please do not hesitate to contact us here at the Hertford Branch.

Managing your sale force properly

This article is based upon the decision in BSkyB Limited and another -v- EDS LLC and another.

This is an extremely complicated case covering a significant period of time both in negotiation, during the contract and in subsequent litigation. BSKYB argued that EDS made fraudulent misrepresentations during the process of tender and negligent misrepresentations through the term of the contract. To this the courts concurred.

The contract between the parties contained a number of useful elements in large scale contracutal negotiation including step in, whole agreement clauses and limitations on damage.

Why is this relevant?

Due to the fraudulent misrepresentations made by the defendant the claimant, BSKYB was able to overturn both whole of agreement clause which seeks to exclude the negotiations and but perhaps more importantly the limitation on damage. Currently, the defendants are looking at potential damages in excess of £200m rather than the limit of £30m.

Conversations had in negotiation between the relevant negotiators of the parties created what was percived by the courts to be misrepresentations so serious that in relying on them the claimant was required to rely on information that the defendant knew or ought to have known was wrong. In so doing, the defendant has a contract upon which it could not rely.

Make sure that the sales force within your organisation are making accurate statements about your ability to deliver the contract and that they aren't over egging the qualification of themselves and those who may be involved in the contractual delivery.