WGS can advise on and draft commercial contracts for you. Why put things in writing? The simple answer is that if it is in writing
- The parties will focus their minds on the key issues and
- It is going to be a lot easier to enforce.
You can also include conditions precedent which provides that certain parts of the agreement will only come into force as and when certain conditions are met. Examples of condition precedent include specific consents or clearances which need to be obtained either from a third party source (for example local authority planning permission or the grant of a government export licence) or through the internal procedures of one of the parties.
Unlike many civil law jurisdictions and Australia English common law does not recognise any general duty to act in good faith when forming or performing contracts.
The introduction of EC legislation into English law has resulted in the concept of good faith finding a place within statute law therefore modifying the common law for example under the unfair terms in consumer contracts regulations 1999 and the commercial agents (council directive) regulations 1993
Best or reasonable endeavours
Many contracts require a party to achieve a particular objective or procure its achievement. If the obligation is not qualified it will amount to an unconditional undertaking by the relevant party that the objective will be achieved regardless of how onerous it is for that party to achieve it or even whether it is in that parties power to do so.
This is a useful tool to record exactly what consideration is being provided by the parties. There are limitations and exclusions. It is common for parties to try and exclude or limit their liability completely for breach of terms or to limit their liability to a particularly sum. For an exclusion clause to be effective the three key questions must be addressed
- Is the exclusion incorporated into the agreement
- Does the exclusion cover the breach in question (a question of interpretation)
- Is there any statutory restraint on the ability to exclude the term for example under the unfair contracts terms act.