International

This Practice Note addresses identifying a fiduciary, fiduciary duties and obligations, the no conflict rule, the no profit rule, a fiduciary's duty of confidence, and the remedies available for breach of fiduciary duty. Who is a fiduciary? There is no definitive catalogue of relationships that give rise to fiduciary obligations at common law in every situation universally. Certain relationships are inherently fiduciary, eg trustee and beneficiary, solicitor and client, principal and agent, business partner and co-partners, together with mortgagor and mortgagee. The obligations of some fiduciaries have been set out in statute; for instance, trustees owe a statutory duty of skill and care under section 1 of the Trustee Act 2000 ( Tr A 2000), and directors' relationships with their companies are addressed in the Companies Act 2006 too. For guidance on directors' fiduciary duties, see Practice Note: of directors for further detailed...

This Practice Note addresses the relationships that arise among principals, agents, and the third parties with whom the agent transacts on the principal’s behalf. It reviews the principal’s exposure for its agent, the scope of an agent’s authority (including remedies for any excess or breach of authority), fraud and misrepresentation, and the concepts of disclosed and undisclosed principal. Principal’s liability for acts of agent A principal will generally be answerable for all acts carried out by an agent within the agent’s authority, whether liability sounds in contract or in tort. Authority encompasses the agent’s actual, apparent (ostensible), or usual (customary) authority. For further detail, see Practice Notes: Scope and authority of the agent and Forming enforceable contracts—agent’s authority to contract. An agent’s authority derives from the principal, and it should be recognised at the outset that the capacity to bind a principal in contract does not, of...

This Practice Note provides an overview of agency. It outlines the core features of the relationship between principal and agent, covering methods of appointing an agent to represent a principal, the various forms of appointment, and the scope of an agent’s authority to act for a principal. It also explains the extent and source of an agent’s power when acting for the principal. It identifies how appointments are made and the breadth of authority conferred in practice. Nature of agency Agency arises where a principal engages an agent to act in accordance with their instructions and for them, for defined objectives. In commercial settings, this typically involves introducing or finalising contracts between the principal and customers or other third parties. In practice, ‘agent’ is used loosely to describe, eg, distributors whose functions resemble those of agents, yet who are not agents in law......

This Practice Note sets out the respective rights and responsibilities of a principal and their agent, whether arising under law by implication or expressly contained within the agency agreement. It reviews the nature and status of an agent’s appointment and the fiduciary obligations an agent owes to the principal. It also outlines remedies for breach of duty, including actions for damages and for an account... General In business contexts, the rights and duties of principal and agent are usually captured in a written agency agreement. Where the agreement is silent, the law may imply additional obligations. Notably, the Commercial Agents ( Council Directive) Regulations 1993, SI 1993/3053, set out specific rules for commercial agents which, in most circumstances, cannot be excluded by contract. For issues concerning commercial agents, see Practice Notes: Commercial agency, Relationship of commercial agent and principal, and Termination of...

Appointing a receiver offers creditors and certain other parties a means to safeguard their interests in a company’s assets. This note outlines the available forms of receivership and the key consequences of a receiver being appointed. For access to materials within the Receivership subtopic, refer to: Receiverships—overview. The following features apply across all receivership types: A company does not have to be insolvent to enter receivership Other creditors may still pursue claims despite a receiver being appointed During the receivership, the company’s dealings with property covered by the appointment are curtailed Receivership does not automatically lead to liquidation (the winding up of its affairs) Further points specific to particular receivership forms are outlined below. Law of Property Act ( LPA)/fixed charge receiver Under the Law of Property Act 1925 ( LPA 1925), a mortgagee may appoint an LPA...

This Practice Note outlines the character and extent of an agent’s authority, bestowed by the principal, and recognises certain constraints and qualifications imposed upon that authority in practice. It reviews the varieties of an agent’s authority, such as actual, apparent and customary authority, and explains their operation. It also addresses authority conferred through a power of attorney arrangement. It examines the consequences of an agent exceeding its authority, whether such acts bind the principal in law, and the remedies open to a principal when an agent goes beyond its mandate, including options for redress. Authority of agent An agent’s authority derives solely from its own principal. In commercial contexts, the scope of authority principals grant to agents typically comprises one or more of these functions and activities: to introduce, conclude, or otherwise handle contracts between the principal and customers. An agent is not, of itself, empowered to bind a...

This Practice Note considers the events and circumstances that may bring an agency relationship to a close, and the implications of ending an agency for the parties involved. This Practice Note does not cover the consequences of bringing a commercial agency to an end; for that, see Practice Note: Termination of commercial agency. An agency may conclude by: agreement between the parties another act of the parties operation of law Termination by agreement or act of the parties The parties may end the agency by mutual consent, or either party may treat it as terminated because the other’s conduct amounts to repudiation (see Practice Notes: Termination and expiry of contracts and Repudiation of contract). Written agency agreements should specify any minimum terms and applicable notice periods, identify breaches that entitle termination, and include any particular provisions that apply after notice is served and once...

This Practice Note discusses the personal nature of an agency relationship and the circumstances in which the agent may delegate its authority to a third party or sub-agent Because agency is inherently personal, the default position is that an agent must not pass to another the performance of its powers or obligations. Delegation may nonetheless occur if the principal consents or a statute confers such authority. Authority to delegate can also be inferred in particular circumstances, such as: where the agent’s role does not call for personal expertise or trust, and the tasks could adequately be carried out by someone else by established custom or usage of the trade where the principal knows, or can fairly be taken to know, that the agent plans to delegate and raises no objection where the character of the agency demands partial or...

What is insurance law? Insurance law divides into three strands: insurance contract law, setting the rules of the bargain between policyholders and insurers the law of intermediaries, governing insurance arranged via agents (as with the majority of placements) insurance company law, addressing prudential soundness, integrity and the supervision of insurers This Practice Note focuses chiefly on insurance contract law. For wider regulatory material, see our ‘regulation of insurance’ subtopic, including Insurance & Reinsurance—regulatory framework—overview and Insurance & Reinsurance— Regulated activities—overview. Reform of the insurance sector In January 2006, the Law Commission and the Scottish Law Commission (together, the Law Commissions) began consulting on modernising insurance contract law. Their programme was then separated into three streams: consumer insurance law reform: pre-contract disclosure and misrepresentation insurance contract law reform: business disclosure, warranties, insurers’ remedies for fraudulent claims, and late payment insurance contract law...

Dispute resolution clauses—what and why Drawing on Practice Note: Dispute resolution clauses—what and why, including a dispute resolution clause in an agreement is widely regarded as beneficial. When well drafted, it can reduce future ambiguity and offer a clear, non-contentious pathway for parties to attempt settlement without immediately resorting to litigation. Many contracts feature such provisions. In some cases they are straightforward, calling simply for litigation or arbitration (and at times also addressing jurisdiction and applicable law). Alternatively, a dispute resolution clause can prescribe other forms of alternative dispute resolution ( ADR) to be used if a disagreement arises; the intention being that ADR steps occur before litigation (or arbitration) begins. These are sometimes labelled ‘ ADR clauses’ or ‘ Dispute resolution clauses’. For guidance on example wording, see Practice Note: Types of dispute resolution...

This Practice Note explores distribution arrangements in general and the commonly adopted models. It explains the distinctions between sole, exclusive, non-exclusive and selective distribution agreements, and describes the relationship between a distributor and the manufacturer. The nature of distribution In a distribution set-up, the distributor buys products from the manufacturer and resells them on its own account. By comparison, under an agency arrangement the agent does not purchase the goods, but secures sales on the manufacturer’s behalf. For a summary contrasting agency and distribution, see Practice Note: Agency and distribution compared. Distribution is often chosen where a manufacturer needs support to access a particular market—for example, in an overseas territory where it lacks sufficient familiarity or connections, or where the products do not necessitate direct dealings with customers. Distribution arrangements can also be used by wholesalers, who act as...

This Practice Note explores how a distribution agreement may come to an end, covering rights to terminate under common law on notice, for breach, or by invoking express termination clauses in the contract itself. It gives guidance on termination for breach of contract and on serving effective notice to bring a distribution agreement to a close. It also examines the termination rights that might be set out in a written distribution agreement, the consequences of termination, and whether duties persist afterwards, including confidentiality commitments and post-termination restraints. Distribution agreements, like other commercial dealings, are not designed to endure forever. They should continue only while both parties derive mutual benefit and the arrangement remains compliant with applicable legislation. A well thought-through commercial arrangement should foresee that, once it no longer has a commercial rationale, it will need to be terminated. The legal route to...

Many contracts include provisions on resolving disputes. At times these are simple terms stipulating litigation or possibly arbitration, sometimes also spelling out jurisdiction and the governing law. Yet a clause can instead prescribe other routes of alternative dispute resolution ( ADR) to be pursued should a dispute arise, offering an alternative to litigation or arbitration. Such provisions are often labelled ADR clauses. Parties have a number of options open to them (see below), and it is vital to appreciate the consequences of the drafting choices you make. This Practice Note reviews several clause formulations and evaluates the issues that may arise in relation to each category. The types of dispute resolution clause considered in this Practice Note are: litigation only clauses mediation clauses multi-tier clauses (escalation clauses) hybrid clauses carve-out clauses For guidance on the principal questions around the...

This Practice Note examines the legal and practical considerations that arise when appointing a party as a sub-distributor. Sub-distributors can enable manufacturers and distributors to widen market coverage for the supply of a product or service within a territory, or for a defined market or customer segment. Under English law, there is no prohibition on a distributor engaging others to carry out, in whole or in part, its distribution obligations on its behalf. In doing so, the sub-distributor presents the manufacturer’s brand and products to the public. Accordingly, distribution agreements may stipulate that sub-distributors are to be appointed only with the manufacturer’s approval......

This Practice Note sets out the core principles for securing injunctions concerning confidential information and privacy. Although other remedies exist for claimants in breach of confidence matters, stopping publication of the material by injunction is frequently the only remedy of real practical worth to the claimant. It also addresses anonymised injunctions, alongside both interim and final injunctions. In recent years, injunctions touching on confidentiality and privacy have provoked debate. So‑called ‘super‑injunctions’ have drawn media criticism for constraining free expression; yet much of this derives from misunderstanding of what a ‘super‑injunction’ actually signifies and from the false sense that such orders are far more common than they are. This Practice Note explains the overarching principles for obtaining relief in this field. For further material on privacy injunctions, see the following Practice Notes: Privacy law—misuse of private...

Businesses commonly rely on joint ventures to break into fresh markets and to design, develop, and launch new products. This notion spans a wide array of scenarios and arrangements, including: structural setups that establish or alter the economic control of a given legal entity: joint venture companies themselves partnerships between participants alterations to existing shareholder control non-structural joint ventures: contract-based joint projects informal (not documented) collaborations For many joint venture arrangements, the extent of 'control' each party holds is often pivotal—though its meaning can be understood differently in varying contexts. This is...

From a competition law perspective, transaction agreements (for example, a sale and purchase agreement) usually contain three main categories of provisions: merger control conditions to closing competition warranties non-compete covenants For this Practice Note, the parties are called the 'seller' and the 'buyer' (though comparable considerations commonly apply to joint venture participants). For sample clauses suitable for sale and purchase agreements, see Standard competition law clauses for sale and purchase agreements. Note—where an offer is made for a target (or potential target) with securities admitted to trading on a UK regulated market or multilateral trading facility, or on any stock exchange in the Channel Islands or the Isle of Man, the Takeover Code may apply (see Merger control and the Takeover Code). For further guidance on competition law points to address during a corporate transaction, see the checklist. Merger control conditions to closing It is typical for the parties to agree that...

This Practice Note outlines and explores the overarching principles that govern the advertising and promotion of medicinal products, together with the associated rules on how the pharmaceutical industry engages with healthcare professionals ( HCPs). Introduction to the advertising and promotion of medicinal products To safeguard public health, the advertising and promotion of medicinal products is subject to strict regulation and close oversight. The general rules for advertising and promoting medicinal products are: it is forbidden to advertise any medicinal product that does not hold a marketing authorisation ( MA) promotion of an authorised medicinal product must align with the particulars in the summary of product characteristics ( Sm PC) linked to the MA promotion of authorised medicinal products must not mislead and should foster the rational use of the product, presenting information objectively and without overstating its...

When evaluating a general damages claim, the practitioner ought initially to refer to the Judicial College Guidelines (JCG)...

This Practice Note This Practice Note reviews mechanisms used in settling litigation. A Tomlin order consists of a consent order paired with a schedule. It operates to stay proceedings on terms that have been agreed. The provisions contained in the schedule may remain confidential. This Practice Note describes the scope of confidentiality attaching to the schedule and sets out how it differs from a standard consent order. Sample wording for a Tomlin order is included, alongside links to precedents, as well as guidance on court approval. It also addresses varying, setting aside and enforcing a Tomlin order, including the considerations the court will take into account when handling applications for each. Further guidance is provided on interpreting and applying the relevant provisions of the CPR; however, some courts and divisions impose very specific requirements for both drafting and approval, and for approaching the schedule and confidentiality issues. Accordingly, you must consider the particular rules and court guide provisions in the forum where your claim is proceeding when drawing up the Tomlin order...

Date [ date ] Parties [ name of Landlord ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Landlord) [ name of Tenant ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Tenant) [ [ name of Guarantor ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Guarantor) ] [ [ name of Mortgagee ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Mortgagee) ] Definitions Within this Deed, the terms below shall be interpreted as follows: [ Annual Rent • the annual sum reserved under the Lease; ] [ Insurance Rent • the Tenant’s share of the Landlord’s costs of insuring the Property (as set out in the Lease); ] Lease • the lease of the Property dated [ date ], entered into between (1) [ the Landlord OR [ name ...

I, [ name ], of [ address ], solemnly and sincerely state that: [ Matters to be verified, set out in numbered paragraphs ] I make this solemn statement in good conscience, believing it to be true, and pursuant to the provisions of the Statutory Declarations Act 1835. DECLARED at [ details ] this [ day ] day of [ month and year ] Before me ................................................................................ [ signature of the person before whom the declaration is made ] A [ commissioner for oaths OR [ solicitor OR [ insert other qualification ] ] authorised to administer oaths ]...