Payment Mechanism meaning

Basic terms At the outset, assess whether overage suits the transaction. Your client might be better protected by agreeing a higher purchase price or by entering into a conditional contract instead. Overage provisions can be intricate and expensive to negotiate. If overage is to be applied, consider when the seller expects or hopes to receive a further payment and how the buyer could avoid activating the overage. Ensure the overage includes clear definitions of: the overage period (note that, from 6 April 2010, the rule against perpetuities does not apply to most commercial interests and, if no overage period is specified, there is a risk the arrangement could be perpetual) the property that will be subject to the overage any individual units to be sold or constructed, making clear whether parking spaces and other ancillary areas form part of a unit for the overage calculation Include a ‘good faith’ clause, as this may help if the buyer does something unexpected to...

Basic terms At the outset, assess whether an overage arrangement is right for the deal. Your client might be better served by agreeing a higher purchase price or entering into a conditional contract instead. Overage provisions can be intricate and costly to negotiate. If overage will apply, check that the terms reflect the buyer’s intended use of the site. the overage period (note that, from 6 April 2010, the rule against perpetuities does not apply to most commercial interests and, if no period is specified, there is a risk the agreement could be perpetual) the property that will be subject to the overage any individual units to be sold or built, making clear whether parking spaces and other ancillary areas are included within a unit for the overage calculation Include a ‘good faith’ clause, as this may help in the event of a dispute...

It is important to establish whether or not the land is or may be contaminated: to comply with the Law Society’s practice note on contaminated land—see Practice Note: Land contamination—Law Society practice note on contaminated land; because it could present a risk to human health; and because a buyer may face a statutory requirement to remediate under the Environmental Protection Act 1990, Pt IIA. While Pt IIA is intended as a last-resort mechanism (with remediation far more often secured through planning conditions when contaminated land is brought forward for (re)development), if liability under Pt IIA is imposed the cost of necessary clean-up can be very significant. The Law Society’s practice note advises that, when acting for a buyer, mortgagee or tenant, a solicitor should—unless instructed otherwise—undertake a CON 29 ‘Enquiries of local authority’ and an LLC1 ‘Requisition for local land charges search’ to establish whether the local authority has designated the land as contaminated. The acting solicitor should also ensure that...

K&J Townmore Construction Ltd v Damien Keogh [2023] IEHC 509 A High Court ruling in K&J Townmore Construction Ltd v Damien Keogh [2023] IEHC 509 is welcome news to many within Ireland’s construction industry. A party sought leave to pursue judicial review of an adjudicator’s decision under the Construction Contracts Act 2013, but the application was refused. That refusal ensures the Act will continue to operate as a practical and useful mechanism for resolving disputes in the construction industry in Ireland, preserving the intended effectiveness of adjudication... Townmore, Cobec’s main contractor, asked the High Court for permission to judicially review the appointment of the adjudicator, Mr Keogh (the Adjudicator). The Adjudicator considered that he had jurisdiction to determine a dispute between Townmore and Cobec under the Construction Contracts Act 2013. Despite Townmore’s assertion that the issue was not a ‘payment dispute’ within section 6(1) of the Act, Mr Keogh refused to resign. Townmore argued that it would be inequitable to wait until the adjudication had run its course...

In this issue: EU fundamentals Commercial Competition and state aid Corporate Free movement, immigration and employment Financial services Energy Environment Life sciences Regulatory TMT Daily and weekly news alerts New and updated content Trackers EU fundamentals European Commission releases October 2025 infringement package The European Commission has unveiled its October 2025 infringement package, identifying the EU Member States facing proceedings for breaches of obligations arising under EU law. The dossier covers letters of formal notice, reasoned opinions, and referrals to the Court of Justice addressed to Belgium, Malta, Estonia, Austria, Poland, Portugal, the Netherlands and a number of additional countries. Actions relate to multiple instruments and rules, notably Directive 1999/31/EC (Landfill Directive), Directive (EU) 2020/2184 (Drinking Water Directive), and Directive 2011/92/EU (Environmental Impact Assessment (EIA) Directive), among related matters. See: LNB News 08/10/2025 39. ...

HMRC v Boehringer Ingelheim Limited [2026] UKUT 135 (TCC) Boehringer Ingelheim Ltd (BIL) supplied pharmaceutical products at the standard rate to the Department of Health and Social Care (DHSC), retail pharmacies and, predominantly, wholesale distributors. Most of those supplies were to wholesalers and were in the main ultimately used by the NHS. In line with government arrangements concerning medicines used by the NHS, BIL made payments to the DHSC. BIL maintained that each and every payment effectively reduced the consideration it obtained and therefore amounted to a rebate for VAT purposes. HMRC, however, contended that none of the payments constituted a VAT rebate for VAT purposes. The UT disagreed with both BIL and HMRC. HMRC’s principal contention was that BIL’s payments to the DHSC were not price reductions but charges on overall revenues, akin to a profit‑regulatory mechanism, meaning there was no reduction in price for VAT purposes and thus no rebate. HMRC further characterised the DHSC’s role as that of providing funding...

This practice note addresses the 2nd Edition of the Burgundy Book, released in 2013, with particular emphasis on its role as a target cost form. In line with all IChemE agreements, the Burgundy Book contains thorough requirements for testing at completion and for commissioning, making it especially well suited to process engineering sectors such as nuclear, water, petrochemicals, and food. The suite adopts an almost entirely uniform structure across clauses, presentation and schedules. Departure from the standard drafting occurs only where needed to set out the mechanism delivering the risk/reward regime—in this instance, remuneration on a target cost footing. See also Practice Notes: IChemE Conditions 5th Edition—‘Red Book’ and IChemE Conditions ‘Green Book’ 4th Edition. Nature of Target Cost Contracts Target cost denotes that the contractor receives payment of the ‘actual cost’ it incurs (as defined), akin to a reimbursable arrangement but constrained by an agreed target cost. Where the actual cost surpasses the target, any additional sum payable to the contractor is reduced—often to nil. If the...

This Practice Note explores how Dispute Avoidance/Adjudication Boards (DAABs) operate under the FIDIC Red, Yellow and Silver Books 2017. Each form requires disputes to be submitted to a DAAB, which then delivers a decision that binds the parties involved. Beyond formal determinations, a DAAB may provide informal guidance and support during the works, aiming to settle matters before they harden into disputes. The DAAB mechanism forms the opening tier in a multi-tier dispute resolution procedure. Where a party remains unhappy with a DAAB decision, it may move the matter to amicable settlement and, if necessary, to arbitration, as long as contractual time limits are observed. For further detail, please see Practice Note: FIDIC contracts 2017—dispute resolution. FIDIC’s practice notes on dispute boards FIDIC has issued three practice notes on dispute boards: Practice Note I—Dispute Avoidance—focused on dispute boards, released on 1 November 2023; Practice Note II—Appointment of Dispute Boards, published in December 2024; and Practice Note III—Dispute Board Decisions: Preparation and Composition, issued in December 2025. Practice Note...

ISDA documents The 1992 and 2002 editions of the ISDA Master Agreement (together, the Master Agreements) are standard-form documents issued by the International Swaps and Derivatives Association, Inc (ISDA). Within this Practice Note, any reference to a Section of a Master Agreement or a Part of a Schedule should be read as a reference to the 2002 ISDA Master Agreement and its Schedule, unless stated otherwise. For general guidance on negotiating ISDA Master Agreements, see: Introduction to negotiating ISDA documents. Section 6—Early Termination Section 6 (Early Termination) of the Master Agreement explains the consequences that follow the occurrence of an Event of Default or a Termination Event, as described in Section 5 (see Practice Note: Scope of the ISDA Master Agreement—Section 5 (Events of Default and Termination Events)). It also sets out the way the close out netting mechanism operates after an Event of Default or Termination Event...

HSC(CHS)A 2003, Part 3 For personal injury compensation claims where the incident occurred on or after 29 January 2007, Part 3 of the Health and Social Care (Community Health and Standards) Act 2003 (HSC(CHS)A 2003) applies. The HSC(CHS)A 2003 extends to any matter involving foreign nationals and foreign compensators, in circumstances where NHS treatment and/or ambulance services were delivered to the injured person following their return to England, Scotland or Wales. Part 3 of the HSC(CHS)A 2003 permits recovery of the costs of treating an injured person in all situations where that individual has successfully pursued a personal injury claim against a third party. Under HSC(CHS)A 2003, s 150(3), a ‘compensation payment’ is a payment, including one in money’s worth, made on behalf of a person who is, or is alleged to be, liable in respect of the injury. HSC(CHS)A 2003, s 150(3) further provides that relevant NHS charges are not included...

A landlord of commercial premises let under a lease may invoke the mechanism in Schedule 12 to the Tribunals, Courts and Enforcement Act 2007 (TCEA 2007) to recover rent due from the tenant under that lease. This mechanism is known as commercial rent arrears recovery (CRAR) (TCEA 2007, s 72(1)). When TCEA 2007 commenced on 6 April 2014, CRAR supplanted the landlord’s former common law right to distrain, which from that date was abolished (TCEA 2007, s 71). TCEA 2007, accordingly, provides a complete statutory code defining the scope of the landlord’s remedy where rent on commercial premises is outstanding under the CRAR regime. If a tenant leaves rent unpaid, the landlord may serve a notice on any subtenant specifying the sum it is entitled to recover under CRAR (TCEA 2007, s 81). That notice takes effect after 14 clear days have elapsed from service (TCEA 2007, s 81(5) and the Taking Control of Goods Regulations 2013, SI 2013/1894, reg 53)...

LPA’s obligations when imposing financial contributions Developers are frequently obliged to make monetary payments to the local planning authority (LPA) to fund defined projects, helping to offset the harmful effects of a scheme and thereby enable the grant of planning permission. This Q&A addresses circumstances where the section 106 agreement contains no specific express clawback mechanism. When a planning obligation (a section 106 obligation) is proposed to secure a financial contribution at the determination stage of a planning application, that contribution must satisfy the stringent legal tests in regulation 122 of the Community Infrastructure Levy Regulations 2010, SI 2010/948 (SI 2010/948, reg 122) (as amended). Only by meeting those tests can any such payment lawfully and ultimately underpin the grant of planning permission...