Reasonable skill and care meaning

Introduction This checklist sits alongside the more detailed Practice Note: Negotiation guide—services agreements. It serves as a quick-look aide and concentrates on the principal, generic points that commonly surface across most forms of services agreement. It leaves out certain specialist matters addressed in Practice Note: Negotiation guide—services agreements that tend to arise only in particular categories of services arrangements or those of greater complexity (eg acceptance testing, audit rights, TUPE, step-in rights, benchmarking and exit assistance). It sets out the customer’s and the supplier’s optimal stances for each topic, then offers a proposed middle-ground position (which is not intended to be comprehensive). For deeper analysis and explanation of each point, refer to Practice Note: Negotiation guide—services agreements. For balanced precedent contracts, which implement much of what is explored here and in the negotiation guide, see Precedents: Services agreement—one-off supply—balanced, Services agreement (ongoing supply)—balanced and Framework services agreement—single contract with call-off orders—balanced. This checklist is relevant only to business-to-business dealings in commercial practice...

Introduction This checklist sits alongside the fuller Practice Note: Negotiation guide—IT contracts and serves as a quick-reference point, concentrating on the principal general matters that commonly surface in IT agreements. Its emphasis is on the key, general issues likely to arise in IT contracts. It deliberately excludes certain specialist topics covered in the Practice Note that arise only in particular IT arrangements or in higher-complexity engagements, such as: acceptance testing audit rights TUPE step-in rights benchmarking exit assistance For each issue, it sets out the customer’s and supplier’s optimal positions and then proposes a balanced middle ground, which is indicative rather than exhaustive. For a fuller discussion and explanation of each point, see Practice Note: Negotiation guide—IT contracts. To view balanced precedents that put much of what is discussed here, and in the negotiation guide, into practice, refer to: Precedents: Framework agreement for the provision of IT products and services—balanced, and IT services agreement—balanced. This checklist is relevant...

Morley (trading as Morley Estates) v Royal Bank of Scotland plc [2021] EWCA Civ 338 What are the practical implications of this case? This decision clarifies the boundaries of a bank’s obligations to its client and demonstrates how those responsibilities shift over the course of their dealings. Where a borrower has taken out a secured lending facility, the bank’s duty to deliver banking services with reasonable skill and care ceases when the contractual loan period ends. After that point, the bank is only bound by the express provisions of the mortgage and the equitable duties inherent in that security relationship (for example, the recognised obligation to exercise reasonable care to realise a proper price for the collateral). It is not correct to read into the mortgage an implied contractual duty of reasonable skill and care. In addition, the Court of Appeal endorsed RBS’s position that any alleged non-compliance with its internal policy documents—unknown to the customer and potentially aspirational—cannot of itself ground a claim for breach of duty by...

From 1 September 2025, the ECCTA 2023 will have further implications for managers when the failure to prevent fraud (FTPF) offence comes into force. Managers must be able to evidence that they understand and have assessed how the ECCTA 2023’s FTPF provisions affect their businesses and compliance arrangements. They should demonstrate that they have taken account of the government’s FTPF guidance, issued in November 2024 (see: Home Office announces implementation of corporate 'failure to prevent fraud' offence, LNB News 01/09/2025 9). They will also need to evaluate the impact of the FTPF provisions on current and planned fund investments, including stakes in portfolio companies and ties with service providers, such as placement agents, who help bring investors into the funds. For managers with contractual and regulatory obligations to exercise due skill, care and diligence to prevent loss to the assets they manage, FTPF considerations are not unfamiliar; however, the possibility of criminal liability should intensify the compliance emphasis on FTPF...

Firmdale Holdings Ltd, together with five subsidiaries operating the group’s hotels, alleged in High Court claim dated 5 February 2025 that its broker failed to secure insurance that would have entitled it to business interruption indemnity when government‑mandated closures were imposed across Britain. The claimant group (also including a hotel laundry and cleaning business, another Firmdale subsidiary) contends that Howden was negligent and must pay out to meet losses hotel owner maintains it would have recovered from an insurer. Had Howden performed with reasonable skill and care, the hotel businesses argue, their COVID‑19‑related interruption losses would have been insured, subject to applicable limit of indemnity, and insurers would have indemnified the claimants for those losses. Accordingly, Howden should pay out to cover losses they contend would have been paid by insurers in any event...

Directors’ duties—fundamentals For the first time, the key duties of directors formulated by the courts were expressly set out in statutory form in sections 171–177 of the Companies Act 2006 (CA 2006), thereby consolidating existing judge‑made principles. A full account of these statutory obligations—referred to as the general duties—can be found in Practice Note: Directors’ duties—fundamentals. The first four general duties are set out below: a duty to act in line with the company’s constitution and to use conferred powers solely for their proper purposes as intended by that constitution a duty to act, in good faith, in the manner the director believes is most likely to promote the company’s success for the benefit of all members collectively, while, in doing so, having regard to various factors a duty to exercise independent judgment a duty to exercise reasonable care, skill and diligence With respect to the fifth, sixth and seventh general duties, consult Practice Note: Directors’ duties—directors’ interests: CA...

The nature of the duty owed by bus drivers A bus driver owes the same duty to fellow road users, including passengers, as any other driver: to drive with the reasonable care and skill of a competent motorist. That competence must be evaluated in context, particularly for those operating buses, by reference to: the Highway Code the Driver and Vehicle Standards Agency's Official DVSA Guide to Driving Buses and Coaches Only with such a measured assessment of the duty of care can there be a meaningful decision on whether that duty has been breached. The County Court case of Kevin Graham v Go North East Limited (20 November 2017) (not reported by LexisNexis®) illustrates the delicate balance when applying this duty. A defendant bus driver collided with the claimant's vehicle at a crossroads controlled by traffic lights. He proceeded through a changing signal because he believed that not doing so, and braking, would endanger his passengers. The judge recognised the 'split...

This Practice Note forms part of a suite addressing local authority (LA) companies. It explains the obligations owed by the directors of an LA company both to the company and to the LA, and flags where those twin roles may clash. For further detail on LA companies, see Practice Note: Local authority companies. Directors’ duties under CA 2006 Chapter 2 of Part 10 of the Companies Act 2006 (CA 2006) places into statute a number of long-established common law and equitable duties of directors. In brief, the seven general duties under CA 2006 are: to act within their powers to promote the success of the company to exercise independent judgement to exercise reasonable care, skill and diligence to avoid conflicts of interest not to accept benefits from third parties to declare an interest in a proposed transaction or arrangement Who are the duties owed by? The general duties bind every director of a company. ‘Director’...

1 Consultant warranties and undertakings The Consultant warrants that: the Consultant has complied fully with and fulfilled, and will continue, at all times, to comply fully with and fulfil, all the Consultant’s terms and duties under the Appointment, in line with the terms of the Appointment; in relation to the delivery of the Services under the Appointment, the Consultant has exercised, and will continue to exercise, the reasonable skill and care expected of a duly qualified and competent professional consultant with experience of projects matching the Project in scale, scope, nature, complexity and value. The Consultant’s obligations under this Memorandum are neither greater nor of longer duration than those owed to the Employer under the Appointment, and the Consultant shall be entitled, in any claim, action or proceedings, to invoke any limitation set out in the Appointment and to assert the same or equivalent defences to liability as it could against the Employer under the...

1 Sub-Contractor warranties and undertakings The Sub-Contractor warrants and undertakes that it has complied with, and will continue to comply with, all terms and obligations required of it under the Sub-Contract; to the extent it undertakes any design for the Sub-Contract Works, it has exercised, and will continue to exercise, the reasonable skill, care and diligence expected of a properly qualified and competent architect or other suitable professional designer experienced on projects of equivalent scope, type, size, nature and complexity to the Works. The Sub-Contractor’s obligations under this Memorandum are neither wider nor longer in duration than those owed to the Contractor under the Sub-Contract; in any action it may rely upon any limitation and equivalent defences available thereunder as if the Beneficiary were a joint employer with the Contractor, save that it may not exercise any right of set-off or counterclaim. The Sub-Contractor’s obligations under or by virtue of paragraph 1 shall not...

In the County Court at [ insert ] Claim No. [ insert number ] Between A Claimant and B Defendant Particulars of claim At all material times, the Claimant was a British citizen, habitually resident and domiciled within the jurisdiction of England and Wales aforesaid. On 3 February 2024, the Claimant reserved lodging at the Jupiter hotel in Punta Cana, in the Dominican Republic, for the fortnight running from 5 to 20 August 2024. The said contract was concluded over the internet via the Defendant’s website portal. It was an express term of that contract that the Defendant accepted responsibility for the provision of the accommodation booked with them; if it was not supplied with reasonable skill and care, they would be liable for any injury suffered as a result and in consequence [ clause 10 ]. The Claimant duly paid the contract price in full and embarked upon the holiday as planned. On 8 August 2024, the Claimant made...