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Section 38 agreement meaning

What does Section 38 agreement mean?
A Section 38 agreement is the contract used on developments for highway adoption, whereby a developer and the local highway authority agree that new estate roads will be built to adoptable standards and, once certified, adopted as highways maintainable at the public expense. It is a statutory agreement under section 38 of the Highways Act 1980 for England and Wales. Typical features include detailed specifications, supervision and inspection rights, a bond or other security to guarantee completion and defects rectification, dedication or vesting of the roadway and land, commuted sums for long‑term maintenance, and staged adoption via provisional and final certificates following a maintenance period. It is often used alongside a section 278 agreement where works to the existing highway are required by a planning permission. Jurisdictional note: The term and statutory basis apply in England and Wales. Comparable routes exist elsewhere: in Scotland, adoption of new roads is achieved through Roads Construction Consent and agreements with the roads authority under the Roads (Scotland) Act 1984; in Northern Ireland, by Article 32 adoption agreements under the Private Streets (Northern Ireland) Order 1980; and in Ireland, by taking in charge under section 180 of the Planning and Development Act 2000.
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CHECKLISTS
Due diligence on section 278 and section 38 highways agreements: adoption, financial liabilities and buyer protections (England and Wales)

How are section 278 and section 38 agreements revealed? Check the outcome of the local search and the seller’s replies to enquiries. A section 278 agreement will only be registrable as local land charges if: it has been entered into pursuant to an obligation in a s 106 agreement; or the highway authority (HA) has declared that there has been a financial default under the agreement. Section 278 agreements Section 278 agreements are used where a developer requires off-site work (other than simple access) to be carried out to a highway. The HA may design and construct the highway works at the developer’s expense. Alternatively, the agreement can appoint the developer as the HA’s agent to undertake the works, in which case a bond must support the agreement. If the developer carries out the works, a certificate of practical completion is issued once the HA engineer is satisfied that the works are complete. Following successful completion of a 12-month maintenance period,...

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NEWS
Local government weekly: Procurement Act PPNs, key case law in planning, social care and healthcare, governance and education funding, plus LAA expert fee precedent - 1 May 2025

In this issue: Public procurement Children’s social care Social care Planning Governance Education Social housing Healthcare Prosecutions by local authorities Daily and weekly news alerts New precedent—template order approving instruction of an expert whose hours or rates exceed Legal Aid Agency limits—public law Public procurement Cabinet Office updates PPNs on data protection and payment spot checks The Cabinet Office has introduced two additional new Procurement Policy Notes within the refreshed set of PPNs republished alongside the Procurement Act 2023 (PA 2023) go-live—PPN 020: Guidance on data protection legislation and PPN 021: Payment Spot Checks in Public Sub-Contracts. PPN 020: Guidance on data protection legislation offers revised direction on relevant and applicable data protection obligations under the UK GDPR and the UK International Data Transfer Agreement (IDTA) that regulate the transfer of personal data from the UK. PPN 020 takes effect immediately. It supersedes PPN 03/22, which provided streamlined guidance and refreshed model...

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NEWS
Arbitration Weekly: England & Wales s 68 ruling; ADGM interim powers; ICC 30,000th case; Malaysia enforcement routes; France Sulu annulment; UK PACCAR reversal; DIFC digital assets

In this issue: Arbitration in England & Wales Institutional and Ad hoc arbitration International arbitration Sector- and industry-specific arbitration Other arbitration and ADR-related news and developments Daily and weekly news alerts Updated Practice Notes Useful information Highlights 2025/2026 Arbitration in England & Wales Commercial Court rejects AA 1996, s 68 bid on exchange rates and UNCITRAL Article 38 correction application In Seacrest Group v BCPR PTE [2025] EWHC 3266 (Comm), the Commercial Court (Trower J) refused Seacrest’s challenge under section 68 of the Arbitration Act 1996 (AA 1996) to a final award dated 27 September 2024, made in an arbitration conducted under the UNCITRAL Arbitration Rules 2021. The challenge advanced two grounds: (i) an alleged serious procedural irregularity within AA 1996, s 68(2)(a), said to arise from the tribunal’s failure to engage with Seacrest’s ‘Exchange Rate Issue’ concerning the computation of deferred consideration under an investment agreement; and (ii) a contention that the tribunal’s...

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PRACTICE NOTES
Singapore competition enforcement: CCCS closed behavioural cases under sections 34 and 47 of the Competition Act—2018–2025 tracker

This table summarises all completed investigations by Singapore’s competition authority (the Competition and Consumer Commission of Singapore—the CCCS) into alleged cartels, anti-competitive agreements and abuses of dominant positions since 2018. Note—only investigations that have been made public are included in this table. 2025 Investigations under section 34 of the Competition Act Remittance services — ZGR Global; Hanshan Issues: Restrictive agreement—information exchange Developments: Decision finding infringement—31/07/2025; penalties totalling $5.36m imposed Contracting — Trust-Build Engineering & Construction Pte. Ltd; Hunan Fengtian Construction Group Co. Ltd Issues: Restrictive agreement—bid rigging Developments: Decision finding infringement—23/05/2025; penalties totalling $4.6m imposed Investigations under section 47 of the Competition Act The CCCS has not yet issued any decisions under section 47 in 2025 2024 Investigations under section 34 of the Competition Act Remittance services — ZGR Global Pte Ltd; Hanshan...

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PRACTICE NOTES
Construction law and practice glossary—S: schedules, scope, set-off, step-in, section 106, Scheme for Construction Contracts, suspension

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z Schedule of amendments A compiled list of changes to a standard form contract in which the parties record their agreed departures from the issued terms. Accordingly, it should be read alongside the underlying standard form. The parties should ensure any negotiated and agreed schedule of amendments is duly incorporated into the contract. Within NEC3/NEC4 suites, such alterations to the standard form are known as Z clauses. Refer to Practice Notes: Construction contract documents and Selection of standard form construction contracts, and to our relevant Precedent schedules under the Precedents tab in subtopics: JCT contracts 2024—overview, JCT contracts 2016, JCT contracts 2011, NEC contracts and Other standard form construction contracts. Schedule of rates/prices A schedule used in tendering when precise quantities are not established, or within a lump sum arrangement for pricing variations (often termed a Bill of Quantities). The tenderer...

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PRACTICE NOTES
Dispute resolution horizon scan, August 2023: litigation funding after PACCAR, CPR and fixed costs reforms, REUL Act changes, key cases, consultations and Bills to watch.

ARCHIVED: This archived Horizon scanner reviews recent and forthcoming developments of note for Dispute Resolution (DR) practitioners as at 16 August 2023. It summarises updates since the 25 May 2023 issue of the Horizon scanner: Dispute Resolution—Horizon scanner—May 2023 [Archived]. Hot topic—Litigation funding after PACCAR Michael Bundock, a barrister in the LexisNexis Dispute Resolution team, examines the Supreme Court’s decision in R (on the application of PACCAR Inc) v Competition Appeal Tribunal [2023] UKSC 28. The long-awaited judgment of the Supreme Court in PACCAR was delivered on 26 July. In a conclusion that surprised much of the funding market, the court determined that a litigation funding agreement entitling the funder to a return calculated by reference to any damages recovered is a Damages-Based Agreement (DBA) within section 58AA of the Courts and Legal Services Act 1990 and the Damages-Based Agreements Regulations 2013, SI 2013/609. The effect of that conclusion is that any DBA which does not comply with the requirements of section 58AA and of the 2013 Regulations...

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PRECEDENTS
Precedent notice designating an Early Termination Date after an Event of Default under the 1992 ISDA Master Agreement, with example descriptions for Section 5(a) defaults and Automatic Early Termination

Notice designating an Early Termination Date following an Event of Default [ Insert Lead-In Language ] An Event of Default under the Agreement has arisen with respect to you in relation to: Section 5(a)(i) (Failure to Pay or Deliver) Section 5(a)(ii) (Breach of Agreement) Section 5(a)(iii) (Credit Support Default) Section 5(a)(iv) (Misrepresentation) Section 5(a)(v) (Default under Specified Transaction) Section 5(a)(vi) (Cross Default) Section 5(a)(vii) (Bankruptcy) Section 5(a)(viii) (Merger Without Assumption) The particulars of the Event of Default are set out below: [ Insert description of the relevant Event of Default, see Exhibits to this template notice for examples of descriptions of different Events of Default under the Agreement ] Where Bankruptcy has occurred and Automatic Early Termination applies: Automatic Early Termination has been specified as applicable to you in the Schedule to the Agreement, and the circumstances described above constitute an Event of Default under Section 5(a)(vii) [ (1)/(3)/(4)/(5)/(6) ] [ or, to the extent...

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PRECEDENTS
Surety Performance Bond securing Section 38/278 Highways Act 1980 Works for Local Highway Authority (England and Wales)

DATE [ insert date ] Parties [ insert name ] of [ insert address ] [ incorporated in England and Wales, company registration number [ insert number ] ] (the ‘Surety’) [ insert name ] of [ insert address ] (the ‘Council’) Definitions 1980 Act • means the Highways Act 1980 Bond • this bond agreement for the Bond Sum Bond Sum • the amount of [ insert bond sum specified in the Highway Agreement or as agreed with the Council ] Default Notice • a written notice issued by the Council to the Surety under clause 5.2 of this Bond confirming that the Developer has not carried out and/or completed the Works in accordance with the Highway Agreement, and setting out the sum which, in the [ Proper Officer’s ] opinion, is needed to carry out and complete the Works in accordance with the Highways Agreement and/or to remedy any defect or default of...

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PRECEDENTS
Precedent Section 38 Highways Act 1980 deed for construction and highway adoption of estate roads, with performance security, certificates and maintenance provisions (England and Wales)

Deed dated [ insert date ] pursuant to section 38 of the Highways Act 1980 concerning the creation and adoption of roads at [ insert text ], made between: Parties [ insert name ] of [ insert address ] (the ‘Council’) [ insert name ] of [ insert address ] [ incorporated in England and Wales with company registration number [ insert number ] ] (the ‘Developer’) [ [ insert name ] of [ insert address ] [ incorporated in England and Wales with company registration number [ insert number ] ] (the ‘Mortgagee’) ] 1 Definitions 1980 Act – the Highways Act 1980; 1990 Act – the Town and Country Planning Act 1990; 1991 Act – the New Roads and Street Works Act 1991; [ Bond – a bond, substantially in the form set out in Schedule 1, Appendix 4, from a bank or other institution first approved in writing by the Council, to...

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Q&As
Section 38 agreement: termination and bond release pre-commencement

Section 38 agreements These agreements fall under section 38 of the Highways Act 1980; refer to Practice Note: Highways—adoption agreements. There is no statutory route by which agreements can be ended or ‘cancelled’. However, a section 38 agreement may, in principle, be altered by a deed of variation, but this requires consent of all parties to the original agreement...

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