Monday, 8 May 2017

What is the Law in Your Life?

Five things to know about consequential loss

Under Scots law, parties to a contract will not always recover all of their losses. The party in breach of contract will not be liable for losses that are considered too remote. This means that even if it is shown that that party's breach caused the loss, if that loss was sufficiently unusual or unlikely then he will not usually be liable for it unless he was aware of some special or unusual circumstances when he entered into the contract.

1.  Consequential loss or indirect loss is one of two types of loss recoverable under a contract.  Consequential loss is loss that does not arise naturally but that which could have reasonably been contemplated by someone with knowledge of special circumstances outside the usual course of things. This is in contrast to direct loss which is loss that arises naturally, according to the usual course of things, from the breach.

2.  The term "consequential loss" is often used in everyday language as shorthand for a broad category of losses including loss of profit, loss of opportunity, loss of goodwill and so on. However, the legal meaning of the term may be quite different.

3.  The default position is that a party to a contract will be liable for both direct and consequential loss.  However, it is not uncommon for both parties to exclude liability for consequential loss.

4.  It is important to be specific when attempting to exclude a category of loss. Consequential loss is a term that is cloaked in ambiguity.  This can make determining what is a consequential loss as opposed to a direct loss a difficult task

5.  Profit is not always classed as consequential loss and is therefore not always excluded by a clause that excludes this type of loss. The Scottish courts have held that loss of profit can sometimes be a direct loss.

Thursday, 13 April 2017

What is the Law in Your Life?

Five things to know about standardisation in Commercial Leasing

1. The concept of standardisation is well-known to all these days and legal precedents or standard documentation is no different. The Property Standardisation Group (PSG) has developed a suite of templates for use in property transactions in Scotland which have been well-received. See www.psglegal.co.uk.

2. The issue of a Model Commercial Lease was first mooted in England and Wales and a template was introduced in 2014 by the British Property Federation. That template met with a muted response initially but and it has proven to be useful. The PSG have now introduced a Model Commercial Lease for use in a larger scale office development.

3.  As with all styles, care must be taken to ensure that it fits the circumstances of a particular letting and a knowledge of the underlying law is essential.

4.  The Model Commercial Lease may be capable of being used "as is" but it is likely to also be of assistance in giving solicitors and their clients examples of different types of clauses which may be adapted to suit individual circumstances.

5.  The aim of templates, of course, is to seek to speed up the process of concluding deals. This may or may not happen but the new Model Commercial Lease is a step in the right direction.

Monday, 20 March 2017

What is the Law in Your Life?

It is common to find a reference to one party to a contract being obliged to use her/his reasonable endeavours to do something. What does that phrase mean and what are the alternatives?

1.  The commercial context of an endeavours obligation will always dictate what such a provision actually requires of the party who agrees to it. Such issues are commonly discussed in the Courts.

2.  The most onerous obligation is a “best endeavours” obligation. This has been held to mean that the party concerned must do everything possible (and legal) to fulfil the obligation. For that reason, it is best avoided when acting for the party who is being asked to agree to such an obligation.

3. The least onerous obligation is to use “reasonable endeavours”. This means that the party must take reasonable steps to fulfil her/his obligation. Sitting back and doing nothing is not enough. Each case will be assessed on its own facts and circumstances. It is an underlying principle of the Scots common law that parties to a contract are deemed to be obliged to act in such a manner as furthers the objectives of the contractual relationship between them – and certainly not act contrary to these terms.

4.  A common compromise is to seek an “all reasonable” or “all reasonable commercial” endeavours obligation. These are variants on a theme which, by necessity, fall between the two extremes.

5.  The message must be to think carefully about all such obligations which are asked of you before agreeing to grant same.

Thursday, 26 January 2017

What is the Law in Your Life?

5 things you need to know about Design Right:

1.  Designs are the shapes and configurations of objects. This can include symbols, patterns, profile and packaging.

2.   Designs are protected in two ways:

(a)   Unregistered designs - Unregistered designs are further categorised into UK only unregistered rights and Community unregistered design rights. An unregistered UK design right arises on the creation of an article, and will protect any original, unconventional aspect of the shape or configuration of the article (or part of it). Community unregistered design rights arise at the point at which the article is first made available to the public, but will only protect against direct copying. 

(b)  Registered designs - Registration of designs will protect them and can be done so in the UK, EU and in other countries. An application to protect the article’s design must be made within the first 12 months of first marketing.

3.  The benefits of registering a design right include: longer duration of rights (UK and Community registered rights can last up to 25 years, whereas UK unregistered design rights have a maximum term of 15 years, and Community unregistered rights only 3); and if seeking to rely on unregistered design rights, a party is required to prove that their design has been copied in order to establish, whereas a registered design owner does not have to.

4.   You can licence your design right to another party (note that in the final 5 years of a right you must give a licence of right to anybody who asks).

5.   The Copyright, Designs and Patents Act 1988 regulates the UK Design Registration. To register your design, you need to provide:  the full name and address of the applicant (or company registration information where applicable); two representations of the design to be registered; and information on the article which the design will be applied to.

Wednesday, 19 October 2016

What is the Law in Your Life?

5 things you need to know about ScotLIS:

1.   ScotLIS is the acronym for the proposed Scottish Land Information Service which will be an authoritative "one stop shop" for information on land and property in Scotland.

2.  All properties in Scotland will have a Unique Property Reference Number ("UPRN") which will be used as a method of identifying properties. Access to ScotLIS is likely to be by way of UPRN, Title Sheet number and/or Post Code.

3.   Registers of Scotland are responsible for the creation of ScotLIS and the first iteration thereof will be in place by October 2017.

4.   An integral part of ScotLIS will be a definitive cadastral-based plan which will ultimately show the line of pubic utilities and their such data. This is the way in which other systems operating elsewhere in the world function e.g. Infoland in Norway.

5.   Other bodies assisting in the work of creating ScotLIS include the Improvement Service; Ordnance Survey; The Law Society of Scotland; and the Royal Institution of Chartered Surveyors.

Friday, 30 September 2016

What is the Law in Your Life?

5 things you need to know about Keeper Induced Registration:

1.   In terms of The Land Registration etc (Scotland) Act 2012 ("the Act"), the Keeper of the Land Register is entitled to induce registration of title to properties in the Land Register. This is known as Keeper Induced Registration ("KIR) and is supplementary to the registration of title by way of transfer of title or by voluntary registration.

2.  The Keeper has accepted an obligation to complete the Land Register by 2024. This is an ambitious target. KIR will be used to help accelerate the programme of registration of title. Registers of Scotland will engage with the legal profession, local authorities and agencies such as citizens advice bureaux in a particular area before KIR happens for that area. Individual landowners will be notified once their title has been brought onto the Land Register.

3.   Initially, KIR will only be used in 3 Land Register Research Areas: Carnoustie Edinburgh (Murrayfield); Glasgow (Bearsden). KIR will then be rolled out across the country in appropriate circumstances.

4.   Where a title is transferred to the Land Register by KIR, the owner will not incur any of the costs of the transfer. All work will be undertaken by the Keeper''s staff. The owner will receive a letter informing him/her that the title is to be registered using KIR and will be asked to confirm a few facts as summarised in a letter from the Keeper. An obvious example of where KIR will be useful is where the title to say, 5 out of 8 flats in a tenement block are registered in the Land Register but the other 3 titles are not. It will be expedient and beneficial for the remaining 3 titles to be registered.

5.   A title registered using KIR will, to all intents and purposes, look like a title registered in the normal way under the Act. It will be a facsimile of the title which is, at that time, recorded in the Register of Sasines. The Keeper will bear the costs of registration and so there will be no additional cost to a homeowner.  The owner will benefit from a state-backed guaranteed title.  There will be no erosion of rights for homeowners whose titles are brought onto the Land Register by the KIR process itself.

Monday, 12 September 2016

What is the Law in your Life?

5 things you need to know about Dilapidations in Leases:

1.   Although the obligation to repair/renew a property leased from a landlord may differ from lease to lease, the tenant in all cases will have an obligation to return the property in an appropriate condition at the end of the lease. In some cases, this will be by reference to a photographic Schedule of Condition prepared and agreed between the landlord and the tenant at the commencement of the lease.

2.   Most commercial leases entitle the landlord to enter the leased subjects in order to assess the state of repair at any given time during the lease term with the tenant being obliged to remedy any wants of repair identified in an interim Schedule  of Dilapidations.  Tenants are advised always to check such schedules to ensure that the works identified therein are really their obligation in terms of the lease.

3.   In principle, the rectification of dilapidations in a leased property is appropriate. Care should always be taken however to ensure that the works identified therein represent repairs rather than extra-ordinary repairs or improvements where such may not be  the responsibility  of the tenant.

4.   This, perhaps, is no more obvious than at the end of the term of a lease where what are called terminal dilapidations are identified by the landlord. Such schedules should be served timeously in terms of the lease and be examined carefully against what the lease states with regard to the tenant's obligation to reinstate the property to the condition it was in at the commencement of the lease. If available, the schedule should be assessed against a photographic record of the condition of the property as at the date of entry.

5.   In certain cases, the lease may provide for a payment to be made by the tenant to the landlord akin to the rent which the landlord would otherwise be entitled to receive if it was letting a unit in good tenantable condition and repair to a new tenant following the expiry of the former lease. If such a provision is in a lease, the tenant should seek to limit the period during which such a payment will be due.