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Restrictive Covenants

In this article we look at the differences between the use of Restrictive Covenants in employment contracts and commercial contracts such as share purchase agreements. Background Restrictive covenants have been in the headlines recently, triggered by the government's consultation on whether their use stifles entrepreneurship by preventing workers from starting up their own business after leaving a job. Restrictive covenants are commonly used in employment contracts to prohibit ex-employees from competing with their previous employer by soliciting or dealing with their clients or poaching their remaining staff. As a matter…

Businesses must keep foot on pedal for data protection

A major milestone in EU data protection law was marked when the General Data Protection Regulation came into force just before the EU Referendum. A huge piece of legislation that was set to replace the UK’s Data Protection Act 1998 from May 2018, it marks a tough new era in EU-wide data protection, with new powers for data regulators and much stricter operating boundaries for businesses that process personally identifiable information about individuals. But for UK companies imagining that Brexit will have changed the need for them to comply, there’s a…

Negotiating contracts – an update

Negotiating contracts looks set to be tougher in future, with the news that clauses that require any changes to be made in writing and agreed by all the parties may not hold water. Anti-oral variation clauses often feature in both commercial agreements and employment contracts, but until now there have been conflicting decisions over enforcement. In the recent case to reach the Court of Appeal hinging on this question, the Court has aid that even when such a clause is included, it is possible to amend a contract verbally or by…

Panama Papers fallout will impact every business

Media reporting on the so-called Panama Papers has focused on the tax affairs of wealthy individuals and international organisations, but the hacking of client files at Panamanian law firm Mossack Fonseca has implications for every business. The largest leak in history, with some 2.6 terabytes of data involved, the shockwaves of the Panama incident have been felt around the globe, and the hacking is a wake-up call to companies that don’t already treat their cyber-security with the same stringency as their legal, regulatory, financial or operational risks. This was a…

New register of all people with significant control of companies

One of the major changes to the administration of companies in the UK is coming in via the Small Business, Enterprise and Employment Act 2015 (the Act) which will introduce the requirement for a company to create a public register of individuals who hold significant control of the Company or “People with Significant Control” (PSC). The changes brought in by the Act will create greater transparency in respect of companies in the UK. The Act defines a PSC as anyone who meets one (or more) of the following conditions: owns…

What do solicitors look for when evaluating contracts?

As Corporate lawyers we are regularly asked to read through and assess various contracts for clients. In today’s busy world most clients only need to know whether or not it is a well-written contract and whether or not it covers everything. However, when evaluating contracts there are many more points we look to cover. Essential terms One of the first things to check is whether or not all of the essential terms of the contract are there. Whilst a contract can technically be formed orally in most jurisdictions, a solid…

Choosing the right legal structure for your business

Choosing a suitable legal structure for setting up your new business is a very important part of the process and a key decision to be made when you decide to start your business. In most cases you will want to choose between sole trader, partnership, limited company or limited liability partnership. There are other structures that can be used for social enterprises or not for profit businesses, but in this article we will focus on the four most common business structures. Sole Trader Setting up as a sole trader is…

I want it in writing!

To create a legally binding contract there must be in place the following four key elements: An offer to enter into a contract from one party to the other; Acceptance of the offer; Intention of the parties to create legal relations; and Consideration - being something (often money) in exchange for what is being offered. With the exception of contracts for land in English Law, there is no requirement for a contract to be in writing, and a verbal contract is just as valid as a written one. Verbal contracts,…

Terms and conditions must be clearly stated to apply

Battle of forms highlights a hard truth for company contracts Two companies who went to court in an argument over whose terms and conditions applied to a contract between them, have both lost out. The ruling from the High Court has said that neither company made enough efforts to deliver up their terms and conditions to the other side, leaving both without a leg to stand on in a dispute over a supply of rubber gaskets. The dispute arose between Transformers & Rectifiers Ltd and Needs Ltd. Needs argued that…

Top 10 tips when buying a business

Purchasing a business can be a complicated process. Here are our top 10 tips when buying a business. 1. Make sure you know exactly what you are buying It may seem like obvious advice but the due diligence procedure, where the business is examined in detail, is often the most crucial part of a purchase transaction. It is vital that you and your legal and accounting advisors examine the various aspects of the business including its accounts, commercial contracts, employee details, premises and other liabilities. Due diligence should also reveal how…

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