Commercial contracts quiz:
how do the latest cases impact your deals?
1.
Late payment
You are negotiating with an outsourcing provider and Appster’s
CFO has told you to do your bit to help cash flow. What’s the
longest payment period you can negotiate, before statutory late
payment interest starts to run?
2.
a)
30 days from latest of performance/invoice/acceptance
b)
you are free to negotiate any payment period you like
c)
60 days from latest of performance/receipt of
invoice/acceptance unless you expressly agree a longer
period which is not “grossly unfair”
Jurisdiction
Your outsourcing contract states that disputes shall be subject
to the exclusive jurisdiction of the courts of England and Wales.
Could the provider commence proceedings before a court in a
different EU Member State (the “Italian torpedo”)?
a)
No - an express exclusive jurisdiction clause is completely
watertight
b)
Yes - but from 2015 this will not override the parties’
express submission to an exclusive jurisdiction
c)
Yes - exclusive jurisdiction clauses are not worth the
paper they’re written on
3.
Dispute escalation clauses
You are considering the dispute escalation provisions for the
outsourcing agreement. What’s the courts’ current approach?
4.
a)
Judges hate effective dispute escalation provisions
because they’re worried they’ll be out of a job
b)
The courts tend to uphold dispute escalation provisions
because they want to give effect to the mechanisms the
parties have agreed
c)
Dispute escalation provisions will only be upheld if they
are clear, unequivocal and detailed
Exclusions
You manage to negotiate the following clause:
“the Customer shall have no liability whatsoever in contract, tort
(including negligence) or otherwise for any loss of goodwill,
business, revenue or profits, anticipated savings or wasted
expenditure (whether reasonably foreseeable or not) or indirect
or consequential loss suffered by the Contractor…”
Will that clause protect Customer in all circumstances – e.g. if it
deliberately fails to perform the contract?
a)
Yes – if this is what has been agreed between the parties
b)
Prima facie it applies – but the courts often find reasons
not to uphold exclusions in cases of deliberate breach
c)
No – such an exclusion will never be effective