Exchanging Contracts

A binding contract comes into existence on exchange of contracts, after which neither party can withdraw incurring the liability for breach. Therefore necessary to check all o/s queries have been dealt with before exchanging (‘the point of no return’) .
The actual time when a contract comes into being depends on the method used to effect exchange.

Authority to exchange: Once a solicitor has his clients authority to exchange he may then do so choosing which ever method he deems appropriate. Exchanging without clients authority can lead to the solicitor being liable to the client in negligence.

Exchange usually initiated by the buyer indicating the buyer is ready to commit himself. Where the purchase of one property is dependant on the sale of another the solicitor must ensure that exchange of contracts and completion are synced in order to avoid leaving the client with two houses or none at all.

Telephone exchange

• Most common method of exchange.
• The quickest way of securing an exchange of contract.
• Contract in effect as soon as solicitors agree that exchange has taken place.
• After the telephone call, a physical exchange of documents occurs through the post.
• HOWEVER if one party decides to withdraw, it’s all too easy for them to deny the contents of the phone call. Without which no contract can exist.
• To avoid any problems must agree prior to exchange to adopt The Law Society formulae. And an accurate attending note recording the telephone conversation must be made as soon as possible:
• Formula A: Used where one solicitor already holds both parts of the contract before exchange.
• Formula B: this is used where at time of exchange each party’s solicitor is still in possession of his own clients signed contract.
• Formula C: designed to be used in a chain transaction.

Personal exchange

• Rarely used.
• The solicitor for each party meets usually at the sellers office to exchange.
• Contract exists from the moment of exchange.
• Although not practical as solicitor office may be physically at great distance from each other.
• Has benefit of seeing the others contract before exchange and can therefore be checked to make sure they’re identical.

Postal exchange

• Exchange takes place once seller solicitor receives signed contract and deposit. After which he sense the clients signed contract.
• Exchange deemed to have taken affect once seller posts his clients signed contract (Adams v Lindsell (1818)).
• However a postal exchange is not recommended where a chain of transactions take place. Due to the possibility of contract may get lost in the mail.

Document exchange (DX)

• Most solicitors belong to a document exchange (private postal system).
• Postal rules do NOT apply to DX. And unless contract states otherwise, the contract comes into existence when the seller’s part of the contract is received by the buyer.
• The contract is made when the last copy of the contract is deposited at the document exchange.

Fax exchange

• Standard Conditions does not permit fax to be used as a valid method of service of a document.
• An exchange by fax is not a valid exchange of contracts under s2 LPA (Misc Provisions) Act 1989.

Email

• At the moment contracts for sale of land must be in writing so cannot be entered into electronically via email or via the internet.
• However government proposals for electronic conveyancing would allow contracts to be made electronically. Under which there would be only one copy of the contract which would be stored and ‘signed’ electronically.

BLP - Partnership Liabilities

A partner who acting within the authority granted to him (s5 PA1890):

• Will bind his fellow partners and
• Make any debts so incurred by him partnership rather than personal debts (thus also binding the other partners).

In contract if a partner acts outside his authority then any debts will be his alone.

Liability of partners for partnership debts

Each partner is both jointly and severally liable to outsiders for any act or omission committed by any of the partners/employees in carrying on the partnership (s9-12 PA 1890). A third party has the option to sue:

1. The partnership (meaning each partner is liable).
2. All the partners in their own names.
3. Any one or more of the partners in their own name.

For the full amount of his loss, depending on which the 3^rd party believes to be the most successful course of action. Allowing the 3^rd party to cherry pick the most affluent or easily accessible partner and pursue him.

Liability of new and retiring partners

Under s17(1) of PA 1890: “A person who is admitted as a partner into an existing firm does not thereby become liable to the creditors of the firm for anything done before he became a partner.” Unless the new partner enters into an agreement to that effect.

Under s17(2) “A partner who retires from a firm does not thereby cease to be liable for partnership debts or obligations incurred before his retirement.”

Unless

17 (3) “A retiring partner may be discharged from any existing liabilities by an agreement to that effect between himself and the members of the firm and the creditors”.

A retiring partner could also request his fellow partners (and creditor if possible) indemnify him against any historic debts unsettled at the date of his retirement. However whether or not such an indemnity is granted and the terms it sets out will depend on the strength of the outgoing partners bargaining position.

ALTHOUGH a partner has no liability for debts incurred after he ceases to be a partner (s17(2) PA 1890) this can be overturned. And thus he must be careful that they do not:

• Allow themselves to be held out (s14 PA) as still being a partner or
• Permit 3^rd parties to continue in the belief they are still partners (s36 PA).

This can be done by ensuring his name is removed from all partnerships documents. As well as under s36 PA give notice both generally to the world at large through an advertisement in the Gazette. Allowing a retiring partner to escape liability for future debts. And if possible under s36 (1) write to the firms actual clients notifying them of his retirement.

BLP - Partnership

Intro

Partnerships are created by two or more people “carrying on business in common with a view to profit” (s1 PA 1890). They do not necessarily need written agreement between partners for it to exist. In the absence of an agreement they are governed by PA 1890.

No registration is required. Altho do have to inform HMRC within 3 months of commencing business. Lack of registration and limited regulation mean Partnerships can keep internal affairs private and in theory is cheaper to run.

They are however taxed as self-employed people therefore have to pay income tax.

Legal Status of Partnership

All partners share in responsibility for debts and obligation of the partnership. Their liability is joint and several (any partner of the business can be called upon by a creditor to settle a debt. Which can ultimately leading to partner becoming bankrupt).

It is the partners themselves who are the business and it is they who are and who will be responsible personally for what is done in the name of the Partnership. Thus no protection is offered to partners from 3^rd parties. Therefore no need for a 3^rd party to request a personal guarantee when lending/ offering credit to a partnership. The partners are already personally liable for all partnership liabilities.

Partnership Agreement

Is whatever the partners agree between themselves therefore can be oral or in writing express or implied. A Partnership exists as long as:

• Existence of a contractual intention and
• A relationship capable of satisfying required of s1 PA based on intent.

Partners are also free to agree any restrictions they like between themselves within their agreement and thereby bind themselves contractually even if such agreement curtails the rights given to them under PA 1890. However what they can’t do is restrict the protection given to third parties under PA 1890.

Under s19 PA 1890 partners are free to vary the terms of the agreement if they so choose. But only if all the partners unanimously agree to its amendments.

No matter what form the Partnership Agreement takes it’s always a private document and may be kept confidential between partners. It does not appear on any public register unlike those of a limited company and no third party has the right to demand to see it.

BLP - Entering into contracts, agreements and arrangements

It is common for directors to have the authority to enter a wide range of contracts. Such authority comes from Table A art 70:

70 … the business of the company shall be managed by the directors who may exercise all of the powers of the company.

Therefore subject to CA 06, the companies own Memorandum & Articles directors can make a decision without requiring member approval.

HOWEVER under s190 CA 06, a director or a person connected with a director buying or selling an asset for/from the company and that asset is “a substantial non-cash asset” will require approval by the members by ordinary resolution. Either before the contract is entered into or entered into subject to members consent.

Test for a substantial non-cash asset (s191)

• An asset worth less than £5,000 is never substantial.
• An asset worth in excess of £100,000 always will be substantial.
• An asset worth between £5000 - £100,000 will be substantial, if it exceeds 10% of the company’s asset value (or net asset value).

A connected person with a director of a company is (s252-253 CA 06):

• A member of the directors family.
• A corporate body he’s connected to.
• Child of director
• Parents

Therefore before directors can purchase an asset under art 70, which is a substantial non-cash asset, they must first obtain the consent of the members consent by ordinary resolution or at least make it a condition of the contract that approval being obtained from members.

OTHERWISE the transaction is generally voidable at the Company’s request whilst those “liable” must account for any gain and indemnify the Company in respect of any related loss (s195 CA 06).

The Role of the Solicitor At the Police Station

Under s58 PACE 1984 a suspect detained at the police station is entitled to free legal advice and to be represented.

The solicitor role at the police station is to protect and advance the legal rights of their client (Code C Para 6) confidentiality.

The initial telephone call may happen at any time from the custody officer advising a suspect has been arrested and needs a solicitor. He can only give you the suspects name and offence committed. You MUST speak to the client:

• Advise the client to confine his conversation to Yes/No answers in response to your questions.
• Confirm he wants you to represent him
• Advise any advice given is free.

DO NOT ALLOW CLIENT AT THIS STAGE TO GIVE HIS VERSION OF EVENTS!

Tell client:

1. When you’ll be attending and what you’ll do.
2. Not to talk to anyone about the case.
3. Not to agree to be interviewed or sign anything, not to give samples or take part in an identification parade without you being there.

The solicitor MUST attend the station immediately if:

• The offence is serious
• And interview or samples need to be taken straight away.
• The client is vulnerable.
• The client complains of being mistreated.
• Representations need to be made about the clients detention.
• The client needs to speak to the solicitor in confidence.

Other steps that need to be taken:

1. Check the law: check the legal elements of the offence the suspect has been accused of so you’re aware of what needs to be proven to prosecute your client.
2. Check old files: in case your firm has represented the client before and what was the outcome of those proceedings and if it’s of the same type of offence. The will also reveal if clients vulnerable.

On arrival at the police station

The custody office is the first person you speak to, giving you basic information about the circumstances. You should also view the custody record and detention log (Code C para 2.4) recording all significant events since the clients arrival. Use the custody record to obtain your clients basic info and:

1. The alleged offences for which the clients been arrested.
2. Time of detention and reason for authorisation (Delay).
3. Any significant comments made whilst at the station.
4. Any samples which may have already been taken.
5. Any identification procedure taken place.
6. Any interview already taken place.
7. Client under any physical/mental disability requiring appropriate adult.
8. Any illness client suffering from or requires medical attention. Or suffering from the effects of alcohol or drugs.
9. Any significant items found on clients person or premises.
10. If clients been in detention for six hours or more, any details of detention reviews and reason why client continued detention has been authorised.

Once you have obtained the basic info you need to speak to the investigating officer to obtain:

• The facts of the offence.
• Disclosure
• Significant statements.
• The next step in the investigation.
• Previous convictions.
• Any witnesses & if they gave statements and likely to attend court.

The client

• The solicitor needs to identify himself to the client and his role and provide free advice and has no connection with the police but to protect his rights. And anything he is told by client will remain confidential.
• Inform the client of what you’re been told about the offence the client has allegedly committed. As well as informing the client of the substantive law and what the police need to obtain a conviction.
• The clients instructions; getting his version of events.
• The nest step the police intend to take. Usually to take part in a recorded interview.
• Prepare the client for interview. Whether to answer questions or not or simply prepare a written statement if client is to give a ‘no comment’ interview.

The solicitor must aim to:

1. Investigate the prosecution case.

2. Obtain info to assist in the conduct of the defence.

3. Avoid client giving evidence which might strengthen their case.

4. Influence the police not to charge or

5. Create a favourable position for the client.

Liability at Common Law

Negligence places a burden upon the claimant to prove:

1. The D owes him a duty of care.
2. The D is in breach of that duty.
3. The breach has caused consequential losses reasonably foreseeable.

Establishing liability for road traffic accidents:

Road users have a duty of care to avoid causing injury to others who maybe injured by their actions. The standard of care is that of the ordinary skilful driver. Drivers owe a duty to take reasonable care to ensure the safety of their passengers.

Funding: Many firms offer a free initial half-hour interview, where they will form a view as to the viability o a PI claim:

• Conditional fee Agreement: Under s58 of the Courts and Legal Services Act 1990, a solicitor and client can agree that the client will pay his own solicitor costs under certain agreed circumstances (usually upon winning).
• After the event insurance: Insured against having to pay the other sides costs and disbursements as well as own. Usually taken out once legal action is required and before proceedings have commenced,

The clients proof of evidence not to be confused with the clients witness statement. The function of the proof is to obtain the fullest possible detail from the client. Usually taken at the end of the interview.

Limitations

• Has the 3 years limitation period expired? If so the solicitor should consider issuing protective proceedings immediately.
• Or request for the limitation period be disapplied.
• When was the client aware of his injury and cause of action.

Steps to be taken to kick start RTA claim:

1. Get the CFA signed
2. Gather evidence (medical records)
3. Issuing letter of claim.
4. Contact witnesses.
5. Deal with any mitigating losses.
6. Consider money laundering.
7. Do an MID search or DVLA search.
8. Obtain a police accident report, from the Criminal Justice Support team.
9. Instruct a doctor
10. Proof of Evidence

Pre-action protocol -Letter of claim: Nominate a medical expert to be agreed by both parties and draft a schedule of loss.

Children

The Welfare Principle must be considered by a court when making an order in regards to a child: “The childs welfare is paramount consideration” (s1 (1)).

The Statutory Checklist under section 1(3) of the Children Act 1989 the court must have regard in particular to:-

1. The ascertainable wishes and feelings of the child concerned (considered in the light of his age and understanding)
2. His physical, emotional and educational needs
3. The likely effect of any change in his circumstances
4. His age, sex, background and any characteristics of his which the court considers relevant
5. Any harm which he has suffered or is at risk of suffering
6. How capable each of his parents, and any other person in relation to whom the court considers the question to be relevant, is of meeting his needs
7. The range of powers available to the court under this Act in the proceedings in question.

Parental Responsibility (PR): all the rights, duties, powers, responsibilities and authority which by law a parent of a child has in relation to the child and his property (s3 (1) CA 1989). It gives the parent responsibility for taking all the important decisions in the childs life. However ‘parental authority ceases in respect of any aspect of a childs upbringing about which the child himself is sufficiently mature to make decisions for himself’ (Gillick v West Norfolk & Wisbech Area Health Authority [1986]).

Section 8 orders usually made in respect of children are:

• Residence Order: Settles with whom a child shall live. Usually with someone who has PR, but can be made to a non-parent which will automatically grant them PR for as long as the residence order is in affect (s12, CA 1989). A residence order can be made to more than one party (shared residence) where the court will specify the number of weeks and holidays the child spends with a particular parent. HOWEVER they court shall only do this where it is within the welfare of the child to do so.

• The RO provides the child cannot be known by any new surname without: (1) written consent from everyone with PR, or (2) permission from the court.
• Also where a RO is in force no one can remove the child from the UK for longer than a month without either: (1) written consent of everyone with PR, or (2) leave from the court.
• Breach of a RO is contempt of court and an offence under the Child Abduction Act 1984.

• Consent Order: Requires the person with whom the child lives to allow child to have contact with person named in the order. There is a presumption in favour of the child having contact with both parents unless there’s a good reason NOT to. Courts will look at circumstances to determine the level, frequency and duration of contact or even left as ‘reasonable contact’ to allow the parties to decide themselves. ALTHO a contact order can also be made to prevent contact with someone (Nottinghamshire County Council v P [1993]) alternatively this also be achieved by a prohibited steps order.

• Where there has been violence, the court mist consider: (1) the past and present conduct of both parties, (2) the effect of the violence on the child and the residential parent, (3) the motivation of the parent seeking contact and (4) in cases of serious domestic violence, the ability of the offending parent to recognise his past conduct and be aware of the need to change & make a genuine effort (Re K (Contact: Mothers Anxiety) (1999)).
• Violence usually establish by holding a fact finding hearing; which once decided can not be disputed.

• Prohibited Steps Order: directs that a certain step which would otherwise be exercised in PR shall not be taken by that person without the permission of the court. The prohibited action must be specified in the order. Prohibited steps order is limited to matters which come within PR.
• Specific Issue Order: gives directions in order to determine a specific question or to resolve a specific dispute over exercising PR. Usually used to settle arguments over:

• School child should attend.
• Medical treatment child is to receive.
• Religious upbringing.

The ‘no order’ presumption under s 1 (5) of the CA 1989:

“The Court shall not make any order… unless it considers that so doing would be better for the child than making no order.”