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Category: Company & Commercial

Common sense should apply when interpreting business contracts

Common sense should apply when interpreting business contracts

Delivering the ruling, Lord Clarke said: “If there are two possible constructions, the court is entitled to prefer the construction which is consistent with business common sense and to reject the other.” The issue arose in the case of six separate companies that had each contracted to buy a ship for $33m from a Korean…

Government calls time on unfair practices that restrict pubs

Government calls time on unfair practices that restrict pubs

The proposals have been put forward by the Department for Business, Innovation and Skills (BIS) and are in response to the Select Committee’s Report on Pub Companies. They set out the details of a strengthened, legally binding Industry Code which it’s hoped will improve the relationship between pub companies and licensees. A BIS statement highlighted…

Directors disqualified after failing to keep company records

Directors disqualified after failing to keep company records

The company was placed in administration in 2009 with an estimated deficiency of £1.3m. It was then investigated by the Insolvency Service which was unable to find any of the cars listed on the company’s books. The case went to Crewe County Court, which found that the directors had failed to ensure that the company…

New proposals to allow more firms to avoid audits

New proposals to allow more firms to avoid audits

EU regulations list three criteria by which firms can be regarded as small for accounting purposes. These are: no more than 50 employees balance sheet total no more than £3.26m no more than £6.5m in turnover To obtain an exemption in the UK, companies must currently fulfil both the balance sheet and turnover criteria. The…

When shareholders fall out and refuse to meet …

When shareholders fall out and refuse to meet …

The issue arose in a case involving a taxi firm that had two shareholders who were also both directors. The minority shareholder played no active part in the business but her husband worked as the accounts manager. The majority shareholder discovered that the accounts manager was withdrawing money on a monthly basis without authorisation. He…

Accountant must pay for enticing away former clients

Accountant must pay for enticing away former clients

For this reason, most firms will insist on a covenant preventing the seller from setting up a rival business or soliciting his former customers for a specified period. The value of this approach was illustrated in a recent case before the High Court. It involved an accountant who decided to sell his business. The buyer…

Businesses failing to protect themselves against late payers

Businesses failing to protect themselves against late payers

A survey of ICM members found that a quarter of them don’t use the payment performance data provided by B2B credit reference reports. Researchers also found that two thirds of businesses don’t share payment performance data about their customers with credit reference agencies. This is in spite of the fact that three quarters of them…

Contract terms means English company must apply Indian law

Contract terms means English company must apply Indian law

Failure to do so could prove costly, as one UK company recently discovered. The company entered into an agreement with an Indian supplier to provide it with condoms to be sold in the UK. It was part of the company’s standard terms and conditions that disputes with foreign partners should be settled under English law….

Surge in number of firms facing critical difficulties

Surge in number of firms facing critical difficulties

The Red Flag Report produced by Begbies Traynor shows that 186,554 UK businesses were experiencing significant or critical financial problems in the first quarter of this year. That was a 15% increase on the same period in 2010. Sectors that are dependent on discretionary spending were the worst affected. Taken year on year, the number…

Penalties imposed on construction firms ‘were too harsh’

Penalties imposed on construction firms ‘were too harsh’

The Tribunal said it was important to make a distinction between simple cover pricing and bid rigging, which is much more serious. Bid rigging involved firms joining forces as a cartel in order to enable one of them to win a contract at a lucrative rate. Cover pricing was less damaging. It usually happened when…