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Where different works
The contract between a landlord and tenant will make provisions for the property to remain in good repair and condition. Take a look at the reasons why it is important to be aware of dilapidations. 

A landlord will be keen to make sure that the property is managed properly and that, come the end of the lease term, the property is in the same condition as at the start of the lease. Otherwise, the landlord may struggle to find a subsequent tenant or may not be able to achieve enough rent. It is for this reason that the landlord will want to include within the lease a requirement for the tenant to keep the property in good repair and condition.

If the landlord is unable to let the property after the end of the term due to the tenant having failed to comply with its repairing obligations then the tenant may face a claim from the landlord for breach of contract.

When acquiring property, either under a new lease or by taking an assignment of an existing lease, it is essential that a tenant obtains proper advice. In order to reduce the risk of a potential claim at the end of the term it would be prudent to consider the following at the outset:
  • Potential costs – Ensure that financial provision is made. This may involve getting a survey commissioned by a surveyor in order that the potential costs are properly assessed.

  • A detailed schedule of condition – This should be appended to the lease and should set out the condition of the property at the start of the lease, thereby limiting the extent of work that can be claimed by the landlord to be required to put the property right at the end of the term.

  • Items already in disrepair – Despite the inclusion of a schedule of condition, certain items of disrepair which pre-exist the lease cannot be ignored for the duration of the term. In these circumstances the tenant would be better placed by taking a sum of money from the landlord or insisting that the landlord puts the property into good repair before the lease is signed.
If these issues are identified and dealt with there is one less reason for cracks to form in the relationship between landlord and tenant.
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Things are not always what they seem. Sometimes, what appears to be an agreement is not in fact binding. On the other hand, a binding agreement can be made without the parties realising it. So, when do you have a binding contract?

A contract is formed when the parties have agreed on its essential terms. There are no particular formalities required to create a binding contract. It is possible to create a contract orally or by conduct, as well as in writing. 

A formal agreement is not always required. The parties may agree terms with the intention of preparing a formal document at a later date and it is often assumed that there is no binding agreement until then. That may not be the case. The Court will look at the parties’ words and conduct to determine whether it was intended they would be bound immediately or only after preparation of a formal document. Marking correspondence as ‘subject to contract’ will give an indication that the parties do not intend to create a binding contract. 

Sometimes parties will agree ‘heads of terms’ or ‘heads of agreement’ as a pre-cursor to a full written agreement. Generally, these documents are not intended to be binding but the Court may find that the parties did intend to be bound based on their words and conduct. Again, using the ‘subject to contract’ label will assist in demonstrating that the document is not intended to be legally binding until a formal agreement is prepared. 
It is common for parties to agree terms ‘subject to contract’ and then begin performing their obligations before a formal contract is in place. It can then be unclear whether the parties are acting on terms set out in pre-contract documentation; whether a contract has been concluded on more limited terms; or whether there is a binding contract at all. The outcome will depend on the particular facts of the matter. 

It may be that the parties have entered into a binding agreement, but that the terms are incomplete or it is too uncertain to be enforced. In those circumstances, the Court may find that there is no binding contract because the obligations are too uncertain and there is simply no way to determine what obligations the parties have. 
In order to be enforceable, an agreement requires ‘consideration’ to be provided by both parties. This is usually some form or payment or value. Where the obligations of one party are not sufficient to amount to consideration, payment may need to be made. It may also be necessary to have an agreement in the form of a deed.

Top Tips
  • Remember a contract can be made by email, orally or by conduct
  • Ensure all obligations under the contract are clearly defined
  • If it is necessary to start work earlier, ensure all key matters are agreed first
  • Ensure written agreements are signed by all parties
  • Mark all correspondence ‘subject to contract’
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Giedo Van der Garde had a contract to race for the Sauber F1 team in 2015. However, Sauber signed two other drivers instead of Van der Garde; Marcus Ericsson and Felipe Nasr.

Van der Garde successfully sued the Sauber F1 team on Wednesday. Sauber appealed.

Sauber lost their appeal on Thursday.

This morning Van der Garde initiated proceedings asking for the team’s assets to be seized and the team’s principal Monisha Kaltenborn to be sent to prison for contempt of court*.

It’s all a bit of a mess.

So, what does this have to do with the Rolling Stones? Well the final track of their 1969 album Let it Bleed, neatly sums up the situation here. The track is, for those who don’t already know, "You Can't Always Get What You Want”. However, the complete lyric is "but if you try sometime, you just might find you get what you need”.

This, in my view, is exactly the point here. Did Van der Garde really expect to be out on track racing this weekend? I doubt it. However, has he put himself in the strongest possible negotiating position by taking this action? Unquestionably.

Litigation strategy is all about tactics and securing what you're actually looking for; even if that is by seemingly not getting what you 'want'. At Legal Studio we understand that and we work with our clients to listen to their needs and tailor our advice and strategy accordingly.

So, although I can’t see an F1 boss sampling Australia’s prison food just yet, Van der Garde’s tactics seem to have secured him pole position at the negotiating table.

Ian

*For those who want to know more, I’d direct you to Adam Cooper’s F1 Blog here which is following all the latest twists and turns in real time from both the court and the track.

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