Imortance of recording Agreements in writing
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19 February 2009
Importance of having agreements
recorded in writing
Yeoman's Row Management
Ltd v. Cobbe.1  UKHL 55
above case highlights the importance of recording an agreement in
writing. If a full agreement cannot be reached then at least some
provisional heads of terms or memorandum of understanding ought to be
put in place so as to ensure there is some degree of certainty between
the contracting parties. As a lawyer I cannot stress this enough.
this case Lord Scott and Lord Walker made amongst other comments the
following: (a) the House's concern to ensure certainty in commercial
law by applying principles of law rather than subjective views of the
merits; and (b) the risks for commercial parties in trusting to honour,
or good will and leaving negotiations at the stage when no legally
binding contract has been created.
I advise all
clients to get the deal in writing or at least make sure that everyone
appreciates the risks that are being run if this is not done.
What should you cover in
a basic letter of intent?
This example is related to software
development and is purely for illustrative purposes:
- price to be paid, any extras. What will trigger a payment?
Link to milestones or achievements
- specification for the work, standards to be followed or
- scope of the work - any extras? Is there any form of
support or maintenance? - is that included?
- timelines and milestones for who is to do what and for when.
- are any third party contractors involved? What is the
relationship with them?
protection - who is responsible for what, how will the data be kept,
and will it remain within the EU or outside of this?
- is there any form of acceptance testing?
- hardware software requirements
- period of warranty for the build
- who will own the Intellectual Property Rights in what is
we have the answers to the above we will have a provisional agreement
which will also serve to assist in drafting the main contract between
(email@example.com). Izaz Ali is a commercial lawyer who
specialises in information technology law and intellectual property law
with an emphasis on IT, escrow and buying and selling online businesses.
About the Author
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Article Published/Sorted/Amended on Scopulus 2009-03-08 15:33:09 in Legal Articles