Courts to operate during lockdown

The Lord Chief Justice and the Senior President of Tribunals  have confirmed that the work of the courts and tribunals will be exempt from the latest restrictions in England announced on 31 October 2020. The exemption was confirmed in a message published on 1 November 2020.

In their message they urged judges and magistrates to make full use of the measures put in place to reduce footfall in courts so cases can be dealt with as efficiently as possible. They stated that ‘It is vital for the well-being of the country that the administration of justice continues to operate’.

Coronavirus (COVID-19)—BPF publishes licence to occupy

The British Property Federation (BPF) has published aLicence to Occupy to assist the NHS and associated organisations as they deal with pressures on their facilities and infrastructure  brought about by the spread of COVID-19. The Licence to Occupy is aimed at helping the NHS occupy new commercial properties on a temporary basis in the fight to combat the spread of COVID-19. 

A template of the Licence to Occupy which can be obtained from the BPF’s website seeks to make it easier for the NHS to find additional space, set up new facilities and work with multiple property owners at the same time.

The BPF has taken into consideration the speed at which healthcare providers may wish to secure commercial properties without undue delay during these unprecedented times. The template produced by BPF aims to expedite the process, having regard to the interests of both the licensee and licensor. 

Parties should seek specialist advice before adopting the terms of the template, especially as certain provisions within the template may not be suitable for certain transactions. 

Lasting powers of attorney


Lasting powers of attorney (LPA) permits the appointed attorney to deal with the donor’s affairs and make certain decisions on behalf of the donor. There are two types of LPA (1) financial and property affairs LPA, and (2) health and welfare LPA. 

Scope of LPA 

In order to grant an LPA the donor must be over the age of 18 and must have capacity at the time the LPA is executed. A donor may appoint more than one attorney under the same LPA. If more than one attorneys are appointed the attorneys may be required to act together in making certain decisions.

Under the financial and property affairs LPA the attorney can pay the donor’s bills, sell the donor’s property, and operate the donor’s bank accounts. The financial and property affairs LPA can be used even where the donor still has capacity provided the donor does not specify otherwise. 

On the other hand, the health and welfare LPA can only be used when the donor loses capacity or the appointed attorney reasonably believes that the donor has lost capacity. Under the health and welfare LPA the attorney can make decisions concerning the donor’s medical treatment, diet, and where the donor lives. The attorney cannot make decisions concerning life-sustaining treatments unless the donor permits the attorney through the LPA. 

The donor is able to limit the powers granted to the attorney and express preferences on the LPA. Preferences expressed on the LPA are not strictly binding on the attorney.

Registration of LPA

An LPA must be registered with the Office of the Public Guardian (OPG) before it can be used. An unregistered LPA does not give the attorney any legal authority to make a decision for the donor and acting without registration can expose the attorney to liability. 

An attorney will not be liable if the attorney acts within the provisions of a registered LPA that is later discovered to be invalid, unless the attorney was aware that the LPA was invalid or knew of circumstances that terminated their authority under the LPA. 

Termination of LPA

A donor is able to revoke an LPA at any time while the donor has capacity — the donor should follow the prescribed procedure and the attorney(s) should be notified of the revocation. 

A property and financial affairs LPA will automatically terminate if the donor is made bankrupt or the donor is subject to a debt relief order. The LPA will be suspended but not automatically terminated if there is an interim bankruptcy restrictions order or where the donor is subject to an interim debt relief restrictions order. The suspension of the LPA will last for as long as the order remains in place. The LPA will also terminate when the donor dies.

The appointment of an attorney will be terminated if any of the following events occurs:

  1. The attorney dies 
  2. The attorney disclaims their appointment 
  3. The attorney becomes bankrupt or subject to a debt relief order
  4. The attorney is a trust corporation that wound up or dissolved
  5. The marriage or civil partnership between the donor and the attorney is dissolved or annulled (subject to the provisions of the LPA)
  6. The attorney loses capacity to act. 

If any of the six events mentioned above occurs then the LPA may also terminate unless the attorney affected was appointed jointly rather than jointly and severally and there is no provision in the LPA for a replacement attorney.

House of Fraser settles case with landlords

House of Fraser can now focus its efforts on rescuing its struggling business after the department store reached an out-of-court settlement with its landlords. House of Fraser would have had to defend the lawsuit in the Edinburgh Court of Session next week if it had not reached a deal with the group of landlords.

The legal challenge brought by the landlords relates to a company voluntary arrangement (CVA) which was approved by House of Fraser’s creditors in an effort to keep the department store in business, albeit, with 6,000 job losses and the closure of 31 of it 59 stores, including its flagship store on Oxford Street. 

The landlords brought the legal action arguing that the terms of the CVA prejudiced their interests and treated them unfairly. The deal between House of Fraser and the group of landlords was reached over the weekend, the terms of which are confidential. This settlement will no doubt allow House of Fraser to focus on securing investments to keep the business afloat.

Unfair Consumer Contract Terms

Consumer Rights Act 

The Consumer Rights Act 2015 is a very important piece of legislation that provides several levels of protection to consumers in the UK. The legislation came into force on 1st October 2015 and it consolidated consumer protection laws — it replaced the Sale of Goods Act 1979, Unfair Terms in Consumer Contracts Regulations 1999 and the Supply of Goods and Services Act 1982. The 2015 Act enhances and expands consumer protection that already existed under the Unfair Contract Terms Act 1977.

Consumer contracts 

The Consumer Rights Act deals extensively with the sale and supply of goods and services between traders and consumers. The sale of digital contents is also covered by the Act. The Consumer Rights Act applies to both written and oral contracts. This article focuses on unfair consumer contract terms as set out in Part Two of the Consumer Rights Act 2015. The primary purpose of this part of the legislation is to ensure that traders do not insert, into their consumer contracts, terms that are unfair in the eyes of the law. It is important to note that the Consumer Rights Act does not provide blanket protection to consumers. Although the law has provided an extensive (but non-exhaustive) list of terms that may be regarded as unfair, it is vitally important that you properly review any contract before agreeing to the terms because the law does not consider all disadvantageous contract terms as unfair. 

Meaning of unfairness 

Under the Consumer Rights Act, a consumer contract term is unfair if it causes significant imbalance in the parties’ rights and obligations under the contract to the detriment of the consumer. Thus, if the term is “one-sided” in favour of the trader and to the detriment of the consumer then that term may be regarded as unfair under the Consumer Rights Act 2015. 

Having established that the Consumer Rights Act regards certain contract terms as unfair, the natural question that must follow is which contract terms are regarded by the law as unfair. Under the 2015 Act, there are two distinct types of unfair contract terms, contract terms that may be regarded as unfair and contract terms that must be regarded as unfair. 

Contract terms that must be regarded as unfair 

Any consumer contract term that places the burden of proof on the consumer with regards to compliance by a distance supplier or intermediary with an obligation under the Distance Marketing Directive must be regarded as unfair. Distance marketing relates to the sale of pensions, mortgages and other financial services products by email, telephone, fax, mail, or online. 

The law limits the types of consumer contract terms that must be regarded as unfair contract terms (only distance sale of financial products and services fall within this category). The vast majority of other consumer contract terms may be regarded as unfair, but they are by no means automatically unfair under the Consumer Rights Act. In fact, some contract terms will not be regarded as unfair regardless of how detrimental they may appear to the consumer if the detrimental terms relate to the fairness of the price payable under the contract in comparison to the goods or services supplied or if the term of the contract in question is transparent and prominent. 

Contract terms that may be regarded as unfair 

The following are some of the terms in a consumer contract that may be regarded as unfair if they relate to:

  1. Excluding or limiting the trader’s liability in the event of death or personal injury of the consumer as a result of the trader’s act or omission.
  1. A term which permits the trader to increase the price of goods and services without giving the consumer the right to cancel the contract if the final price is much higher than the price agreed when the contract was concluded.
  1. Requiring the consumer that breaches the contract to pay a disproportionately high sum in compensation.
  1. Irrevocably binding the consumer to terms of a contract if the consumer did not have a real opportunity of becoming acquainted with the terms before the conclusion of the contract.
  1. Permitting the trader to determine the characteristics of the subject matter of the contract after it has become binding on the consumer.
  1. Excluding or limiting the rights of a consumer in the event that the event of total or partial non-performance or inadequate performance of the contractual obligations by the trader.
  1. Permitting the trader to retain monies paid by the consumer where the consumer decides not to proceed with the contract without compensating the consumer if the trader cancelled the contract.
  1. A term that makes an agreement binding on a consumer where the provision of services by the trader under the agreement is subject to a condition that depends solely on the will of the trader for its realisation.
  1. Permitting the trader to transfer the trader’s rights and obligations under the contract where the transfer may reduce the guarantees for the consumer without the consumer’s agreement.
  1. A term requiring the consumer to fulfil all of the consumer’s obligations under the contract where the trader does not perform the trader’s obligation.

A more detailed list of consumer contract terms that may be regarded as unfair can be found here. The list is not exhaustive and other detrimental terms may also be regarded as unfair. 

Effects of unfair consumer contract terms 

Contract terms that are regarded as unfair will not be binding on the consumer. However, the remaining terms of the contract will remain binding insofar as they are practical.                         

Tenancy Deposits in Relation to Possession Proceedings

Pursuant to section 213 of the Housing Act 2004 any deposit paid to a landlord in connection with the tenancy must be dealt with in accordance with an authorised tenancy deposit scheme. 

Under the Housing Act 2004 landlords must protect the deposit received from tenants within 30 days from the date the deposit was received by the landlord. Simply protecting the deposit with an authorised scheme does not fully comply with the requirements set out in section 213 of the Housing Act 2004. In addition to protecting the deposit within 30 days of receipt, a landlord must also give the tenant certain information relating to the authorised scheme where the deposit is protected. The information about the authorised deposit scheme must confirm the landlord’s compliance with the requirements of the scheme.

The information the landlord gives to the tenant must also provide details about the operation of the authorised scheme and must be contained in the prescribed form or in a form ‘substantially’ similar to the prescribed form. Pursuant to section 213(6)(b) of the Housing Act 2004 the prescribed information that landlords must give to their tenants must be given to the tenant within 30 days from the date the deposit was received by the landlord. 

Thus, the Housing Act 2004 requires landlords to protect any deposit received from their tenants and then give their tenants prescribed information about the operation of the deposit scheme. Both requirements must be completed within 30 days of receiving the deposit from the tenant. 

Landlords who fail to comply with the requirements to protect as set out in section 213 of the Housing Act 2004 may be subject to legal proceedings. Where a court is satisfied that the landlord has not complied with the protection requirements, the court must order the person holding the deposit to return the deposit to the tenant. In addition to returning the deposit, the court must order the landlord to pay the tenant an amount of between one and three times the amount of the deposit as a penalty for failing to comply with the requirements to protect and give the tenant prescribed information within 30 days of receiving the deposit. 

Further, section 215(1A) of the Housing Act 2004 prevents a landlord from giving a section 21 notice to their tenant if the landlord has not complied with the deposit protection requirements. If a landlord wishes to give a tenant a section 21 notice but has failed to protect the deposit and give the prescribed information to the tenant within 30 days, then the landlord may either return the deposit or protect the deposit and give the prescribed information to the tenant prior to giving the tenant the section 21 notice. Nonetheless, the tenant is still entitled to pursue the landlord for a monetary award for failing to comply with the requirements to protect the deposit within the 30-day limit. 

If a landlord seeks possession of their property on the grounds of rent arrears but failed to comply with the requirements to protect the deposit, then the landlord may be subject to a counterclaim of up to three times the amount of deposit received. If the tenant is successful in their counterclaim, the monetary award to the tenant will be set off against the rent arrears claimed by the landlord. This is important because if the rent arrears are reduced below a certain level after the set off then the landlord may not be entitled to possession as a matter of law. 



Legal Tips from Top Business Lawyers

Lorem ipsum dolor sit amet, consectetuer adipiscing elit, sed diam nonummy nibh euismod tincidunt ut laoreet dolore magna aliquam erat volutpat. Ut wisi enim ad minim veniam, quis nostrud exerci tation ullamcorper suscipit lobortis nisl ut aliquip ex ea commodo consequat. Duis autem vel eum iriure dolor in hendrerit in vulputate velit esse molestie consequat, vel illum dolore eu feugiat nulla facilisis at vero eros et accumsan et iusto odio dignissim qui blandit praesent luptatum zzril delenit augue duis dolore te feugait nulla facilisi. Sed ut perspiciatis, unde omnis iste natus error sit voluptatem accusantium doloremque laudantium, totam rem aperiam eaque ipsa, quae ab illo inventore veritatis et quasi architecto beatae vitae dicta sunt, explicabo.

Sed ut perspiciatis, unde omnis iste natus error sit voluptatem accusantium doloremque laudantium, totam rem aperiam eaque ipsa, quae ab illo inventore veritatis et quasi architecto beatae vitae dicta sunt, explicabo. nemo enim ipsam voluptatem, quia voluptas sit, aspernatur aut odit aut fugit, sed quia consequuntur magni dolores eos, qui ratione voluptatem sequi nesciunt, neque porro quisquam est, qui dolorem ipsum, quia dolor sit, amet, consectetur, adipisci velit, sed quia non numquam eius modi tempora incidunt, ut labore et dolore magnam aliquam quaerat voluptatem. ut enim ad minima veniam, quis nostrum exercitationem ullam corporis suscipit laboriosam, nisi ut aliquid ex ea commodi consequatur? quis autem vel eum iure reprehenderit, qui in ea voluptate velit esse, quam nihil molestiae.

Grounds for Possession 

Landlords are well aware that obtaining possession of their properties could sometimes involve a difficult and somewhat confusing process. Most tenancies issued today are Assured Tenancies. The laws governing the repossession of assured tenancies are contained in the Housing Act 1988. Specifically, Schedule 2 of the 1988 Act sets out the grounds on which landlords may seek possession of their property.

Schedule 2 of the Housing Act 1988 can broadly be divided into mandatory and discretionary grounds for possession. There are about 17 grounds for possession. Grounds one to eight are contained in Part 1 of the Schedule 2 and are considered as mandatory grounds for possession. If a landlord meets the strict requirements of a mandatory ground and has properly complied with the correct procedure then the court must make an order for possession against the tenant and in favour of the landlord. Grounds 9 to 17 are the discretionary grounds for possession. The discretionary grounds can be found in Part 2 of the Schedule — they give a court broad discretionary powers to make an order for possession. It is often more difficult to convince judges to exercise their discretion to make an order for possession against a tenant. Thus, when possible, you should proceed under one or more mandatory grounds which will entitle you to an order for possession against the tenant, provided you have complied with the prescribed procedures. This article focuses on the mandatory grounds for possession.

Mandatory Ground 1 — This ground may be used where a landlord permitted a tenant to live in the landlord’s property. At the beginning of the tenancy, the landlord informed the tenant in writing that the landlord may rely on this ground in seeking possession of the property. Further, the landlord may proceed under this ground for possession if the landlord seeks possession of the property in order to make the property their home and the landlord gave notice at the beginning of the arrangement that they may seek possession on this basis.

Mandatory Ground 2 —  If prior to the commencement of the tenancy the property was subject to a mortgage and the mortgage company now wants to sell the property for any valid reason, then the landlord may seek possession in order to allow the mortgage company sell a vacant property.

Mandatory Ground 3 — A landlord may seek possession of their property where the property was occupied by the tenant for the purpose of a holiday, and the tenant was given a tenancy for a fixed term of no more than eight months. In order to rely on this ground, the landlord is required to have given a written notice to the tenant at the beginning of the tenancy confirming that possession of the property may be sought under this ground.

Mandatory Ground 4 — This ground deals with student lettings. A landlord may seek possession under this ground if the landlord granted a tenancy to students for a period of 12 months or less. In order to rely on this ground for possession, the landlord must have informed the students in writing at the beginning of the tenancy that possession may be sought under this ground.

Mandatory Ground 5 — According to ground 5, a court must make an order for possession if the court is satisfied that the property is used for the purposes of providing accommodation for a minister of religion. In order to be successful under this ground the landlord must have given the tenant a written notice at the beginning of the tenancy stating that possession may be sought under this ground.

Mandatory Ground 6 — Landlords may seek possession under this ground if they can show that they intend to demolish the building or carry out substantial works and those works cannot reasonably be carried out while the tenant remains in occupation of the property. The key point here is that the work to be carried out is “substantial”.

Mandatory Ground 7 — This ground deals with tenancies that pass under a will or intestacy of the former tenant. A landlord may bring possession proceedings against the tenant if the tenancy is a fixed term or statutory periodic tenancy. Under this ground, the landlord is required to seek possession of the property within twelve months after the death of the former tenant.

Mandatory Ground 7A — Under this ground a landlord may seek possession of the property if the tenant or the tenant’s visitors have been convicted of a serious offence and the offence was committed in the property or in the locality of the property. There are several conditions that must be satisfied in order to successfully obtain possession under this ground. Please contact us if you have evidence that your tenant may have committed a serious offence or the tenant is subject to a court injunction.

Mandatory Ground 7B — As a landlord, you may seek possession of your property if you have been notified by relevant authorities that the tenant is not entitled to a tenancy due to their immigration status.

Mandatory Ground 8 — This ground deals with rent arrears. A landlord is entitled to a possession order if the landlord can prove that the tenant has failed to pay rent for at least eight weeks if rent is payable weekly. If rent is payable quarterly then the landlord must prove that at least one quarter’s rent (which must be the equivalent of at least three months’ rent) remains unpaid. In relation to rent payable monthly, this ground requires that at least two months’ rent is unpaid. For rent payable yearly, the landlord must prove that at least three months’ rent is unpaid.



Please contact us if none of the mandatory grounds mentioned above applies to your situation and we will be happy to advise you. We can also advise on discretionary grounds for possession. 

Employment Law Case Review



This case looks at the “reasonable adjustments” that an Employment Tribunal can be expected to make for a disabled party pursuant to section 20 of the Equality Act 2010. It also considers the need for an Employment Tribunal Judge to cause a telephone call to be made to enquire about the absence of a party at a hearing. 


The Claimant started working for the Respondent in 2006. In October 2011 he was diagnosed with having depression and was off work on several occasions starting in January 2013. Whilst still absent from work due to health problems in 2014 the Claimant brought a claim against his employers (the Government Legal Department) for race discrimination, harassment, victimisation and breach of section 10 Employment Relations Act 1999. 

In November 2014 the Claimant was examined by a consultant occupation physician who concluded that the Claimant’s condition did not amount to a disability under the Equality Act 2010. However, the physician indicated that the Claimant’s symptoms may amount to a disability if it did not improve over the next few months. The Claimant was off work intermittently but did not return to work again after December 2015.


In 2016 the claim was heard at the Employment Tribunal. The hearing ran for 14 days and the Claimant represented himself. During the course of the hearing, a psychiatrist gave evidence stating that the Claimant has “a psychiatric condition with high levels of anxiety as the main symptom.” The psychiatrist mentioned that the process of representing himself is likely to have a detrimental effect on his mental health.  

The Claimant argued that his employers attempted to force him into early retirement due to ill health (“ill health retirement”). The Tribunal found no evidence to support that claim. In fact, the tribunal dismissed all the Claimant’s claims. 

In April 2016 the Claimant was again assessed by another consultant occupational physician who concluded that the Claimant was unfit for work and was likely to remain permanently unfit to continue his job at the Government Legal Department. The Claimant retirement age was 60 and he turned 60 in February 2016 (during his Employment Tribunal hearing).


Following the dismissal of the Claimant’s claims after the initial 14-day hearing that concluded in February 2016, the Claimant brought another claim in October 2016 for unfair dismissal, race and disability discrimination. It appeared to the Tribunal that the second claim was regarding issues that had already been litigated at the initial hearing.  

In November 2016 the Tribunal ordered the Claimant to provide a schedule of loss, but the Claimant failed to provide the schedule. A date was then scheduled for a preliminary hearing — the Claimant asked for an adjournment because he needed more time and in order to obtain legal advice. This request was denied by the Employment Judge on the grounds that the Claimant has not provided any medical evidence to support this request. On the day of the preliminary hearing, the Claimant was 45 minutes late. He explained to the Judge that he misread the hearing time on the notice of hearing.

At the preliminary hearing, the Judge made a number of orders requiring the Claimant to provide details particularising his claim for race and disability discrimination. He was also ordered to provide further details in relation to the pay he was claiming. The Claimant complied with some aspects of the order but did not particularise his claims for race and disability discrimination as ordered by the Judge. At the preliminary hearing, the Judge encouraged the Claimant not to delay proceedings and highlighted places where the Claimant may be able to obtain free legal advice and assistance. 

In February 2017 the Claimant applied to stay proceedings until he obtained legal advice. This application was denied by an Employment Judge. The Judge also made an unless order. The unless order provided that the race and disability claims would be struck out unless the Claimant particularised those claims before a specified date. The order also stated that the monetary claims would be struck out within 12 days unless the Claimant provided “persuasive reasons” why the money claims should not be struck out. The Claimant did not particularise his claims for race and disability discrimination and did not provide “persuasive reasons” why the monetary claims should not be struck out. As a result of non-compliance with the unless order the claims for race and disability discrimination and the monetary claims were all struck out.

In March 2017 the Claimant asked the Tribunal to reconsider the strike out decision. In effect, the Claimant suggested that he could not conduct the proceedings due to his ill health and that he required legal assistance for which he was still searching. The Employment Judge ordered the Claimant to provide medical evidence to support his applications to stay the proceedings and to reconsider the claims which were struck out. The Claimant provided medical reports which confirmed that he remained unwell and that the Tribunal proceedings were contributing to the stress that the Claimant was experiencing. Consequently, the application to stay the proceedings was rejected because the reports did not say that the Claimant was unable to comply with the directions or unable to attend the preliminary hearing. The Claimant repeated his application to stay the proceedings on the basis of his poor health and his difficulty in dealing with complex legal proceedings due to his poor health. This further application was also rejected.

A preliminary hearing was later held on 31 May 2017, but the Claimant did not attend this hearing. The Claimant said that he did not attend the hearing because the notice of hearing referred to the Judge sitting alone. Although this meant that the Judge will sit without lay members the Claimant said that he assumed that the parties were not required to attend that hearing. The Judge proceeded with the hearing in absence of the Claimant.


On appeal, the Claimant argued that the Tribunal failed to make reasonable adjustments for his disability as required by section 20 of the Equality Act 2010. The EAT accepted the medical reports which concluded that the Claimant was unfit to work. However, the EAT held that the Claimant’s unfitness to work does not in itself mean that the Claimant was unable to attend the hearing. The EAT noted that the medical reports did not say that the Claimant was unable to prepare written submissions or represent himself at a hearing. The fact that the Claimant represented himself at the initial 14-day hearing and prepared documents further indicate that the Claimant was indeed able to represent himself at the second hearing for which he was seeking a stay of proceedings.

Further, the EAT noted that the Employment Tribunal had made several reasonable adjustments, including informing the Claimant of possible sources of legal advice and assistance, advising the Claimant not to delay the matter, issuing an unless order, converting one of the preliminary hearings to a telephone hearing, informing the Claimant that he needed to particularise his claims for race and disability discrimination, allowing the Claimant more time to provide medical evidence to support his application for a stay of proceedings. 

On the second ground of appeal, the Claimant contended that the ET Judge ought to have taken steps to ascertain why he had not attended the hearing on 31 May 2017. The EAT accepted the Claimant’s submission on this ground of appeal. The EAT held that there could have been several reasons why the Claimant did not attend the hearing on 31 May 2017, including mistake as to the requirement for him to attend, falling ill, transport-related problems, and misunderstanding of the time of the hearing (which had happened in relation to an earlier hearing). The EAT concluded that given these possibilities the Judge erred in law in failing to cause a telephone call to be made to the Claimant to enquire about his absence from the hearing. The ET Judge erroneously decided that the Claimant deliberately absented himself from the hearing. Nonetheless, the EAT held that this error of law has made no difference to the outcome because if the Claimant had attended the hearing on 31 May 2017 he would have repeated his application for stay of the proceedings and that application had no prospect of success.

The EAT found that the Claimant’s claim had no merit, especially as he still had not particularised his claim for race and disability discrimination. Also, the Claimant had not provided reasons for not striking out his claims or reasons for not striking out his unfair dismissal claim. Indeed, the EAT noted that the Claimant was attempting to revive issues that had already been litigated at the initial 14-day hearing which the Claimant is not entitled to do. The Claimant’s appeal was dismissed. 


Unenforceable Contracts in New York

To most organisations, contracts are pivotal to the success of their business. Whether an organisation is in the business of selling goods or services most viable businesses will engage the services of third parties at some point during the life of that business. Such third party services will often be governed by the law of contract. Therefore, it is important that businesses understand the key principles of contract, especially as it relates to their business or industry. This article focuses on contracts that are unenforceable in the state of New York, United States. New York is a global city and many organisations may have the need to do business in New York either directly or indirectly through third parties.

Among the many possible reasons why a contract in New York may be unenforceable, this article focuses on three key reasons why certain contracts will be void or voidable in New York.

Mutual Mistake — The general rule is that where parties to a contract entered into that agreement under a mutual mistake of fact, then that contract may be voided. In order to rely on a mistake of fact as the basis of voiding a contract, the mutual mistake must be fundamental and go to the heart of the agreement. It is not enough to void a contract on this basis if the mutual mistake was merely superficial and not substantial enough to affect the performance of the contract. It is also a requirement that the mistake existed at the time the parties entered into the contract. Thus, if the parties both had a mistaken belief that it is fundamental to the performance of the agreement the contract will be voidable by the party to be charged and thus subject to recession or reformation.  

Unconscionability — This generally relates to the fairness of a contract. In assessing whether a contract is unconscionable you look at the substance of the contract and/or the procedure of formation. A contract may be made unconscionable either by the unfair terms of the contract or by the unfair procedure engaged in the formation of the contract. A contract may be deemed unconscionable if a party to the contract is denied reasonable choice in relation to the terms of a contract and the terms of the contract are unreasonably more favourable to the other party.

New York law prohibits fraudulent or deceptive business practices as these are contrary to public policy. Thus, any contract that is fundamentally deceptive or misleading will be contrary to public policy and will be unenforceable. There are indeed other reasons why the enforcement of a contract may be contrary to public policy such as exemption from liability in negligence, excessive interest rate, and the commission of misdemeanour or felony. 

Statute of Frauds — The statute of frauds provides that in order for certain contracts to be valid and enforceable they must be evidenced in writing. A contract made in consideration of marriage must be reduced to writing to be valid. However, there is no requirement for a written contract if there is a mutual promise between the parties to marry. Further, if a contract cannot be performed within one year or performance cannot be completed within a lifetime then such contracts will not be enforceable unless they are put in writing. For example, any lease exceeding one year will be void unless the contract is in writing. A contract that can reasonably be performed within a year but which actually takes longer than a year to complete will still be valid even if it is not in writing. 

Further yet, a contract that guarantees a debt must be in writing in order to be enforceable. An agreement to compensate a party for services rendered in the negotiation of a loan must also be writing in to be enforceable. The statute of frauds rule applies to an agreement to compensate a party for negotiating the rental, sale, lease or exchange of real estate; therefore such an agreement must be in writing if it is to be enforceable. However, there is no requirement to reduce an agreement to writing in order for it to be enforceable if the agreement is to compensate an attorney or a licensed real estate salesman or broker in relation to the sale, lease or rental of real estate. 



Contract law can be complex with far-reaching consequences — please contact us if you require more information on this topic.

25 Cabot Square, Canary Wharf, London E14 4QZ 

Copyright © Pernerley 2022. All Rights Reserved.