PROJECT FINANCE LAWYERS

The Most Common Disputes That Project Finance Lawyers Come Across Are Over the Terms and Enforceability of Long Term Take or Pay Contracts

The Most Common Disputes That Project Finance Lawyers Come Across Are Over the Terms and Enforceability of Long Term Take or Pay Contracts

Introduction

This study discusses disputes task finance lawyers arrive across over the terms and enforceability of long period take or pay contract. Traditionally, there has been little consensus in the United States regarding the terms and enforceability of long period take or pay contracts in the workplace. For businesses to flourish, pay contracts must be able to depend on commitments. Sometimes, task is successfully resolved only on a handshake (“my phrase is my deed”), such that neither party feels the require to verify that the firm promise will be enforced by the law should the other party fail to hold his or her word. However, if the firm promise is a large one (Creti and Villeneuve 2004, 75-94), if the parties are strangers, or even if they are just cautious, either or both of them may want to verify that the agreement will be enforced by a court should something proceed wrong. Parties require to be free to contract according to their own best interest, but they also require to be free from being obligated unless they specifically propose to be obligated and they understand those obligations. Contract law systems attempt to balance these ethical and practical considerations (Hubbard and Weiner 1986, 71-79).

The dynamic, long-term nature of a contract of employment means that the contract will constantly change. These changes, however, will have to be compliant with the rules regulating the alteration of contracts of employment. Technical legal difficulties may arise because alterations within the contract of employment do not comply with the requirements to the alteration of contractual rights.

Changes can be made in the terms and conditions of a contract of employment in one of a number of ways: (1) By variation supported by consideration; (2) where there is a specific clause in the contract permitting alteration of terms and conditions; (3) or (where this does not infringe the Unfair Dismissals Act, 1977-2007) by dismissal followed by re-engagement.

The conditions to lawful variation of a contract of employment

The two essential conditions to lawful variation of a contract of employment are: (a) consideration and (b) consent.

Acceptance must be deliberate. In Cowey v. Liberian Operators Ltd the employer wished to secure the employee's consent to a reduction in the period of notice prior to dismissal, from three months to one month. The proposed change was inserted in an office memorandum which was passed around, and initialled by the staff, including the employee in question. The plaintiff, who had just been induced to join in a senior capacity, and had been promised a three months notice period, assumed the memorandum could not have been intended to refer to him, and that the proposal must have been intended to refer to junior employees such as short hand ...