OnHand Counsel's The Business: Legal briefing 30 January 2014

In this issue:

What comfort is a comfort letter? Recent case

A guarantee

Interested in recovering interest and recovery costs?

Guest article: pension tension

In this series of legal briefings I update you about recent developments in corporate or commercial law. Some of these briefings will hopefully resonate with some of you some of the time. I explain some of the context and background law, and perhaps give some specific tips. And maybe ramble or even rant a bit.


What comfort is a comfort letter? Recent case
If you are doing business with any company you want to know they’ll be good for their obligations and won’t go bust on you. If you’re dealing with a subsidiary of a large successful company you might be prepared to overlook the subsidiary’s weak-looking financial position (assuming you’ve checked it out in the first place) provided that you are given what is known as a ‘comfort letter’ from the parent company.
But are comfort letters worth the paper they’re written on? Shouldn’t you be asking for a proper guarantee instead? Check out this recent case.

Rating system:
Reading time (1-10 minutes): 4 minutes
Sophistication level (1 (idiot) – 10 (expert)): 6
Entertainment value (1 (turgid) – 10 (side-splitting)): 5


A guarantee
On the subject of guarantees, here’s a precedent you could use for a clause to slot into an agreement between you and a customer.


Rating system:
Reading time (1-10 minutes): 2 minutes
Sophistication level (1 (idiot) – 10 (expert)): 7
Entertainment value (1 (turgid) – 10 (side-splitting)): 2


Interested in recovering interest and recovery costs?
I thought it would be topical (seeing as I have quite a few overdue bills owing to me at the moment) to pen a quick article about the late payment legislation. In particular, did you know that since March 2013 you can recover ‘reasonable costs’ in recovering the debt?

Rating system:
Reading time (1-10 minutes): 2 minutes
Sophistication level (1 (idiot) – 10 (expert)): 4
Entertainment value (1 (turgid) – 10 (side-splitting)): 6


Bonus guest article: pension tension
And finally, a short bonus guest article about one loophole in the recent proposed increases in pension ages


Rating system:
Reading time (1-10 minutes): <1 minute
Sophistication level (1 (idiot) – 10 (expert)): 1
Entertainment value (1 (turgid) – 10 (side-splitting)): 8


All the best,
Andrew James
OnHand Counsel Limited

This newsletter is provided free of charge for information purposes only. It does not constitute legal advice (even if it looks like it does) and should not be relied on as such. No responsibility for the accuracy and/or correctness (I’m not sure what the difference is but that’s what my precedent says) of the information and commentary set out here, or for any consequences of relying on it, is assumed or accepted by OnHand Counsel Limited or by any solicitor, employee or agent of OnHand Counsel Limited, ie particularly me. You have not paid me to provide it to you and I do not owe you any duty of care whatsoever so why should I be liable to you if you go away and do something wrong relying on what I have said in it. If you want to do something and want to rely on my advice, give me some money! Thank you for reading this far.

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