Business Services Glossary

  • Damages
    A term used to describe the compensation sought and obtained for a breach of contract terms by one party against another.

  • Due Diligence
    the process by which a buyer of or an investor in a company or business investigates the records of the target to support its value and find out whether there are matters on which it requires further information or which it should use as a platform to renegotiate the price. In the acquisition of a business, reports from accountants and legal advisers are usually prepared to record the findings of the legal and financial due diligence process. The due diligence process is supported by warranties and indemnities in the acquisition agreement.

  • Exclusion Clause
    a clause that restricts or excludes liability for an act or omission that may be committed or omitted by a party to a contract the result of which could adversely affect the other.

  • Force Majeure
    the happening of an event outside the control of the parties, for example, natural disasters or the outbreak of hostilities. It is usual for parties to provide in a contract that such events will not make the defaulting party liable if they prevent it from performing its obligations.

  • ILA
    Independent Legal Advice. It is of paramount importance that all parties to a contract have impartial legal advice therefore parties with potentially competing interests cannot be advised by the same lawyer or firm of lawyers.

  • Indemnity
    an undertaking by one person to meet a specific potential legal liability of another. An indemnity entitles the person indemnified to a payment if the event giving rise to the indemnity takes place.

  • LLP
    it is neither a partnership nor a company. Like a company, an LLP is a body corporate and therefore a separate legal entity and an LLP member’s liability is limited. However, like a partnership the relationship between the LLP members is governed by private agreement. An LLP does not have shareholders or directors and is taxed like a partnership.

  • MBI
    Management Buy In

  • MBO
    Management Buy Out

  • ROT
    Retention of Title when in a contract prevent “title” in goods passing to the buyer until payment has been received in full.

  • UCTA
    Unfair Contract Terms Act 1977

  • Warranty
    a contractual promise or assurance which if breached will give rise to a claim for damages.

Whatever your legal query, Franklins Solicitors have the know how to help guide you through the maze of life.