Q&As

To what extent can a group company bind its affiliates by including them in the party definition?

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Published by a ½Û×ÓÊÓƵ Commercial expert
Published on: 24 September 2018
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In approaching this, the steps to consider are as follows:

  1. •

    are the affiliates made party to the agreement by incorporating them in the definition?

  2. •

    if so, does the signatory have authority to sign on behalf of each affiliate?

  3. •

    if not, is there privity of contract or would the affiliate be able to enforce the terms of the contract?

Are the affiliates made a party to the agreement by incorporating them in the definition in this manner?

In an ordinary commercial context, it is not normally necessary to prove that the parties to an express agreement in fact intended to create legal relations. Absent proof to the contrary, it will be presumed that the parties did have such intention. The onus of proving that there was no intention is on the party who asserts that no legal effect was intended and that onus is a heavy one.

The test as to contractual intention is to be assessed objectively: the fact that one

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Jurisdiction(s):
United Kingdom
Related legal acts:
Key definition:
Group Company definition
What does Group Company mean?

means, in relation to a company, any member of its group;

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