Restrictive covenants Definition

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GLOSSARY

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What does Restrictive covenants mean?

A covenant requiring the covenantor not to do the thing specified. In order to be enforceable, such provisions should be reasonable and necessary for the protection of the target company’s/target business’ legitimate business interests. Restrictive covenants in a SPA/APA restrict the seller’s activities during an agreed period so that the buyer can try and protect the value of the target company/target business being acquired.

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Solar (PV) farms—checklist

Solar (PV) farms—checklist This checklist can be used by landowners including farmers and local authorities who are considering a solar farm project. • Levels of irradiance Is the land in an area of the UK with high irradiation? The South West, the South, South Wales and East Anglia are best. Solar farms are also suitable in the Midlands and the North albeit with lower levels of irradiance. North Scotland is the least suitable. • Grid connection Is there an existing electricity substation nearby for connectivity to the grid? The distribution network operator should be contacted at an early stage for a quote. • Suitable land ◦ What is the site area? Typically at least ten hectares is required. ◦ Are there any surrounding environmental, geographic or geological factors that might have an effect on the solar array? If possible, aerial photos should be obtained. ◦ Is the site within or adjacent to a designated landscape such as an Area of Outstanding Natural Beauty or National Park? ◦ Is the land...

Defective title insurance—checklist

Defective title insurance—checklist A Checklist for use when acting for a buyer who is considering taking out a policy or relying on an existing policy to plug a defect in title revealed during the due diligence process. A title is defective where it is not good and marketable (see Practice Note: What is a good and marketable title?) or where there is a risk that a third party could establish an interest adverse to the title. In the right circumstances, the right policy can be a useful tool which enables the transaction to proceed and the buyer to secure finance. However, care must be taken to ensure that the policy is worth the paper that it is written on. It is important to consider whether insurance might be the best approach as early as possible, particularly as insurance is not normally available where the party with the benefit of the relevant right or covenant has been approached. Insurance distribution—regulatory requirements Solicitors need to be aware of their duties and obligations...

Discover our 33 Checklists on Restrictive covenants

How to appoint a sales and marketing agent

How to appoint a sales and marketing agent This Practice Note is a ‘how to’ guide on appointing a sales and marketing agent. It includes a summary of what agency is, an explanation of alternative routes to market, factors to consider before selecting a sales and marketing agent, and practical guidance on negotiating an agency agreement. It considers the appointment of a sales and marketing agent where the agent promotes the sale of the principal’s products and makes representations about the characteristic properties of the products, as well as acting as sales agent with the authority to conclude binding contracts on behalf of the principal. What is agency? Agency is a relationship under which a principal appoints an agent to act under their direction and on their behalf for specified purposes. In essence, the principal grants authority to the agent to perform certain acts or make certain decisions for which the principal is generally considered liable. Such authority may be express, implied, apparent or ostensible. For more information, see Practice...

Remedies for breach of restrictive covenants

Remedies for breach of restrictive covenants This Practice Note explains when damages for breach of restrictive covenants might be awarded in lieu of an injunction, how damages are assessed and what happens if the beneficiary delays in claiming for the breach. Damages or injunction—the test The primary remedy for breach of a restrictive covenant is a permanent injunction to restrain the breach. However, the courts have jurisdiction to award damages instead of an injunction. The court's jurisdiction is equitable (except in the case of a breach by an original covenantor) so the court has discretion as to the appropriate remedy. The court is entitled to consider conduct, for example, delay or inactivity by the beneficiary as evidence that an award of damages in lieu of an injunction will be appropriate. In Shelfer v City of London Electric Lighting, the court confirmed the ‘working rule’ for awarding damages instead of an injunction was if: • injury to the claimant's legal rights is small • the injury is...

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Transfer of part of a registered lease

Transfer of part of a registered lease Precedent transfer This precedent gives suggested wording for Form TP1 in the rare circumstances of a leasehold assignment of part. Assignments of part are unpopular with landlords because the consequent fragmentation of the tenant covenants inevitably makes it harder and costlier for the landlord to collect rent, enforce the covenants and otherwise manage the property. See Practice Note: Assignment of part of the demised premises. Form TP1 must be used where the assignment is of part of a registered lease, or of part of an unregistered lease that has more than seven years left to run. An adaptable Word version of the precedent form TP1 can be downloaded, saved or printed from this link: Apportionments On an assignment of part, the tenant and assignee should agree to apportion: • the rent payable under the lease; • any other amounts payable under the lease (insurance, service charge etc); and • the responsibility for any other covenants that are non-attributable to the various parts...

Legal due diligence questionnaire—asset purchase—employment

Legal due diligence questionnaire—asset purchase—employment Definitions In this questionnaire, the following words and phrases have the meaning set out opposite them. [CA 2006 • the Companies Act 2006;] [Business • the business of [insert description of the business] operated by the Seller and all other activities including those ancillary or incidental to or in connection with such business as carried on by the Seller;] Buyer • [insert name of buyer] Limited incorporated in England and Wales under number [insert company number]; Employee • any person employed or engaged to work in, or assigned to, the Business[, including any based overseas]; EqA 2010 • means the Equality Act 2010; ERA 1996 • the Employment Rights Act 1996; Group • the Seller and each of the Subsidiaries (including [insert names of companies that may not fall under definition of subsidiary from CA 2006]) and Group Company means any of them; pseudonymised • where information is processed in such a way that names or other identifiers that can be easily...

Dive into our 62 Precedents related to Restrictive covenants

In a claim by an employer against a former employee’s new employer for one of the economic torts (eg conspiracy, inducement to breach contract), what is the measure of damages?

In a claim by an employer against a former employee’s new employer for one of the economic torts (eg conspiracy, inducement to breach contract), what is the measure of damages? The new employer of the former employee may be made a party to any litigation involving the target employee as a result of the operation of the economic torts, including: • inducement/ procurement of breach of contract • conspiracy (lawful means conspiracy and unlawful means conspiracy), and • unlawful interference with business At final trial, an award of damages may be made against the offending employee's new employer for these economic torts. Where the damages claimed arise from a tort, the court seeks to place the claimant in the same position as if the wrong had not been committed. Loss of profit is the most likely kind of damage to be claimed, but the cost of recovering from the breach can also be claimed, and it is possible to claim exemplary damages. As a general principle,...

What process needs to be gone through for formal adoption by a water company of the drains on a development that have already been laid and become optional? Are any easements required from landowners for such?

What process needs to be gone through for formal adoption by a water company of the drains on a development that have already been laid and become optional? Are any easements required from landowners for such? The adoption of sewers is the process by which sewers are vested in the sewerage undertaker or appointed sewerage company and subsequently maintained at the undertaker's expense. Transfers The Water Industry (Schemes for Adoption for Private Sewers) Regulations 2011 (WI(SAPS) Regs 2011), SI 2011/1566, were made under section 105A of the Water Industry Act 1991 (WIA 1991) to transfer most private sewers and lateral drains built before 1 July 2011 to the relevant sewerage undertaker on 1 October 2011. ‘Private sewers’ are defined in WI(SAPS) Regs 2011, SI 2011/1566, reg 2 as the whole or part of a foul, combined or surface water private sewer, but does not include a highway drain or sewer. ‘Private lateral drains’ are defined as the whole or part of a lateral drain which is not vested in...

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Property weekly highlights—19 June 2025

This week's edition of Property weekly highlights includes: cases on adverse possession and unincorporated associations, rectification of a transfer, landlords’ insurance payments and rent repayment orders, regulations concerning occupation contracts in Wales and the statutory right of first refusal, New versions of CPSE.1 and CPSE.7 taking account of Economic Crime (Transparency and Enforcement) Act 2022 and a planning reform working paper on reforming site thresholds.

Property Disputes weekly highlights—19 June 2025

This week's edition of Property Disputes weekly highlights includes: analysis of a High Court judgment concerning a landlord overcharging for insurance rent, a Privy Council appeal concerning adverse possession, an Upper Tribunal (Lands Chamber) case overturning a decision regarding an erroneous land transfer and a Sheriff Appeal Court dismissal of an appeal, ruling that there was a broken chain of causation. In addition, there are various updates from the HM Courts Tribunal Service—including announcing mandatory online portal for civil money claims from July 2025 and a new digital query system for legal representatives using the online money claim portals, and minutes of the CPR Committee meeting—9 May 2025.

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