Ox IGT's blog

‘Subject to contract’: it’s not what you say, it’s what you do...

Over the last year, the courts have considered whether or not using the phrase ‘subject to contract’ during contract negotiations prevented an enforceable contract from being formed.  The conclusion is that conduct is a significant and sometimes crucial factor in assessing whether or not a contract has been formed.  Often, what you do will override what you say.

Stephen Brett of Anderson & Company has prepared an update that looks at this trio of decisions and considers the lessons that can be learned from them. 

There is a summary of his update below and the full note is available here:

http://www.andlaw.eu/downloads/subject_to_contract.pdf

Summary – what lessons can be learned?

These three cases show that starting work in advance of agreeing a contract is always risky:

• Immingham v Clear shows that failing to sign a contract at the last minute after accepting a quotation and exchanging positive emails will not stop a contract from being formed.
• Investec v Zulman cautions against putting too much weight behind the phrase ‘subject to contract’.  It is the parties’ intention that matters.  The presence or absence of the phrase will not of itself determine whether or not a contract exists.
• RTS v Muller illustrates that an agreement can be formed where the parties have agreed on the major issues and started work – even though details remain outstanding and the final agreement has not been signed.

Lord Justice Clarke advises that it is best “to agree first and to start work later”.  He is undoubtedly right, but it is not always possible to delay starting work until a contract has been drawn up and agreed.  If you must take the risk by starting work without the protection of an agreed contract then remember:

• It is vital that it is clear which terms have been agreed and which are outstanding.  If you do not accept any proposed term, say so and take special care not to do anything that might be taken to show that you have accepted the position. 
• It is not necessary to have a written agreement for there to be a binding contract.  If there is to be a written document, be clear whether it is simply a record of what has been agreed or whether there is no agreement until the document has been finalised and signed. 
• If the intention is that no agreement will exist until the written document has been finalised and signed, then it will be very risky to start work before finalising the written agreement. 

The phrase ‘subject to contract’ does not have magical powers.  The courts will take more notice of what you do than of what you say when they try to establish whether or not a binding contract exists.

Disclaimer: This summary contains general information but it does not constitute legal advice, nor should it be relied upon as such.  Full details are available at http://www.andlaw.eu/disclaimer.php. 

 

Government White Paper “Local growth: realising every place’s potential"

On Thursday 28^th October the Government released the White Paper “Local growth: realising every place’s potential”. This paper outlined how they see growth being encouraged in localities, particularly through Local Enterprise Partnerships (LEPs).

We would like to congratulate all the LEPs whose bids have been accepted – which we are pleased to say includes Oxfordshire. We are looking forward to learning what the Oxfordshire LEP will do to support businesses in the area.

There is still uncertainty over what the LEPs will be able to do, and how business and innovation support will be provided in the future. There have been hints of what the future holds, but at the moment there is nothing concrete about what help businesses will be able to expect.

Some of the key announcements that will affect businesses, particularly those who are keen to grow, are:

• the emphasis on Government not helping directly, but empowering local areas to help themselves through working with the private sector;
• the role of the private sector in providing the jobs to replace those that will be lost from the public sector;
• the intention to create equality of growth between regions and sectors;
• Government intervening only when there is a need to remove specific barriers that can’t be overcome by the private sector alone (including job creation, incentives to work, infrastructure to support travel and transport);
• partnerships between local Government, private sector, education establishments and key economic stakeholders;
• cooperation between regions to secure better outcomes, including sectoral partnerships between geographically disparate areas;
• LEPs will fund their own day-to-day running costs and bid to the Regional Growth Fund to obtain money for projects/programmes, to be supplemented by private sector investment;
• the Technology Strategy Board will be responsible for supporting and incentivising business innovation at a national level;
• Government will fund the establishment of growth hubs, to provide additional business support to high growth potential businesses, working with Technology and Innovation Centres;
• simplification of the Solutions for Business offer;
• Grants for Business Investment will cease, although BIS will consider large scale cases on an exceptional basis.

 In the near term, whilst the LEP strategy develops, we will continue our work supporting high growth businesses in Oxfordshire.

 

Ox IGT's board's reaction:

John Francis, representative from Oxford Brookes University:

"I am extremely pleased that Oxfordshire has won support for its plans for a Local Enterprise Partnership.  As one of the key supporters of the plan submitted to BIS, Oxford Brookes University is enthusiastic about the possibilities for the Partnership.  We are confident that it will build on the successes of Innovation and Growth Team partnership, which has been helping innovative companies to grow faster and to create an ecosystem in Oxfordshire that is really effective in giving businesses that extra dimension for success. Oxford Brookes is a core partner of the IGT and Cally Robson and Peter Russell are seconded into the IGT team."

Peer Mentoring - the CEO's perspective

by Stuart Miller, Co-founder and CEO of ByBox

All entrepreneurs are rebels. Like all worthwhile rebels, entrepreneurs bristle at the thought of being told what to do. Asking for help and seeking advice can also be difficult.

Now it’s all well and good being rebellious (in fact, it’s essential), but us entrepreneurs need help just like everybody else. This poses a tricky problem: if we need help but don’t like listening to advice from “all-those-experts-who-think-they-know-it-all-but-have-never-actually-done-it-themselves”, then where do we go?

Simple. We listen to each other. Other entrepreneurs who HAVE done it before or, even better, are all living through the same adventures and are facing the same issues. People issues. Financing issues. Competition issues. Shareholder issues.

But where do we meet like-minded rebellious entrepreneurs? That’s simple too. The IGT CEO Peer Group is the perfect environment to learn, help and progress. I’ve been an entrepreneur for over 15 years; I joined the IGT CEO Peer Group when it launched in April 2010. Put simply: it works.

Why does it work? Because we all respect each other for having the courage and commitment to actually have a go at starting a company. From this respect comes a real desire to learn from each others’ experiences.

One of the great things about the group is the diversity of people involved. Different backgrounds, different business, different beliefs. But the same drive and the same rebellious gene that screams “if you don’t think we can do this then WATCH!”.

It’s odd when you think about it. If my bank was gone tomorrow I’d go to a different bank. Same for my accountant, lawyer, landlord and mobile phone operator. But if the IGT CEO Peer Group wasn’t there tomorrow  then I really don’t know where I’d go to replace it.

So if you’re an entrepreneur and want to engage with like-minded revolutionaries eager to help to solve day-to-day problems then get involved with the IGT CEO Peer Group. If you’re an entrepreneur without any burning problems because everything appears to be under control then, as Mario Andretti said, you’re probably not going fast enough.

Why Peer Mentoring?

Running any organisation can be a very demanding and lonely job. CEOs have to tackle any challenge that comes their way regardless of past experience, skills or training. Concerns and doubts may also be difficult to explore, especially when experience and capabilities within the organisation are limited in some way or there is high sensitivity.

Members of an IGT CEO Peer Group participate in groups of up to 10 CEOs from non-competing businesses. The meetings are moderated by an experienced facilitator.

The sessions are conducted in a safe, open and confidential forum and includes:

• Discussion of personal or business issues with peers
• Gaining knowledge and insights from a faculty of real experts including how a CEO can improve their own leadership capability.

Why join?

Personal benefits include:

• Development of leadership capabilities
• Gaining insights from other members’ experience
• Improved decision making
• Increased confidence
• Reduced sense of isolation

Business benefits include:

• More effective leadership
• Improved focus, especially on strategic issues
• Updates on latest thinking in effective management
• Solutions for problems and roadblocks

To follow soon - peer mentoring from an entrepreneur and CEO's perspective...

Response to Nesta's Rebalancing Act report

In many ways NESTA's report isn't new. There's been long-standing recognition that innovative businesses will be vital to the UK's economy going forward. Probably what IS significant is the timing of the report (June 2010).
 
At a time when government is clearly assessing where it can afford to cut expenditure, the report sends a message loud and clear that the only way to win the battle for economic recovery is to create an environment that encourages innovation in ALL businesses, and in particular to focus on practical programmes that support high-tech businesses with a potential for high growth.
 
While we at the Innovation and Growth Teams (and previously the Enterprise Hubs) in the South East can breathe a sigh of relief that we're in the right camp and have been doing just as the NESTA report suggests for some years now, someone, somewhere should be kicking themselves. Somehow, the work of these government funded initiatives have failed to register on NESTA's radar. I suspect it's gone largely unnoticed in the business community too.
 

So setting smugness aside, I think there's a good learning to be had here. There needs to be more NOISE around the work we are already doing with businesses and organisations that have a potential for high growth. Just as innovative businesses are carving their space in audience awareness via social media, surely it's time that government initiatives are properly freed also to promote themselves, and compete for some attention with the "market-led" initiatives that NESTA's report has chosen to feature.

by Cally Robson

Postgraduate Scholarships available for Masters courses at Oxford Brookes University

The Graduate School at Oxford Brookes University is pleased to offer a number of scholarships to enable individuals to up-skill or change career direction, in order to improve their chances of re-employment or career development in these challenging times.

Applicants should be graduates who are either:

• Currently employed, but seeking to improve their skills and knowledge to enhance their employability and career development OR

• Currently unemployed and seeking employment that requires graduate or postgraduate attributes

For those currently in employment, Oxford Brookes will fund 75% of the course fees, with the employer being expected to provide day release for attendance on the course and to continue to pay the employee’s salary in full.  A bursary of £500 per annum will also be provided by the university to the student to cover books, materials and travel.

For those wishing to return to employment, the award covers both fees and a maintenance allowance.  Students will be provided with all fees and a maintenance allowance of £8,000, payable quarterly, for a full year’s study (pro-rata part-time over two years).

Further details and an application form are available on line at www.brookes.ac.uk/studying/finance/support/pg_home

Alternatively, if you wish to discuss the scheme in more detail and the types of courses which are eligible, please send your contact details by e-mail to: jorgan@brookes.ac.uk

Please note that application criteria apply and that only specified Masters courses are eligible for the awards.  All applications must be received by 31 July 2010. The scheme is part of the university’s offering to businesses and individuals under its “Beating the Recession” theme funded by the Economic Challenge Investment Fund (ECIF).

Funding Your Business: Get Creative!

It is becoming clear that the funding landscape that we have all been familiar with is changing. Many UK Angels and VCs are sitting on funds in anticipation of cash calls from their existing portfolio and bank funding has all but dried up.

The pendulum seems to have swung dramatically away from high risk (potentially high return) propositions. Deals from sure fire bets - existing companies with solid balance sheets - are being fought over, while nothing pre-revenue is getting a second glance.

The message is, we need to change; we need to get creative.  Funding is still there, but you have to get your eye in to understand where to look.  There is liquidity; the water is still there, but it pops up now in different places. Old habits die hard; we are programmed to search for funding as if it is a comfy old formula.  We know how to prepare a proposition for the bank, an Angel, a VC.  However those wells are drying up; possibly temporarily, but who knows when they will be available again

That’s all very well, but where should companies look be looking?

R&D Tax Credits are one relatively under-used scheme which can be used by any company which is performing qualifying research and development.  This scheme is a Corporation Tax relief that may reduce your company’s tax bill by more than your actual expenditure on R&D costs.  More details on this can be found here. This is a complex scheme and not all accountants fully understand it, so it is important that you seek out one that does.

SEEDA has provided several grants and soft loans which form a ‘funding escalator’, providing funds for early stage commercialisation activities through to growth and expansion. There should be a funding product available at all stages of a company’s growth and for more information see Finance South East's website.

Traditionally in the UK we have been poor at searching out European money.  It’s a bureaucratic process but the money is there if you know how to look for it. It will involve collaboration with other European companies, but that, in itself, could prove serendipitous.

Technology Strategy Board calls may suit some companies and there are sector specific grants out there, with some examples of grants for the healthcare sector below:

- Wellcome

- Gates Foundation

- FIND

The drive to improve the environment has lead to opportunities for funding from organisations such as The Carbon Trust. We have witnessed some inventive business to business funding, which can take interesting forms.  It is worth looking up and down the supply chain for trade investment.  If the product or service you are developing is of enough interest to a potential client or supplier then they may loan the development costs or take an equity stake in the business.  It may be that your product would give a potential customer a significant competitive advantage, or would create an exciting new market opportunity for a supplier.

Equity funds are coming from directions we are not necessarily tuned in to.  China, for example, is a new player in the investment market and India’s economy is growing by 7%. As a result of the turbulence created by the Credit Crunch and the fact that there are few attractive conventional investment opportunities, there are some new Angels entering the market

Asset finance may well be the salvation of some companies and it may be worth exploring Factoring and Invoice Discounting.  There may be ways of bringing funding into the company via expertise, either in the form of schemes such as Knowledge Transfer Partnerships or by getting key expertise to buy into the company by way of an equity share.

So, the message is, if you are looking for funding, ditch the formula and get creative!