Absence of Relevant Discharge Terms

Local Government (Contracts) Bill – in the House of Commons at 10:14 pm on 11th November 1997.

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Lords amendment: No. 13, in page 5, line 16, leave out from ("section") to ("do") in line 21 and insert ("the circumstances in which there are no relevant discharge terms having effect between the local authority and a person who is a party to the contract include (as well as circumstances in which no such terms have been agreed) circumstances in which the result of a determination or order of a court, made (despite section 6(4)) on an application for judicial review or an audit review, is that such terms")

Photo of Nick Raynsford Nick Raynsford Parliamentary Under-Secretary (Department for Environment, Transport and the Regions)

I beg to move, That this House doth agree with the Lords in the said amendment.

The amendment was made partly in response to a point raised by Lord Bowness on Second Reading in another place about the relationship between clauses 6(4) and 7(3).

The amendment clarifies the circumstances under which there are no discharge terms having effect. Clearly, there will be no discharge terms where none have been agreed by the parties to the certified contract. It is also possible, however, that, despite clause 6(4), a court might conclude in an extreme case in public law proceedings that terms agreed as discharge terms are not to have effect. The amendment to clause 7(3) makes it clear that that, too, would be a situation in which there were no discharge terms, so that the contractor or financier would be entitled to repudiatory damages.

Lords amendment agreed to.