Background

3.  The question whether, in a particular case, a Government department has capacity or powers to enter into a contract on behalf of the Crown, is answered by reference to principles of constitutional law derived from case law and, if appropriate, by reference to relevant statutory provisions. These are openly available to all contracting parties alike and it is for them to consider these and take advice from their own lawyers if this is considered necessary.

4.  If lawyers instructed by one of the parties have genuine doubts on any specific issues as to the capacity or powers of the Crown to enter into the proposed contract, these questions should be raised with the department or authority or their lawyer at the earliest opportunity so that the matter may be resolved. The department or authority or their lawyers should always be prepared to be helpful in providing information or a steer which may resolve the issue. Such dialogue between the parties or their representatives is often to their mutual advantage. What the department or authority or their lawyers should not do is, in effect, undertake this aspect of due diligence work on behalf of lawyers instructed by the other parties to the transaction.

5.  Similarly, in relation to authority to sign, an " opinion letter" should not be necessary in the light of the principles described below. Where there is reason to question whether an official has status and authority as a civil servant within the relevant department or where there are particular statutory requirements to be complied with, specific evidence may be given of internal authority or compliance