[Board to include project specific provisions.]13
_________________________________________________________
13 Any warranties to be given by the Board must be justified on a project specific basis (it is expected that such circumstances will be limited for example, where the Board is the only source of the information and Project Co has no means of obtaining or verifying that information itself). Increasingly the private sector is requiring warranties as to the accuracy of certificates of title. These are not considered to be necessary in transactions such as these if there is no security being granted over the property. To the extent that a problem with title arises then Project Co's remedy is either through a Delay/Compensation Event or an Excusing Cause. If a warranty is required then the Board should consider qualifying it to the best of the Board's knowledge, belief and information. Boards should note that the standard form assumes that the Board will not warrant information disclosed to Project Co (referred to as Disclosed Data) and expressly excludes liability in this regard. A breach of warranty should give rise to a claim for damages or a price variation mechanism could be introduced to the Agreement. Breach should not give rise to a right for Project Co to terminate.
The Scottish Government Health Directorates has not included warranties from either party as to capacity and authority due to the limited legal benefit that they provide (i.e. possibly acting as evidence to support an action for negligent misrepresentation) and taking account of the narrow grounds on which a company might lack capacity under Section 35 of the Companies Act 1985. The Board's power to enter into the agreement is derived from statute and it would therefore be inappropriate for it to give warranties as to capacity and authority. If there are reasons for concern over Project Co's capacity or authority, the requirement for such warranties should be considered as they may (in addition to the point made above) have the practical benefit of focussing the mind of Project Co (and their legal advisers) on the point.