SQE2 Legal Drafting 2 — Questions and Answers
Question 1: When drafting a non-disclosure agreement (NDA), which elements are essential for enforceability?
- Only the names of the parties
- A clear definition of confidential information, the purpose for which it may be used, the duration of obligations, permitted disclosures, and remedies for breach (Correct answer)
- Only a statement that information is confidential
- A requirement that both parties are UK companies
Correct answer: A clear definition of confidential information, the purpose for which it may be used, the duration of obligations, permitted disclosures, and remedies for breach
An enforceable NDA requires: a precise definition of what constitutes confidential information, the permitted purpose for use, the duration of confidentiality obligations, exceptions (publicly available information, independently developed, legally required disclosures), and remedies including injunctive relief.
Question 2: What is the 'blue pencil test' in the context of drafting restrictive covenants?
- A test of whether the document looks professionally formatted
- A principle allowing courts to sever an unenforceable part of a restrictive covenant, leaving the remainder enforceable, provided the removal does not change the nature of the covenant (Correct answer)
- A requirement to use blue ink for signing
- A test applied only to employment contracts
Correct answer: A principle allowing courts to sever an unenforceable part of a restrictive covenant, leaving the remainder enforceable, provided the removal does not change the nature of the covenant
The blue pencil test allows courts to strike out (sever) an unenforceable part of a restrictive covenant if what remains is enforceable, grammatically sound, and does not change the fundamental character of the covenant. The court will not rewrite the clause.
Question 3: When drafting a settlement agreement in an employment context, what must be included for the agreement to be valid under the Employment Rights Act 1996?
- Only the settlement amount
- The agreement must be in writing, relate to particular proceedings, the employee must have received independent legal advice, the adviser must have insurance, and the agreement must identify the adviser (Correct answer)
- Only the signatures of both parties
- A statement that the employee is happy with the terms
Correct answer: The agreement must be in writing, relate to particular proceedings, the employee must have received independent legal advice, the adviser must have insurance, and the agreement must identify the adviser
Section 203 of the Employment Rights Act 1996 requires settlement agreements to be in writing, relate to particular complaints or proceedings, confirm the employee has received advice from a relevant independent adviser (who must be identified and insured), and the conditions regulating settlement agreements must be satisfied.
Question 4: In property drafting, what is the significance of the 'usual covenants' implied into a lease?
- They are optional extras that add no legal value
- They are implied terms covering rent payment, repair obligations, quiet enjoyment, and insurance, which apply unless expressly excluded or varied (Correct answer)
- They only apply to agricultural leases
- They replace the need for any express terms
Correct answer: They are implied terms covering rent payment, repair obligations, quiet enjoyment, and insurance, which apply unless expressly excluded or varied
The usual covenants include the tenant's covenant to pay rent, keep the premises in repair, allow the landlord to enter and inspect, and the landlord's covenant for quiet enjoyment. They are implied where the lease is granted on 'usual terms' but can be varied or excluded by express provision.
Question 5: What drafting technique should be used to ensure a contract clause survives the termination of the agreement?
- No special drafting is needed — all clauses survive automatically
- Include a survival clause that expressly lists which provisions continue after termination, such as confidentiality, limitation of liability, and dispute resolution (Correct answer)
- Mark the clause in bold font
- Include the clause in an appendix
Correct answer: Include a survival clause that expressly lists which provisions continue after termination, such as confidentiality, limitation of liability, and dispute resolution
A survival clause expressly states which provisions continue in force after the contract terminates. Common surviving provisions include confidentiality obligations, limitation and exclusion of liability, intellectual property rights, dispute resolution mechanisms, and governing law.
Question 6: When drafting a guarantee, what formalities must be observed under section 4 of the Statute of Frauds 1677?
- No formalities are required for guarantees
- The guarantee must be evidenced in writing and signed by the guarantor or their authorised agent (Correct answer)
- The guarantee must be witnessed by two people
- The guarantee must be registered with the Land Registry
Correct answer: The guarantee must be evidenced in writing and signed by the guarantor or their authorised agent
Under section 4 of the Statute of Frauds 1677, a guarantee (a promise to answer for the debt of another) must be evidenced in writing (or a memorandum thereof) and signed by the party to be charged (the guarantor) or their authorised agent. Failure to comply renders the guarantee unenforceable.
SQE2 Legal Drafting 2
When drafting a non-disclosure agreement (NDA), which elements are essential for enforceability?