Common Terms Agreement for the United Kingdom

Common Terms Agreement Template for England and Wales

A Common Terms Agreement is a fundamental document in English law financing arrangements that establishes the primary terms and conditions governing multiple facility agreements. It centralizes the key provisions that apply across various facilities, including representations, warranties, covenants, and events of default, thereby ensuring consistency and avoiding duplication across separate facility agreements. This document is particularly crucial in complex financing structures where multiple lenders and facilities are involved.

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What is a Common Terms Agreement?

The Common Terms Agreement serves as the cornerstone document in complex financing arrangements under English law. It is typically used when multiple facilities or lenders are involved, providing a unified set of terms that apply across all related facility agreements. This approach streamlines documentation and ensures consistent treatment of key provisions such as representations, covenants, and events of default. The document is particularly valuable in syndicated lending, project finance, and other structured finance transactions where standardization across multiple agreements is essential.

What sections should be included in a Common Terms Agreement?

1. Parties: Identification and details of all contracting parties

2. Background: Context and purpose of the agreement

3. Definitions: Key terms used throughout the agreement

4. Facility/Credit Terms: Core financial terms including amounts, interest, and repayment

5. Representations and Warranties: Standard declarations by borrowers and guarantors

6. Covenants: Positive and negative obligations of the parties

7. Events of Default: Circumstances triggering default and remedies

8. Governing Law and Jurisdiction: Choice of law and dispute resolution provisions

What sections are optional to include in a Common Terms Agreement?

1. Security Provisions: Details of any security arrangements - used when the agreement involves secured facilities

2. Intercreditor Provisions: Ranking and priority between different creditors - used when multiple creditors are involved

3. Syndication Provisions: Terms governing syndicate of lenders - used for syndicated facilities

What schedules should be included in a Common Terms Agreement?

1. Form of Transfer Certificate: Standard form for transferring rights and obligations

2. Form of Accession Deed: Template for new parties joining the agreement

3. Conditions Precedent: List of required documents and conditions

4. Financial Covenants: Detailed financial ratios and calculations

5. Notice Details: Contact information for all parties

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

England and Wales

Publisher

Genie AI

Document Type

Agreement Contract

Cost

Free to use
Relevant legal definitions
Clauses
Industries

Contracts (Rights of Third Parties) Act 1999: Key legislation governing third party rights in contracts, including enforcement rights and the ability of third parties to rely on contractual provisions

Law of Property Act 1925: Fundamental legislation governing property rights, particularly relevant for security interests and registration of charges in financing agreements

Companies Act 2006: Primary legislation governing corporate matters including corporate capacity, authority, registration of charges, and directors' duties

Financial Services and Markets Act 2000: Regulatory framework for financial services activities, including compliance requirements for regulated financial transactions

Contract Law Fundamentals: Common law principles including offer, acceptance, consideration, intention to create legal relations, and capacity to contract

Equitable Principles: Legal principles including good faith, unconscionable conduct, and equitable remedies

Consumer Credit Act 1974: Legislation governing consumer credit arrangements and related consumer protection measures

Financial Collateral Arrangements (No 2) Regulations 2003: Regulations governing financial collateral arrangements and security interests in financial instruments

Enterprise Act 2002: Legislation containing important provisions regarding corporate insolvency and business reorganization

Civil Procedure Rules: Rules governing civil litigation in England and Wales, particularly relevant for enforcement provisions

Rome I Regulation: EU regulation (still relevant post-Brexit) governing choice of law in contractual obligations

Cross-border Insolvency Regulations: Framework for handling cross-border insolvency cases and recognition of foreign proceedings

International Sanctions Compliance: Various regulations and requirements regarding international sanctions and their impact on contractual relationships

Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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