Article by Marshall Bromwich and Fleur Shaw-Jones
A recent UK decision highlights the importance of finalising and
executing documents in the correct manner to ensure the documents
cannot later be deemed to be invalid. This is particularly
important in the context of executing franchise agreements where
given the formal process to be complied with under the Franchising
Code.
In R (on the application of Mercury Tax Group and Another) v
HMRC, Mercury operated a tax avoidance scheme. To implement
the scheme, clients were required to execute three documents - a
trust deed, an options agreement and a sale and purchase agreement.
Mercury requested clients execute these documents when they were in
draft form. The documents were subsequently amended, however the
final versions were not executed by the clients. Rather, Mercury
took the signed execution pages from the draft versions and stapled
them to the final versions.
