Demystifying the Standard Funding Agreement

This article is based on a extract of the transcript of a presentation by Nick Seddon at our seminars on the Standard Funding Agreement during its introduction. Nick is a lawyer from the firm Blake Dawson Waldron.

The powerpoint slides that accompanied Nick's presentation are also available for download: Demystifying the Standard Funding Agreement (PowerPoint presentation: 181 KB)

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Is the Standard Funding Agreement A Contract?

This agreement is rather different from the sorts of agreements that people make in the commercial world as it's not about procuring a building or ordering steel from BHP.

From the government's perspective it is a contract. It is a formal document that states the rights and obligations of the parties involved and which is enforceable. It's legally a contract, and it has all that goes with that, but it is special.

Legal enforceability means that if there is a dispute between the parties then they can be resolved in a court. That's very unlikely to happen. It doesn't happen in commercial agreements very often. Generally speaking most commercial disputes are sorted out by sensible parties getting together and coming to a reasonable resolution of the problem.

Of course the agreement is self enforcing in the most obvious way and that is the government can withdraw the funds or terminate the agreement. There are lesser measures built into the agreement such as dispute resolution.

Get into the habit of having a log of communications between agreement managers. It would be wrong to suggest that an agreement is always going to be a perfect relationship. Some periods will be better than others. The only realistic way to have a good recall of conversations is to have a good file noting system and to have it connected physically with the agreement document.

The nature of this agreement is special. It is very different from a commercial contract as the government has moved from the purchaser/provider model towards this partnership. It is stated in the background to the agreement that it is a cooperative endeavour - a very important philosophical change has occurred.


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