Canada: Canadian Tax @ Gowlings - June 22, 2011

Last Updated: June 24 2011

Edited by Laura Monteith

Hedging for Tax Purposes - Does the Common Law Require an Underlying Transaction?

By: Eric Koh

Canada Revenue Agency ("CRA") recently released four internal technical interpretations ("TIs") on the characterization of foreign exchange ("FX") gains or losses from forward contracts used to hedge foreign investments.  One of the issues addressed in the TIs pertained to the definition of a hedge.  On this issue, for tax purposes, CRA unequivocally stated that the hedged item must be a transaction, not an asset or liability.  Thus, gains or losses from a forward contract used to hedge foreign investments or subsidiaries should be reported on account of income since "day-to-day fluctuation in the book value of foreign subsidiaries [....] does not constitute an underlying capital transaction."1 In contrast, International Financial Reporting Standards ("IFRS") are more flexible and recognize hedging of assets (including foreign investments) or liabilities.  In support of its decision, CRA cited a set of court cases.  This article will examine these cases, and consider and comment on whether CRA's reliance on them is justified.

Background

The TIs generally involved corporate taxpayers that utilized forward contracts to hedge the FX exposure of their net foreign investments and/or foreign currency denominated net monetary assets.  In each case, the amount being hedged was the book or carrying value, and not the fair market value of the investments or net monetary assets.  Also, the foreign investments were all long term investments.

As described in TI documents 2009-0345921I7 and 2010-0355871I7, two corporate taxpayers wanted to report the gains or losses on account of income.  However, the respective Tax Services Office ("TSO") objected.2  In TI document 2009-0345921I7, the TSO argued that the corporate taxpayer's exposure was on-going and capital in nature.  According to the TSO, the corporate taxpayer "has mitigated its balance sheet volatility with careful monitoring of both the timing value of its hedges and currency exposures and evidence of this matching is, in itself, evidence of linkage."3   In contrast, the TSO took the opposite stance in TI document 2009-0352061I7 where the corporate taxpayer wanted to report the gains or losses on account of capital.4  In each case, the TSO requested advice from the Rulings Directorate on the appropriate tax treatment of the settlement of the forward contracts.

CRA Income Tax Rulings Directorate Administrative Position

In general, hedges raise tax issues with respect to both the timing and character of any resulting gain or loss.  The TIs appear to deal only with the latter issue.  In all of the TIs, CRA reiterated its long-standing position that the characterization of gains or losses on a forward contract used in hedging depends on the underlying use of funds that the derivative was meant to hedge.  A forward contract intended as a hedge would be considered separately from the underlying transaction that is being hedged, although its nature (i.e. income versus capital) would be characterized by the underlying transaction.5 Since the Income Tax Act (Canada) ("ITA") is silent on the definition of a hedge, or when a hedging relationship exists, the common law is used to fill the gap.

This is consistent with the decision in Canderel Ltd. v. Canada6  ("Canderel"), where the Supreme Court of Canada ("SCC") stated that the determination of income for tax purposes is a question of law.  The paramount concern is to have a more accurate picture of the taxpayer's profit.  To ascertain profit, the taxpayer can choose any method not inconsistent with the ITA, case law, and well accepted business principles.  Accounting principles are not a rule of law, only an interpretative aid.  According to CRA, the "effectiveness of a hedge for tax purposes [.....] is relevant to the computation of profit."7  Thus, a hedging relationship recognized under IFRS may not necessarily be recognized for tax purposes.

Under CRA's interpretation of the common law, "in order for a forward contract to be a hedge for income tax purposes, the forward contract needs to be linked to a transaction, not an asset or liability." According to CRA, a transaction is present when "there is a purchase, a sale, or repayment of debt."9  In addition, CRA stated that a projected sale of an asset may provide sufficient linkage.10  For example, while an investment in a foreign subsidiary is an asset, the projected disposition of that foreign subsidiary is a transaction that can be hedged for tax purposes.  Because CRA's  position is that a forward contract that is intended as a hedge would otherwise be considered separately for tax purposes from the underlying transaction that is being hedged, it is not clear the extent to which timing issues were relevant to the requirement for a link to a transaction.

It should be noted that having a transaction as a hedged item is a necessary, but not a sufficient condition, for there to be a hedge for tax purposes.  More is required before a forward contract and the hedged item are considered sufficiently linked.  For example, CRA will also look at the notional amount and maturity of the forward contract relative to the hedged item.11  On the issue of intention, so long as the hedged item is not a transaction, CRA will not recognize a hedge for tax purposes regardless of the taxpayer's intentions to the contrary.12  Nevertheless, in any other context, intention is a relevant factor to determine sufficient linkage.

Therefore, as far as CRA is concerned, if a forward contract is not sufficiently linked to an underlying transaction, there will not be a hedge for tax purposes and all gains or losses from the forward contract will be reported on account of income.  If there is sufficient linkage, then there is a hedging relationship and the gains or losses will be characterized in accordance with the underlying use of the funds. 

Common Law Cases

CRA primarily relies on three cases to support its position: Salada Foods Ltd. v. R.13  ("Salada"), Echo Bay Mines Ltd. v. Canada14 ("Echo Bay") and Placer Dome Canada Ltd. v. Ontario (Minister of Finance)15 ("Placer Dome").  These cases appear to offer only limited support for CRA's position.  Besides Salada, the other two cases involved hedges of transactions in very specific fact situations and the case of Placer Dome involved a different statutory context. 

In Echo Bay, the taxpayer mined silver.  The parent of the corporate taxpayer used forward sales contracts to fix the price of future deliveries of silver.  The main issue decided by the Federal Court – Trial Division ("FCTD") was whether profits from these contracts can be treated as resource profits under Regulation 1204(1) of the ITA.  Given the context, it is not surprising that the criteria mentioned by the FCTD for determining the existence of a hedge included references to transactions. 

Similarly, in Placer Dome, the SCC considered the treatment of gains and losses from hedging contracts in the mining industry and whether proceeds from hedging should be taxed under the Mining Tax Act, R.S.O. 1990, c. M.15 ("MTA").  Other than the different legislative acts, the facts in Placer Dome and Echo Bay were largely similar.  Essentially, the SCC had to determine the proper interpretation of hedging as defined in the MTA and whether the statutory definition is limited to instances where there is physical delivery of the commodity being hedged.

The respective courts in Echo Bay and Placer Dome were not required to consider whether a derivative can be linked to assets or liabilities and still be considered a hedge for tax purposes.  Given the narrow context in which these cases were decided, they do not provide authority for CRA's much broader position. 

As for Salada, although it provides the strongest support for CRA's position, it is still far from convincing.  At best, this case only stands for the proposition that a forward contract can never hedge a foreign investment or foreign currency denominated assets or liabilities that are recorded at historical cost in the financial statements.  The FCTD in Salada never explicitly stated that a hedge for tax purposes will only exist where the hedged item is a transaction. 

The taxpayer in Salada annually entered into a FX forward sale contract that it claimed was meant to hedge its UK investments, which included a note receivable and an equity stake in the subsidiaries.  Both the note receivable and equity stake were recorded at historical cost in the financial statements.  The UK investments also included accumulated and undistributed net profits of the subsidiaries.  The notional amount of each contract for a given year was the sum of the historical cost of the note receivable and equity stake, and the accumulated and undistributed net profits of the subsidiaries (the "book value").  In 1968, the taxpayer enjoyed a gain from the FX forward sale contract which it excluded from income, arguing that its net profit was zero once the gain was offset by the loss in its UK investments due to FX fluctuations.  Alternatively, the taxpayer argued that the gain should be on capital account.  CRA contended that the transaction at issue was speculative, and an adventure or concern in the nature of trade, and characterized the gain as income.  CRA prevailed over the taxpayer in court.

The FCTD examined the link between the FX forward contract and the underlying UK investments to determine if there was a hedge.  The FCTD rightly pointed out that the taxpayer's actual investment loss due to FX fluctuations is a function of the investments' fair market value.  However, the notional amount of the FX forward contract was not the same as the investments' fair market value.  Thus, the FCTD concluded that there is "little or no relationship between the gain" on the forward contract and the taxpayer's "actual investment loss [....] as a result of the devaluation of the pound"16, since the actual investment loss is a function of the investments' fair market value, while the gain on the forward contract is a function of the book value.

According to the FCTD, the taxpayer's actual investment loss from the appreciation of the Canadian dollar required a sale of the investments, or an appraisal to determine the investments' fair market value, neither of which was done.  This finding in Salada implies that a forward contract or derivative with a notional amount based on anything other than the fair market value of an asset or liability, cannot be a hedge of that asset or liability for tax purposes.  Thus, Salada does offer some qualified support for CRA. 

Nevertheless, Salada does not sustain CRA's broader position that a hedged item can never be an asset or liability.  So long as the notional amount of a forward contract matches the fair market value of an asset or liability, and assuming that other criteria for recognizing a hedge are also satisfied, Salada does not preclude the recognition of a hedge for tax purposes.  It is interesting that, in this context, CRA has ignored the FCTD's comments about the use of appraisals to ascertain fair market value, and instead has chosen to adopt the position that a disposition of an asset or liability is the only way to determine fair market value of the relevant asset or liability. 

With the recent switch to IFRS in Canada, it is likely that fair value accounting will be more widely used.  Thus, more assets and liabilities may now be marked to market and stated at fair market value on the financial statements of corporate taxpayers.  Even when an asset or liability is not marked to market on the financial statements, the judgment in Salada suggests that a hedge for tax purposes is still possible if the notional amount of the forward contract or derivative is based on the appraised fair market value of the relevant asset or liability. 

It should also be noted that the FCTD in Salada was mainly deciding if the taxpayer's transaction was speculative and an adventure or concern in the nature of trade.  Such an inquiry is fact specific, and dependent on the unique circumstances of each situation.17  There was other evidence in Salada that the taxpayer was speculating.  Indeed, the taxpayer acknowledged the speculative intent behind the transactions.18  Therefore, the decision and findings of the Salada case should not be applied to different factual situations where there is no evidence of such a speculative intent.  The decision in Salada does not establish a categorical rule that only a transaction can be hedged for tax purposes. 

Finally, Salada is inconsistently and selectively applied by CRA.  CRA permits partial hedging, and stated in one of the TIs that "a hedge for less than the amount of a [hedged item] could still be an acceptable hedge".19  Arguably, this position is inconsistent with Salada, given that the gain or loss from a derivative used as a partial hedge will not be equal to the actual gain or loss from the entire hedged item, regardless of whether the hedged item is an asset, liability or transaction.

Concluding Remarks

Unlike IFRS, CRA has taken the position that the hedged item must be a transaction for a hedge to exist for tax purposes.  It is irrelevant if the underlying exposure is capital in nature, and all other conditions for recognizing a hedge for tax purposes are met.  CRA primarily relies on the common law to support its administrative position.  However, contrary to the assertions of CRA, the common law cases that it relies on do not rule out the possibility that a forward contract can be linked to something other than a transaction and still be considered a hedge for tax purposes. 

While CRA is correct in stating that IFRS and commercial principles do not have the force of law, they are not without value.  Courts have often relied on accounting and commercial principles as tools of interpretation whenever statutory definitions are absent or incomplete.  Indeed, the other factors used to determine if a hedge exists for tax purposes closely mirror those used in IFRS to determine if hedge accounting is appropriate.  Exposure to balance sheet volatility from FX fluctuations is a risk faced by many corporate taxpayers, and the hedge of this exposure is recognized by IFRS.  Thus, in the absence of a clear statutory prohibition in the ITA and common law, it is not clear that CRA should adopt such a restrictive definition of "hedging" and not take into consideration IFRS or commercial principles.  Nevertheless, based on the TIs, it seems clear that CRA is not prepared to revisit their long-standing position.

Footnotes

1. CRA Interpretation 2009-0348961I7 – "Foreign Exchange Gains/Losses" (April 15, 2010).
2. See CRA Interpretation 2009-0345921I7 – "Derivatives – Income or Capital" (April 15, 2010) and CRA Interpretation 2010-0355871I7 – "Derivatives – Income or Capital" (April 21, 2010).
3. CRA Interpretation 2009-0345921I7 – "Derivatives – Income or Capital" (April 15, 2010).
4. CRA Interpretation 2009-0352061I7 – "Foreign Exchange Gains/Losses on Hedges" (March 12, 2010).
5. 36th Canadian Tax Foundation Conference, 1984, Question 63.
6. [1998] 1 S.C.R. 147.
7. Supra note 4.
8. Supra note 3.
9. Supra note 1.
10. CRA Interpretation 2010-0355871I7 – "Derivatives – Income or Capital" (April 21, 2010).
11. Supra note 3.
12. Supra note 4.
13. [1974] C.T.C. 201 (F.C.T.D.).
14. [1992] 2 C.T.C. 182 (F.C.T.D.).
15. 2006 SCC 20.
16. Supra note 13 at para 16.
17. M.N.R. v. Taylor, 56 DTC 1125.
18. Supra note 13 at para 17.
19. Supra note 3.



Dual Consolidated Loss Rules Can Apply to Article IV(7)(b) Restructured Debt

By Henry Chong

This Article was first published by the Canadian Tax Foundation in (2011) 19:2 Canadian Tax Highlights.

Because Article IV(7)(b) of the Canada-U.S. Tax Treaty (the "Treaty") generally results in a loss of treaty benefits on interest payments from a ULC to its U.S. parent ("USCo") where the ULC is fiscally transparent for U.S. tax purposes, the USCo will generally restructure its cross border debt in order to avoid that result.  A recent ruling is a reminder that the tax consequences in the US of such restructurings may differ depending on the circumstances.

Prior to Article IV(7)(b) coming into force on January 1, 2010, a U.S. investment into Canada would typically be made through a ULC that was disregarded by the US where the ULC was funded by debt of USCo, the interest on which was deductible in Canada and ignored by the U.S.  Canadian withholding tax on the interest was generally reduced under the Treaty.  This changed under Article IV(7)(b).  Interest from ULC to USCo no longer benefits from Treaty rates where the ULC is fiscally transparent in the U.S. and the treatment of the interest by the U.S. is not the same as it would have been if the ULC was not fiscally transparent.  A payment is considered to meet the "same treatment" test only where the quantum and the character of the payment and the timing of its inclusion is the same as it would be if the ULC was not fiscally transparent.  The U.S. treatment of the interest paid to USCo is different depending on whether ULC is fiscally transparent.  If it is, the interest is ignored.  If not, the interest is included in USCo's income for U.S. tax purposes.

To avoid the denial of Treaty benefits under Article IV(7)(b), cross border debt has been restructured by USCo assigning or refinancing it with an US affiliate ("USFinco") which is treated as a corporation by the U.S. and is a member of USCo's consolidated tax group.  Because the ULC's interest payment to USFinco following the restructuring is included in USFinco's income regardless of whether ULC is fiscally transparent, Article IV(7)(b) should not apply.  This has been confirmed in CRA rulings such as 2009-0348041R3 (the "Restructuring Rulings").  The CRA's position appears to apply regardless of whether the interest is actually taxed in the U.S.  The fact that ULC's interest payment results in both income (USFinco) and expense (USCo's Canadian branch) that will offset each other on a U.S. consolidated return does not appear to affect CRA's view that the "same treatment" test is met.  Where such an offset is permitted, the restructured debt allows USCo to retain Treaty benefits without increasing its net U.S. income.

Ruling 2010-0361591R3 (the "Recent Ruling") is a reminder that the restructured debt may not always produce such ideal results in the U.S.  In simplified terms, the Recent Ruling involved a debt between USCo and its wholly owned ULC which was a limited partner in a 2 tiered  Canadian partnership ("LPs").  For U.S. tax purposes, the ULC was disregarded and the LPs elected to be treated as a corporation.  The debt was likely part of a "double dip" structure to utilize losses and foreign tax credits in the US without reporting the underlying income.  In order to avoid Article IV(7)(b), the ULC debt was refinanced by a USFinco.  The CRA confirmed that  Article IV(7)(b) would not apply to interest paid to USFinco on the refinanced debt.  Unlike the Restructuring Rulings, the taxpayer in the Recent Ruling advised that the payment to USFinco that was otherwise deductible on consolidation would be restricted by the dual consolidated loss rules ("DCL rules") and would result in the U.S. group having a net income inclusion.  While that restriction did not appear to affect the ruling that the interest met the "same treatment" test for purposes of Article IV(7)(b), it would have represented a "cost" of the restructuring.

The DCL rules are complex.  They generally restrict the U.S. deduction of a DCL incurred by a "separate unit" of a U.S. person if there is a "foreign use" of such loss.  A DCL includes any loss of a separate unit, computed under US rules.  A "separate unit" includes a ULC that is fiscally transparent in the U.S.  A "foreign use" of a DCL occurs where the loss is "deductible" by a "foreign corporation" (or certain foreign persons).  The definition of "foreign use" is broad, does not require that a deduction actually be claimed, can include both direct or indirect use and uses that arises from mergers or other asset transfers.  Whether a loss is "deductible" is determined by foreign law.  Whether a particular entity is a "foreign corporation" is determined by U.S. law.  The DCL rules are subject to certain exceptions.  For instance, the rule will not apply if a "domestic use election" is made agreeing that no "foreign use" of the loss will occur during a "certification period".  As well, the rule does not generally restrict the separate unit from claiming the deduction against it own income.

In the Recent Ruling, the restructuring to avoid Article IV(7)(b) likely resulted in the DCL rules applying because the interest payments to US Finco also resulted in USCo's branch recognizing an expense that had been previously ignored by the U.S. resulting in or increasing a loss.  For Canadian tax purposes, ULC likely did not incur a loss.  A "foreign use" of such loss occurred because it could be deducted under Canadian law against income of a "foreign corporation" (i.e. ULC's allocation of income from LP, treated as a foreign corporation by the US).  Because there was an actual foreign use, the exception for "domestic use elections" was not available.  As a result, the DCL rules applied to restrict USCo's branch interest deduction.  This result was based, however, on the structure involved and may not always apply to restructurings of ULC debt.  Interest payments by a ULC "separate unit" will not, in and of itself, result in the DCL rules applying.  The Recent Ruling, however, is a reminder that the U.S. tax consequences of a debt restructuring may differ depending on the circumstances.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions