1 Introduction – Freedom of Contract

3.36 The 1995 Act encourages landlord and tenant to agree the detailed terms of the contract, free of statutory interference, within a flexible framework in which farm diversification can be encouraged.

Consequently, no provision is made in the 1995 Act for dilapidations, liability for repairs and improvements. This is in marked contrast to the 1986 Act, under which these matters were tightly controlled by a uniform code of ‘model clauses’ applicable unless expressly excluded.⁷⁷ Similarly, the Agricultural Holdings Act 1986⁷⁸ provided an arbitration procedure by which the tenancy agreement could be reduced into writing if no written agreement existed, or if certain essential terms (set out in Schedule 1 to the 1986 Act) were omitted. The landlord, for example, could use this procedure to obtain the insertion of a covenant against assignment or subletting, if the tenancy agreement failed to include one. No statutory provision is made in the 1995 Act for obtaining the insertion of essential terms once the tenancy has been concluded, or for reducing an oral tenancy into writing. It is therefore left to the parties to agree the terms and conditions most suitable to the type of tenancy they propose to create, and to include them in the tenancy agreement. The terms cannot be varied after the tenancy has been entered into, other than by agreement of both landlord and tenant. Different consideration may apply when drafting a long fixed term farm business tenancy to those of relevance in a short agreement – for example, the landlord may wish to include a break clause providing for termination in certain circumstances during a long fixed term tenancy, and liability for the repair and maintenance of fixed equipment and buildings will need to be covered in the agreement. They may also want to include terms providing for a diversified farm business to be developed in the holding.

3.37 Clearly, the parties are free to decide their own terms, and those that are appropriate will depend on the circumstances of each case. They cannot be exhaustively defined. Certain terms will be relevant to most agricultural leases however, and the legal effect of their inclusion (or omission) will be an important consideration to be weighed when drafting the farm business tenancy agreement.

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Source: Rodgers Christopher. Agricultural Law. Bloomsbury Publishing,2016. — 914 p.. 2016

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