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Welcome to Compact Contract, a blog where experts from Allen & Overy analyse the latest contract law themes and developments, and what they mean for your business.
04 August 2017 Jason Rix
The Supreme Court has held a constructor liable for the failure to ensure a life of 20 years for the foundations of offshore wind farms it designed and installed despite the fact that the foundations were required to meet an industry standard that contained an error that caused the failure: MT Hojgaard v EON. The › Read More
02 August 2017 Megan Betts
In Stevensdrake v Hunt, the Court of Appeal has provided yet another reminder of the stringency of the test for implied terms affirmed by the Supreme Court in Marks and Spencer v BNP Paribas. It also held that an apparent “umbrella agreement” could not govern or impact the terms of a subsequent Conditional Fee Agreement › Read More
31 July 2017 Rainer Evers
Whether your counter-party has actually repudiated its contract is a big question. If you wrongly treat a contract as having been repudiated and so stop performing that contract yourself, you may face a claim for breach of contract. In Vitol v Beta Renowable, Vitol had agreed to buy biofuel from Beta, but Beta had then › Read More
26 July 2017 Jason Rix
During a conversation, in the Horse and Groom, Mr Ashley said he’d pay Mr Blue £15 million if Mr Blue could get the price of Sports Direct shares to £8. Mr Blue agreed and those present laughed. Thirteen months later the Sports Direct share price had risen from £4 to £8. In Blue v Ashley › Read More
06 July 2017 Daniel Grimwood
In Minerva v Greenland, the court provides some useful pointers as to when a party has met an obligation to use reasonable endeavours to secure a particular outcome. Minerva sold a development site to Greenland. The sale agreement provided that if Minerva was successful in obtaining enhanced planning permission within a certain time, Greenland would pay › Read More
05 July 2017 Alexandra Pedder
In Russell v Stone the court considered the interpretation of standstill agreements and found that they operated to suspend, rather than extend, time for the purposes of limitation. The Russells engaged Stone to manage a construction project. The project was beset by difficulties, for which the Russells blamed Stone. The parties entered into three standstill › Read More
04 July 2017 Robyn Trigg
In Astex Therapeutics v AstraZeneca, AstraZeneca were able to recover $2 million by way of restitution of enrichment for two milestone payments made to Astex by mistake under a collaboration agreement. Astex and AstraZeneca entered into an agreement to develop a BACE inhibitor for treatment of Alzheimer’s disease. After expiry of the collaboration term, the › Read More
30 June 2017 Richard Farnhill
If a breach of contract allows the non-breaching party to save money or avoid a loss, must it give credit for that saving to the contract breaker? That was the issue considered by the Supreme Court in Globalia v Fulton Shipping. The facts were straightforward enough, although as we shall see they split judicial opinion › Read More
30 June 2017 Po-Siann Goh
In African Export-Import Bank v Shebah Exploration & Production Company, the Court of Appeal confirmed the test for when negotiation and amendment of “written standard terms of business” will preclude application of the reasonableness requirement in section 3 of the Unfair Contract Terms Act 1977 (UCTA). Section 3 of UCTA subjects certain exclusion clauses to › Read More
21 June 2017 Jason Rix
In Watson v Watchfinder.co.uk, a refusal to consent to a share option entailed an improper exercise of a contractual discretion. Watchfinder buys and sells luxury pre-owned watches. It granted an option in its shares to Watson and others who were directors of a company that was providing services to Watchfinder. The relevant provision stated “The › Read More