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.

Limiting liability under your contract

Jason Rix

Last month, a group of us (Erwan Poisson, Joost Everaert, Julie Metois, James Freeman and I) gave some training on limiting liability in commercial contracts. So far so unsurprising. The sting in tail was that we were covering the topic under Belgian, French and English law. This served to highlight some legal and cultural differences Read More

Implying an obligation to indemnify: the Jersey law perspective

William Palmer

In First Names v IFG, the English High Court determined that, under Jersey law, a company’s implied obligation to indemnify an employee will arise where it is considered necessary to ensure the employee’s employment contract is not futile, inefficacious or absurd. First Names was incorporated in Jersey and provided corporate and trust-management services. As part Read More

A (conditional) free for all?

Lucy Judge

Budana v Leeds Hospital is about Conditional Fee Agreements and how they may be transferred. Ms Budana’s original solicitors, Baker Rees, represented her in a personal injury claim under a CFA with a 100% success fee, entered into under the pre-Jackson reform regime. Baker Rees purported to assign its book of personal injury claims, and CFAs, Read More

What does “to the extent that” mean in a warranty claim accounts exclusion?

Philippa Richards

The question of what “to the extent that” means was recently considered by the High Court in Zayo Group v. Ainger. In that case, the seller was liable under a sale purchase agreement for a warranty claim except “to the extent that” a provision (for a target company liability) was made in the accounts. Did Read More

Contractual right or discretion? How to tell the difference and why it matters.

Jason Rix

Richard Hooley gave Allen & Overy a talk about “contractual discretions” versus contractual rights. It is a topic we have covered a number of times on this blog and, one which still the courts are grappling with. Richard covered a lot of ground; below I highlight a few practical points he drew out. Contractual discretion has Read More

No chinks in the chain of causation: liability for continuing loss and third party acts

Samantha Holland

Questions of causation are tricky for lawyers and highly fact dependent. This case is an example of how it can be difficult to change a tribunal’s finding on causation: St Shipping v Space Shipping. A charterer hired a vessel and sub-hired it on to a third party that intended, unlawfully, to export crude oil from Read More

Retro scooters: a licence to ride?

Adrian Dykes

In Scomadi v RA Engineering, the High Court construed a poorly drafted agreement against a licensor, meaning that the licensee could continue to manufacture the licensor’s retro scooter, even after the original agreement was terminated. Scomadi entered an agreement with Hanwei for the design and manufacture of a retro scooter. The agreement provided that Scomadi Read More

Breaking the chain: when breach is not the cause of loss

Michaela Widdowson-Kidd

By designing a hotel for twice the budget, Fosters breached the contract. But, this was not the reason the developer could not secure funding for the project and therefore Fosters was not liable for the developer’s lost profits: Riva v Foster + Partners. The developer engaged Fosters to design a hotel for £70 million pounds; Read More

Ejusdem generis – let’s get down to the specifics

Sherin Bhasker

Was the sale of properties for social housing, the transfer of land for “other social/community purposes”? Applying the ejusdem generis rule in Burrows Investments v Ward Homes, the Court of Appeal held that it was not. Burrows, a property investment company, entered into a contract for the sale of land with Ward, a developer. Ward’s right Read More

Remedies are not exclusive unless you’re both on the same page

Lucy Judge

Specified remedies for breach of certain provisions in a contract will not be exclusive remedies unless the parties clearly intend to restrict the available remedies: Harcap Ltd v FK Generators. HarCap, a private equity investor, had entered into an agreement with FK Generators to find USD22m bridging finance for a power plant. This contained an exclusivity Read More