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.

Implied terms: hindsight not relevant; deleted terms may be

Ben Brooks

Bou-Simon v BGC Brokers is a reminder from the Court of Appeal that you can’t imply a term just because, in hindsight, it makes sense to. The test is much more stringent than that. Also, deletions from a previous draft of a contract may negative the implication of a term in the form of deleted words. Read More

Project Voldemort and the Riddle of force majeure

Benjamin Scrace

In Seadrill Ghana Operations v Tullow Ghana, the High Court found that a defaulting party cannot rely upon “force majeure” to terminate a contract if only one of two events preventing performance is a force majeure event. Oil company Tullow hired a semi-submersible drilling rig from Seadrill for operations off the Ghanaian coast, including in Read More

Top bins? An entire agreement clause effective to preclude a misrepresentation claim

David Siesage

In NF Football Investments v NFFC Group Holdings, the court struck out the purchaser’s claim for misrepresentation, as the claims were excluded by an entire agreement clause in the share purchase agreement. The purchaser of Nottingham Forest Football Club complained that the seller had represented the club’s liabilities as as being £6.5m when in fact Read More

All liability exclusion neither onerous nor unreasonable

Crawford Jamieson

In Goodlife v Hall Protection, the Court of Appeal held an all liability exclusion clause was neither onerous nor unreasonable. Goodlife bought a fire suppression system from Hall Fire. Despite the purchase, Goodlife suffered a devastating fire. Hall Fire’s standard conditions excluded all liability whatsoever for failure of the safety equipment. Goodlife argued that it Read More

Have no reliance on non-reliance? Clauses excluding misrepresentation must be reasonable.

Jon Turnbull

When commercial parties contract, they usually want to restrict their potential liabilities to the four corners of the document. The law sometimes has other ideas. Misrepresentation is a classic example. Liability for misrepresentation can be excluded by commonly found “non-reliance” clauses (often found within an entire agreement clause). These clauses set up a contractual estoppel; Read More

Court determines date of Greek exit from Turkish bank

Shreya Aren

In Aras v National Bank of Greece, the court looked at three incentive fee agreements and determined the date of the exit event triggering the payment and the appropriate currency exchange rate. Set against the backdrop of the Greek economic crisis and a restructuring plan for the National Bank of Greece, the agreements were to Read More

Is my document binding?

Jason Rix

Last week, Richard Hooley spoke to us about what makes an agreement binding. He began with a quote from Blue v Ashley (incidentally, the post on that case is the most read on this blog): “…no reasonable person present in the Horse & Groom … would have thought that the offer to pay Mr Blue £15 million Read More

Discretion is the better part of valour? Condition precedent halts MF Global CVA.

Oliver Rule

In Heis v FSCS, the Court of Appeal stepped in to prevent an innovative Company Voluntary Arrangement, in which a small number of MF Global UK creditors had agreed to buy out the majority for £64m, from coming into effect. The case turned on the meaning of a condition precedent. If there were a “Disputed Read More

Oops I did it again – can a mistake render a contract void?

Daniel Grimwood

In Triple Seven v Azman the court found that although the parties had entered into aircraft leasing contracts on the basis of a common assumption, which turned out to be wrong, the mistake was not sufficiently fundamental to render the contracts void. Even if it had been, the parties had allocated that risk. Nigerian airline Azman Read More

New Balance and Fellaini … have you signed on the dotted line?

Megan Betts

In Rosalina v New Balance the court found that, having considered the full run of communications, the parties only intended to be bound when all parties had signed.  As they had not, there was no binding agreement. An attempt to rely on an open-end duty to negotiate in good faith was void for uncertainty. Under a Read More