Welcome to Compact Contract where Allen & Overy litigators analyse contract law what it means for your business.

Damages-based agreement doesn’t exclude costs on early termination in retainer: DBA A-OK!

Robert Steele

In Zuberi v Lexlaw, the Court of Appeal held that “damages-based agreement” should be construed narrowly, comprising only the particular provisions of a retainer dealing with payments out of recoveries, not the retainer as a whole. It also held that the Damages-Based Agreements Regulations 2013 do not regulate fees payable to lawyers in the event Read More

Is possession of a contract nine-tenths of the law?

Max Sherrard

In Solaria v Department for Business, the Court of Appeal held that a signed and part-performed commercial contract was, prima facie, a “possession” for the purpose of Article 1, Protocol 1 of the European Convention for the Protection of Human Rights. That a contract is assignable is not the legal test to apply, simply a Read More

Exemption and non-reliance clauses

Jason Rix

Richard Hooley spoke to us this lunchtime about exemption clauses. Interpretation He began by quoting from Andrew Burrows’ A Restatement of the English Law of Contract (which has recently been updated) and its excellent summary of contractual interpretation. Paraphrased it says: Ask what the clause, “viewed in the light of the whole contract, would mean Read More

The ABCs of default

Charlotte Page

In ABC v Network Rail, the Court of Appeal confirmed that “default” simply means a failure to comply with contractual obligations where the context does not call for an alternative construction. ABC was contracted to upgrade a Network Rail power supply. It was entitled to payment under a “total costs” provision, where Network Rail could Read More

Court of Appeal artfully navigates questions on agency and privity

Alexandra Pedder

In Fairlight v Sotheby’s, the Court of Appeal considered whether a line of authorities relating to sub-agency could be applied to preclude privity of contract between the parties, and to excuse Fairlight from returning proceeds received from the sale of a painting which had been rescinded on authenticity grounds. The facts were as follows: Fairlight Read More

The force of “subject to contract”

Natalie Kaminski

The Court of Appeal has held that a judge had “seriously undervalued” the force of using “subject to contract” wording in written correspondence between solicitors. Joanne Properties v Moneything Capital echoes what the courts have held for over a hundred years; the effect statement is that the matter remains in negotiation until a formal contract Read More

Judge hadn’t erred by referring to pre-contractual negotiations

Aashna Agarwal

The Court of Appeal has briefly considered the old chestnut of the admissibility of pre-contractual negotiations as an aid to interpreting an agreement: Morris Homes v Cheshire West and Chester Council. Morris and the Council had entered into an agreement under which Morris had to pay the Council a percentage of its sales revenue in Read More

Harsh but fair? Implied terms won’t save you if written agreement clear

Hannah Pye

The Court of Appeal has confirmed, if confirmation were needed, that no term may be implied into an agreement where that implied term conflicts with the express wording of that agreement, even if the result may seem harsh: Joseph v Deloitte. Joseph was an equity partner at Deloitte and had been issued, by the board, Read More

Should I include an express and general duty of good faith in my shareholders’ agreement?

Philippa Richards

Should I include an express and general duty of good faith in my shareholders’ agreement? The answer to this depends, of course, on the circumstances and who you’re acting for. What is important is to appreciate the consequences of doing so. This may be demonstrated by a High Court decision from the summer relating to an Read More

Covid, crises and legally what we may be able to learn

Jason Rix

Back in March, Karen Birch and I seemed to spend much of our waking hours fielding urgent and complex Covid-related legal queries. In the wake of that immediate surge, Karen reflected that, at least from a legal perspective, there seemed to be a number of themes to what happens in crisis, and that we ought Read More