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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.

An unfair relationship? Bank’s basis clauses upheld

Sophie Walker

In Carney v Rothschild, the High Court considered the efficacy of “basis clauses” in the context of a financial mis-selling claim in which it was alleged that an unfair relationship under the Consumer Credit Act 1974 had arisen. The claimants, four British expats living in Spain, had borrowed funds from the bank, secured against their Read More

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Plus ça change … the Supreme Court rules on the enforceability of “no oral variation” clauses

Richard Farnhill

This morning the Supreme Court handed down its judgment in Rock Advertising v MWB Business. It reversed the Court of Appeal and found that clauses limiting the parties’ ability to vary their contract are binding. A purported variation to the contract that fails to comply with the clause will therefore be ineffective. MWB had rented Read More

Paint my Ride – contextual interpretation favoured over a literal one

Andrzej O'Leary

In Paintshield Ltd v XPEL Technologies Corp, the High Court favoured a contextual interpretation over a literal one to find that XPEL had not breached an IP licence agreement. Paintshield had licensed to XPEL patterns for paint protection films for the bodywork of cars. These patterns were uploaded by Paintshield to a database owned by XPEL Read More

Breach of good faith obligation in healthcare services agreement

Jin Ooi

In Health & Case Management Ltd v The Physiotherapy Network, the court held there was no contractual obligation on HCML to make a certain number of referrals.  However, HCML had breached its good faith obligation by using TPN’s data to set up a rival network. Below I have picked out the court’s findings on the provisions in Read More

Recitals – the Premier League of intention

Lucy Judge

In Blackpool FC Properties v Baltic International Bank, the recitals of an agreement for the development of the club’s stadium were influential in informing the natural and ordinary meaning of the clause in dispute. Baltic’s loan, and BFC Properties’ commitment, was to cover phases one and two of the development. A recital provided that the Read More

Pour encourager les autres – when can your damages exceed your loss?

Richard Farnhill

In Morris-Garner v One Step, the Supreme Court has, for the first time, considered so-called Wrotham Park damages. Damages are there to compensate loss. Normally. In some cases, however, the courts go further and reverse, in whole or in part, the defendant’s gain flowing from its breach, regardless of whether the claimant suffered any loss. Read More

Exclusive jurisdiction clauses: a continuing obligation

Crawford Jamieson

In AMT Futures v Boural the High Court has given guidance on the continuing nature of obligations under an exclusive jurisdiction clause. AMT is an “execution only” derivatives broker involved in litigation in Germany with certain of its former clients. The contract between AMT and those clients contained a clause which provided that they  ‘submit Read More

Court of Appeal shows certainty to be its forte

Muir MacKean

In Openwork v Forte, the Court of Appeal confirmed that finding a clause lacks certainty is only ever a last resort. A provision, the overall effect of which is explicit despite its terms being incomplete, may still be sufficiently certain in effect to be enforced. Mr Forte, a financial adviser, had entered into a contract Read More

Inspect before you sign: acceptance certificates and contractual estoppel

Jason Rix

In Aquila v Onur, the court confirmed the effectiveness of contractual estoppel and acceptance certificates. Aquila agreed to lease an aircraft engine to Onur. When it entered into the lease, Onur signed an acceptance certificate. A major engine failure occurred (luckily without loss of life or serious injury). Aquila claimed for unpaid rent and other losses. Onur retorted Read More