Compact Contract

A brief look at topical issues in contract

09 August 2019 Hershil Kotak

In Stobart Group v Stobart and Tinkler, the Court of Appeal clarified the approach to interpreting a unilateral notice given under a contract. Stobart and Tinkler had sold Stobart Rail to Stobart Group under a share purchase agreement which included two related, but distinct, notice provisions about tax: Paragraph 7 required Stobart Group to notify › Read More

08 August 2019 Jason Rix

In FSHC v GLAS Trust, the Court of Appeal has set out a new test for common mistake. The trial judge had found, as a matter of fact, that the parties had a “common continuing intention” to execute a document which satisfied an obligation that FSHC had to grant security over a shareholder loan, and do › Read More

29 July 2019 Samuel Webb

In Bridgehouse v BAE Systems, a termination notice based on a company being dissolved remained effective despite the company being restored to the register. BAE agreed to procure the sale, by one of its subsidiaries, of two airfields for GBP 93m to Bridgehouse. BAE was able to terminate the agreement if Bridgehouse was struck off › Read More

19 July 2019 Senem Cilingiroglu

In Ark Shipping v Silverburn Shipping, the Court of Appeal had to deal with the law school classic: when is a term a condition, the breach of which entitles the innocent party to terminate, and when an innominate term, where the ability to terminate depends on the gravity of its breach? While the case was › Read More

05 July 2019 Laurence Ridgway

In Classic Maritime v Limbungan, the Court of Appeal overturned the High Court and awarded substantial damages for breach even though performance ultimately would not have been possible. Limbungan failed to deliver iron ore to Classic Maritime when a flood shut down the mine producing the ore. The High Court, had held that to rely on › Read More

27 June 2019 George Wilders

In 116 Cardamon v MacAlister, the court ordered the full purchase price be paid by way of damages for breach of accounting warranties in a share purchase agreement, having found that the value of a company “as warranted” was greater than the purchase price. Cardamon, an investment company, purchased all the shares in Motorplus, an › Read More

10 June 2019 Bethany Gregory

In Gaia v Abbeygate, Abbeygate, a development company, was required to pay to Gaia GBP 1.4m, for a failure to use reasonable endeavours to enable a commercial site to be redeveloped. Abbeygate contracted with Planet Ice to purchase leases relating to an ice rink. Abbeygate was required to make an additional payment to Planet Ice › Read More

03 June 2019 Tomasz Hara

The Court of Appeal in Merthyr (South Wales) Limited v Merthyr Tydfil County Borough Council provides a concise restatement of the circumstances in which pre-contractual negotiations may (and may not) assist in construing a contract. The case concerned the interpretation of an escrow agreement under which the mining company had to pay funds into an › Read More

21 May 2019 Senem Cilingiroglu

In Times Travel v Pakistan International Airlines, the Court of Appeal held there was no duress where an airline used lawful pressure to achieve a result to which it genuinely believed itself to be entitled, even when it lacked objectively reasonable grounds for that belief. Times Travel sold tickets to flights operated by the airline. › Read More

13 May 2019 Godwin Tan

In CFH Clearing v Merrill Lynch, the High Court held that there was neither an express nor an implied term requiring Merrill Lynch to act in accordance with market practice and reprice or cancel foreign exchange spot trades that were entered into at a time of market disruption. In 2015, CFH Clearing entered into FX › Read More