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.

The principles for a disclosed principal

Godwin Tan

In Filatona v Navigator, the Court of Appeal held that a disclosed principal was entitled to bring a claim under a contract signed on their behalf between their agent and a third party. While the “terms and surrounding circumstances of the contract” may exclude a principal from the contract, the threshold to meet is exceptionally Read More

Morley and me: good faith, man’s best friend?

Jason Rix

A couple of recent cases have looked at the vexed questions of contractual discretion and good faith. In both, the arguments have been unsuccessful (thankfully, given the facts). But the appetite for raising these arguments does not seem to have abated. In Morley v RBS, a property developer defaulted on a loan and claimed damages Read More

Nom nom: Court grills Kebab

Helen Biggin

In Kabab-ji v Kout Food, the Court of Appeal considered the “estoppel test” from the Supreme Court’s decision in MWB v Rock: a party can be estopped from relying on a no oral modification clause if their words or conduct unequivocally represented that the modification was valid. Kabab-ji argued, unsuccessfully, that provisions of good faith Read More

You don’t gotta have good faith, faith, faith

Natalie Kaminski

In proceedings over disputed commission payments, the High Court found no implied obligation of good faith in a contract between an independent financial advisor, Mr Wales, and his client, CBRE the property management business: Wales v CBRE. The contract related to Wales’ advisory services about a group pension scheme, under which CBRE’s employees obtained pensions Read More

“Please go ahead with the below…” a binding contract?

Ellie Ismaili

In Athena v Superdrug, the court held that a two-email exchange—culminating with “Please go ahead with the below…”—amounted to a binding contract. In the exchange, Athena asked Superdrug to confirm that a stated minimum number of orders was being placed. Superdrug responded saying “Please go ahead with the below…” Superdrug, argued there was no contract Read More

Bah humbug: take care over your fee definitions

Rhona Egerton

In Blackstar v Cheyne Capital, the Court of Appeal held that restructuring an investment meant it was no longer subject to the original arrangement so the right to a fee was extinguished. Starting with a memorandum of understanding, the parties had entered into various agreements between 2006 and 2009 that set out the terms on Read More

Nevermind the John Lewis ad, the latest update to Lewison is out

Jason Rix

Nevermind the John Lewis ad, the Christmas event for the true contract law geek is the supplement to The Interpretation of Contracts by Sir Kim Lewison. So here’s a summary of some of what made it to latest update (just out, but the cut-off date for developments is 31 July 2019): Deleted words: unsurprisingly, Lewison Read More

Liverpool wins another big match as New Balance loses its shirt

Oliver Rule

[It’s rare for a contract case to be covered by talkSPORT, ESPN, or The Sun, nevermind one concerning good faith. But in case you’ve missed their coverage, with thanks to ardent LFC supporter Oli Rule, here’s Compact Contract’s take on New Balance v Liverpool. Or, as the court put it, “This is (another) dispute about Read More

Problems with no set-off clauses: prevention is better than cure

Philip Carstairs

In TMF Trustee v Fire Navigation, the court held that a no set-off clause did not stop borrowers from relying on the “prevention principle” namely that the alleged breach was caused by the lenders. Set-off is a common law right that a debtor has to net obligations it owes to a creditor off against obligations Read More

Is variation the spice of life? Not according to the Court of Appeal…

Becky Valori

In Great Dunmow Estates v Crest Nicholson the Court of Appeal held that a signed agreement over the valuation date for an expert determination was not contractually binding since it did not comply with a variation clause in the underlying contract. The dispute related to a conditional contract for the sale of land which provided for Read More