Compact Contract

A brief look at topical issues in contract

04 August 2017 - Jason Rix

The Supreme Court has held a constructor liable for the failure to ensure a life of 20 years for the foundations of offshore wind farms it designed and installed despite the fact that the foundations were required to meet an industry standard that contained an error that caused the failure: MT Hojgaard v EON. The › Read More

05 July 2017 - Alexandra Pedder

In Russell v Stone the court considered the interpretation of standstill agreements and found that they operated to suspend, rather than extend, time for the purposes of limitation. The Russells engaged Stone to manage a construction project. The project was beset by difficulties, for which the Russells blamed Stone. The parties entered into three standstill › Read More

04 July 2017 - Robyn Trigg

In Astex Therapeutics v AstraZeneca, AstraZeneca were able to recover $2 million by way of restitution of enrichment for two milestone payments made to Astex by mistake under a collaboration agreement. Astex and AstraZeneca entered into an agreement to develop a BACE inhibitor for treatment of Alzheimer’s disease.  After expiry of the collaboration term, the › Read More

24 May 2017 - Alexandra Pedder

The Court of Appeal has applied the tests in Rainy Sky (business common sense) and Arnold v Britton (natural meaning of the words) to interpret a construction contract. On the facts, figures for minimum acceptable performance levels described as “examples” were found to be binding (Sutton v Rydon). Although the court did not refer to the most › Read More

10 May 2017 - Chantal Du Toit

A number of A&O colleagues from the London arbitration team recently attended the Annual Energy Disputes Seminar hosted by Quadrant Chambers, entitled “Energy Disputes: Lawyering Your Way to a Solution”. During the evening Simon Rainey QC gave his take on the emerging principles of contractual interpretation in energy disputes. He ran through the following examples: › Read More

31 March 2017 - Stacey McEvoy

In Wood v Capita, the Supreme Court has looked again at the principles of contractual interpretation. To recap, the Supreme Court in Arnold v Britton had cautioned against commercial common sense overriding the natural meaning of a provision. In Rainy Sky, it had explained that, if there were two possible constructions, the court was entitled to prefer the construction › Read More

10 March 2017 - Jason Rix

This week Lawson Caisley and Richard Farnhill hosted an event for General Counsel looking at boilerplate provisions in contracts. Richard noted that, while contracts are being interpreted more literally, the treatment of certain boilerplate provisions by the courts has not followed the natural meaning of the words. According to Richard, there are three types of › Read More

08 March 2017 - Rainer Evers

Where a party’s performance is conditional, that condition must be satisfied even where it has become futile to do so (Astor Management v Atalaya Mining). Astor argued that a contractual obligation on the Atalya to pay deferred consideration had been triggered. Atalaya had bought Astor’s shares in a mining project. The deferred consideration was payable › Read More

01 March 2017 - Po-Siann Goh

In Toomey Motors v Chevrolet, the Commercial Court considered the legal effect of recitals to a contract. In this case the parties had described, by way of recital and in some detail, what they saw as the purpose of the agreement. This wording was referred to as the “purpose clause”. As a general rule, recitals › Read More

30 November 2016 - Carlo Sushant Chari

National Bank of Abu Dhabi  v BP Oil International highlights the dangers of contracts which evolve over time and which are a combination of standard or boilerplate clauses from other contracts with or without modifications. The “belt and braces” approach is not always the best route to clarity. Nonetheless the court will ascribe a meaning to › Read More