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Misc

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

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Pre-contractual negotiations: rarely a gold mine

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

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Lawful pressure in contractual negotiation: Duress-t in peace

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

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What you don’t know can help you – contracts and rights of third parties

Richard Farnhill

The Court of Appeal has found that a third party beneficiary under the Contracts (Rights of Third Parties) Act 1999 can enforce an agreement entered into for its benefit, even if it was unaware of that agreement at all relevant times prior to commencing proceedings under it (Chudley v Clydesdale Bank). Arck LLP was incorporated Read More

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Inducing breach of contract? Don’t “discount” knowledge and intention!

Muir MacKean

Can a party tortiously induce a breach of contract without sufficient knowledge and intention? “No”, as confirmed in The Beans Group v MyUniDays – but liability may arise if activity continues knowingly and after notification of the breach. MyUniDays, which offers “Student Verification Technology” to companies providing student discounts, entered into contracts with an online Read More

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Estate agent’s commission: Supreme Court on binding agreements and implied terms

Jason Rix

This morning the Supreme Court found, overturning the Court of Appeal, that a short telephone call was enough to create a binding agreement between an estate agent and his client, even though the trigger event for the commission had not been specified (Wells v Devani). There were very different accounts of the crucial phone call. Read More

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A Wolff in lamb’s clothing: procuring a breach of contract – an economic tort with teeth

Laurence Ridgway

In Wolff v Trinity Logistics USA, the Court of Appeal considered the elements of the tort of procuring a breach of contract. Wolff was a director of a company that imported clothing. Shipments from the manufacturers were carried out under a contract between Trinity Europe and Trinity Bangladesh (both connected to Trinity USA). Under this Read More

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Parental guidance: how to guarantee the construction of an indemnity clause

Claudia Barry

In GPP v Solar the court offers guidance on distinguishing a guarantee from an indemnity, and holds that two equitable principles of guarantee law do not apply to indemnities. GPP, as employer, entered into Engineering, Procurement and Construction contracts with a (now insolvent) contractor. Solar, parent of the contractor, was sued by GPP as guarantor Read More

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Pay less notice valid despite only cross-referencing basis of sum

Nathalie Burn

In S&T v Grove Developments the Court of Appeal held that Grove’s “pay less notice” was valid despite it only cross-referencing, rather than attaching, a spreadsheet detailing its sum. The court felt this could not give rise to any misunderstanding in the mind of a reasonable recipient standing in the shoes of S&T. Section 111 (4) of Read More

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Egg on your face: weaker test for inducement where misrepresentation fraudulent?

Georgina Thomson

When NIVE sued Rembrandt for breach of its contract for the supply of egg products, Rembrandt claimed it had been induced to enter the contract by NIVE’s fraudulent misrepresentation. The court agreed that the representation had been made, but had it induced Rembrandt to enter the contract (NIVE v Rembrant)? In recent years the test Read More

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