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.

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

Quincecare: can you exclude the implied duty?

Jason Rix

In a recent decision, upholding a refusal to grant summary judgment, the Court of Appeal held that an entire agreement clause and an exemption clause were ineffective to prevent a Quincecare duty arising or to exclude liability under that duty. In simplified form, a Quincecare duty means that a bank must not make a payment Read More

Sanctioned: “in order to comply with any mandatory provision of law”

Briony Langley-Miles

In Lamesa v Cynergy, the High Court clarified the meaning of “in order to comply with any mandatory provision of law” in an English law governed facility agreement, allowing the borrower to avoid making payments where to do so might breach U.S. federal law imposing secondary sanctions. Lamesa, acting as lender, was a Cypriot company Read More

Sheffield United: performance required on and off the pitch

David Rowlands

In UTB v Sheffield United, the court resolved a dispute between the two shareholders of a company operating a football club. It ordered specific performance so that one shareholder, SUL, had to sell its 50% shareholding to the other, UTB, pursuant to the exercise of a call notice. The shareholders had entered into an investment Read More

Peru-sing the interpretation of a mistaken oral agreement

Bethany Gregory

In Lehman Brothers v Exotix Partners, the parties to an oral trade in Peruvian government global depository notes were both mistaken as to their value, resulting in the buyer receiving a windfall which it was effectively ordered to repay. Lehman Brothers and Exotix, a securities broker, entered into a trade by telephone on a recorded Read More

Effectiveness of no waiver provision upheld

Sykes Mitchell

In Sumitomo Mitsui Banking Corporation v Euler Hermes, an assignment was not effective where a requirement for a confirmation had not been waived in compliance with a “no waiver” provision; but a power of attorney saved the day. As part of a public private partnership scheme for the construction of a waste treatment facility in Read More

Pride & Unfair Prejudice: shareholders’ good faith obligations

Senem Cilingiroglu

In Brown v Bray and Sharp, Brown, a minority shareholder, applied for relief under section 994 of the Companies Act 2006, claiming Bray and Sharp, who were majority shareholders, had unfairly prejudiced the company’s affairs by breaching a contractual duty of good faith. The parties were directors as well as shareholders. Eventually, their relationship deteriorated. Read More

Entire agreement clause lacks teeth to prevent dental services being validly varied

Claudia Barry

In NHS v Vasant, the Court of Appeal held that a contract had been validly varied and so the NHS could not terminate contractual arrangements under which dentists supplied Intermediate Minor Oral Surgery (IMOS) services. Three dentists supplied general dental services to the NHS each under a GDS contract agreed in 2006. This contained an Read More