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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.
08 June 2017 Jason Rix
There was an implied duty in a lease that the lessor would not prevent a management company from performing its obligations, but not one that it had to positively cooperate with the company (Wild Duck v Smith  EWHC 1252 (Ch)). The dispute related to the development of holiday homes in the Cotswolds by the › Read More
05 June 2017 Alex Hiendl
In Associated British Ports v Tata Steel, the court upheld a provision in a 25-year licence which referred a failure to renegotiate terms in certain circumstances to arbitration. The clause in question, provided that either party could serve notice on the other to renegotiate the agreed terms “in the event of any major physical or › Read More
26 May 2017 Po-Siann Goh
In Persimmon Homes v Ove Arup, the Court of Appeal declined to apply the contra proferentem rule to an exemption clause in a major construction contract. The contra proferentem rule, set out by the Privy Council in Canada Steamship in the context of excluding liability for negligence, requires any ambiguity to be resolved against the › Read More
25 May 2017 Samantha Holland
In Baturina v Chistyakov the High Court refused to imply a term into a joint venture general framework agreement, which contained only outline terms, that the funding advanced by the claimant be used only for the purposes of the joint venture projects. The decision relates to a “bitter” commercial dispute between two wealthy Russian entrepreneurs over › 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
24 March 2017 Jason Rix
The Court of Appeal has held that an express variation of some terms in a contract did not create an implied variation of another term in the same the contract (Ilkerler v Perkins). Perkins had entered into a distributorship agreement with Ilkerler, a Turkish company. Perkins gave notice to terminate the agreement and Ilkerler sued for wrongful › Read More
23 March 2017 Samantha Holland
A clause undertaking to use all reasonable endeavours to make an agreement with a third party is enforceable (Astor Management v Atalaya Mining). Astor argued that two of the defendants had breached an undertaking to use “all reasonable endeavours” to obtain a debt facility. The defendants raised a number of arguments in defence, including that › 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