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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.

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

Clearing the high-jump: implied term makes it over the M&S v BNP Paribas

Briony Langley-Miles

In Zedra Trust Company v The Hut Group, the High Court found that a term could be implied into a share purchase agreement in relation to the provision of an auditors’ report. Zedra had sold the entire issued capital of Cend to The Hut Group. The share purchase agreement contained a mechanism for the seller Read More

“Ohpen” for business: High Court upholds mediation clause

Godwin Tan

In Ohpen v Invesco, the High Court held that the parties’ contractually agreed alternative dispute resolution procedure operated as a condition precedent to litigation. As a result, court proceedings were stayed to allow mediation to take place. Invesco engaged Ohpen to develop a platform for investments. The contract included a multi-tiered dispute resolution procedure. The Read More

Take not(ic)e – the correct way to interpret a unilateral notice

Hershil Kotak

In Stobart Group v Stobart and Tinkler, the Court of Appeal clarified the approach to interpreting a unilateral notice given under a contract. Stobart and Tinkler had sold Stobart Rail to Stobart Group under a share purchase agreement which included two related, but distinct, notice provisions about tax: Paragraph 7 required Stobart Group to notify Read More

A new test for when the court will rectify a common mistake

Jason Rix

In FSHC v GLAS Trust, the Court of Appeal has set out a new test for common mistake. The trial judge had found, as a matter of fact, that the parties had a “common continuing intention” to execute a document which satisfied an obligation that FSHC had to grant security over a shareholder loan, and do Read More

Termination based on company being struck off not affected by restoration

Samuel Webb

In Bridgehouse v BAE Systems, a termination notice based on a company being dissolved remained effective despite the company being restored to the register. BAE agreed to procure the sale, by one of its subsidiaries, of two airfields for GBP 93m to Bridgehouse. BAE was able to terminate the agreement if Bridgehouse was struck off Read More

Innominate or condition? Check the consequences or you’ll wreck termination

Senem Cilingiroglu

In Ark Shipping v Silverburn Shipping, the Court of Appeal had to deal with the law school classic: when is a term a condition, the breach of which entitles the innocent party to terminate, and when an innominate term, where the ability to terminate depends on the gravity of its breach? While the case was Read More

Force majeure, causation and damages – a “Classic” conundrum

Laurence Ridgway

In Classic Maritime v Limbungan, the Court of Appeal overturned the High Court and awarded substantial damages for breach even though performance ultimately would not have been possible. Limbungan failed to deliver iron ore to Classic Maritime when a flood shut down the mine producing the ore. The High Court, had held that to rely on Read More

Damages under SPA capable of being more than purchase price

George Wilders

In 116 Cardamon v MacAlister, the court ordered the full purchase price be paid by way of damages for breach of accounting warranties in a share purchase agreement, having found that the value of a company “as warranted” was greater than the purchase price. Cardamon, an investment company, purchased all the shares in Motorplus, an Read More

Failure to use reasonable endeavours: skating on thin ice

Bethany Gregory

In Gaia v Abbeygate, Abbeygate, a development company, was required to pay to Gaia GBP 1.4m, for a failure to use reasonable endeavours to enable a commercial site to be redeveloped. Abbeygate contracted with Planet Ice to purchase leases relating to an ice rink. Abbeygate was required to make an additional payment to Planet Ice Read More