dcsimg

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.

Will your liquidated damages survive termination?

Jon Turnbull

In Triple Point v PTT, the Court of Appeal considered to what extent liquidated damages continue to be payable when a project falls into delay and the contract is subsequently terminated or the contractor replaced. This situation is common in construction projects – where liquidated damages clauses are ubiquitous (albeit this case was in relation Read More

Triumph v Primus: A case study on breach of warranty

Elizabeth Wall

Triumph v Primus included all the usual elements of a warranty dispute: an attempt to avoid the limitations by arguing a claim was not a “warranty claim”; an argument over disclosure; and, a defence around the service and contents of the notice of breach. Ultimately though, it was a warranty about the careful preparation of Read More

A (small) matter of construction: whether a breach was material

Deekshitha Swarna

In Mears v Costplan, the Court of Appeal looked at the question of material breach. Pickstock contracted with Plymouth to build two blocks of student accommodation. Mears entered into an agreement for lease of the property with Plymouth. The agreement for lease prohibited Plymouth from making any variations to the building that “materially affect the Read More

Breach of warranty: claim for hypothetical indemnity? Don’t bank on it.

Flo Wang

In Oversea-China Banking Corporation v ING, the court held that damages based on a hypothetical indemnity were not recoverable for breach of warranty of quality on a share sale. OCBC entered into a sale and purchase agreement with ING to purchase shares in ING Asia. Subsequently, ING Asia paid USD 14.5m to Lehman Brothers to Read More

You’ve got mail: the High Court puts a stamp on good faith and relational contracts

Jason Rix

In Bates v Post Office the court has implied a duty to act in good faith into a contract on the basis of it being relational. This dispute is between 550 claimants, most sub-postmasters, and the Post Office. It concerns Horizon, an electronic point of sale and accounting system. The claimants say defects in Horizon Read More

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

Default interest rate of one-month LIBOR plus 12% is no problem

Bianca Vasilache

In Cargill International Trading v Uttam Galva Steels, the High Court decided by summary judgment that a default interest rate of one-month LIBOR plus 12% was valid and enforceable. It did not amount to a penalty, it was validly incorporated into the contract and it was not illegal under Indian law. In 2015, Cargill entered Read More

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

Discretion is the better part of valour – navigating contractual decision-making

Jason Rix

In this article for the Commercial Litigation Journal I run through the recent cases looking at decision-making provisions in contracts and I suggest how best to interpret them and also offer some tips for drafting.   (Also available at www.lawjournals.co.uk.) Read More

Brexit does not mean exit for the EMA

Oliver Rule

Nearly three years after the referendum, Britain still hasn’t decided what sort of Brexit it wants. For the European Medicines Agency, however, the prospect of Brexit has already meant a departure from its shiny new headquarters in London, its relocation to Amsterdam even being written into EU law in 2018. Just as Britain has struggled Read More