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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.
25 July 2018 Oliver Rule
In Al Jaber v Al Ibrahim, the Court of Appeal held that interest should not be implied into an oral loan agreement. Back in 2001, the claimant lent USD 30m to the defendants to finance an Arabic 24 hour news channel. The parties never mentioned interest and the arrangement was not documented, and for a › Read More
24 July 2018 Thomas Cusworth
Like Odysseus in Homer’s Odyssey, BNY Mellon had to choose between the lesser of two evils in National Bank of Kazakhstan v Bank Of New York Mellon. While Odysseus faced Charybdis, a dangerous whirlpool, on one side of the Straits of Messina, and on the other Scylla, a monster living in hazardous rocks, BNY Mellon › Read More
23 July 2018 Ram Mashru
In Doherty v Fannigan Holdings the court held that the obligation to pay in a share sale agreement was a dependent one. The seller could only enforce this obligation if it had performed its part of the bargain: to transfer title in the shares. Mr Doherty and Fannagin Holdings established a joint venture to develop land › Read More
12 July 2018 Ben Brooks
Bou-Simon v BGC Brokers is a reminder from the Court of Appeal that you can’t imply a term just because, in hindsight, it makes sense to. The test is much more stringent than that. Also, deletions from a previous draft of a contract may negative the implication of a term in the form of deleted words. › Read More
06 July 2018 Benjamin Scrace
In Seadrill Ghana Operations v Tullow Ghana, the High Court found that a defaulting party cannot rely upon “force majeure” to terminate a contract if only one of two events preventing performance is a force majeure event. Oil company Tullow hired a semi-submersible drilling rig from Seadrill for operations off the Ghanaian coast, including in › Read More
30 June 2018 David Siesage
In NF Football Investments v NFFC Group Holdings, the court struck out the purchaser’s claim for misrepresentation, as the claims were excluded by an entire agreement clause in the share purchase agreement. The purchaser of Nottingham Forest Football Club complained that the seller had represented the club’s liabilities as as being £6.5m when in fact › Read More
26 June 2018 Crawford Jamieson
In Goodlife v Hall Protection, the Court of Appeal held an all liability exclusion clause was neither onerous nor unreasonable. Goodlife bought a fire suppression system from Hall Fire. Despite the purchase, Goodlife suffered a devastating fire. Hall Fire’s standard conditions excluded all liability whatsoever for failure of the safety equipment. Goodlife argued that it › Read More
22 June 2018 Jon Turnbull
When commercial parties contract, they usually want to restrict their potential liabilities to the four corners of the document. The law sometimes has other ideas. Misrepresentation is a classic example. Liability for misrepresentation can be excluded by commonly found “non-reliance” clauses (often found within an entire agreement clause). These clauses set up a contractual estoppel; › Read More
21 June 2018 Shreya Aren
In Aras v National Bank of Greece, the court looked at three incentive fee agreements and determined the date of the exit event triggering the payment and the appropriate currency exchange rate. Set against the backdrop of the Greek economic crisis and a restructuring plan for the National Bank of Greece, the agreements were to › Read More
18 June 2018 Jason Rix
Last week, Richard Hooley spoke to us about what makes an agreement binding. He began with a quote from Blue v Ashley (incidentally, the post on that case is the most read on this blog): “…no reasonable person present in the Horse & Groom … would have thought that the offer to pay Mr Blue £15 million › Read More