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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.

Inspect before you sign: acceptance certificates and contractual estoppel

Jason Rix

In Aquila v Onur, the court confirmed the effectiveness of contractual estoppel and acceptance certificates. Aquila agreed to lease an aircraft engine to Onur. When it entered into the lease, Onur signed an acceptance certificate. A major engine failure occurred (luckily without loss of life or serious injury). Aquila claimed for unpaid rent and other losses. Onur retorted Read More

Mocha-Mamas, implied terms and entire agreement clauses

David Siesage

In Hipwell v Szurek, the Court of Appeal considered an entire agreement clause and implied a term into a lease making the landlord responsible for the installation and maintenance of electric wiring. Ms Szurek rented premises from Mr Hipwell, which she ran as a café called Mocha-Mamas. One year into the lease, Ms Szurek began Read More

Fetter not risk it: avoiding penalties and curtailing contractual rights

Jason Rix

Last week, Richard Hooley gave one of his regular talks on recent developments in banking and finance law. Below I have set out a couple of knotty contractual issues I noted down: “Clever” (or careful) drafting may stop a clause being a penalty (Holyoake v Candy). A requirement to pay a redemption amount on voluntary early Read More

Implied terms: nightmare on Kensington High Street

David Siesage

In Clin v Walter Lilly, the Court of Appeal held that it was necessary to imply a term into a construction contract to deal with planning permission. Mr Clin had contracted with Walter Lilly to create a single house from two adjoining properties in Kensington – a project that would involve extensive demolition, reconstruction and Read More

Keeping the (good) faith: duty of good faith implied into an oral joint venture

Sophie Nettleton

The High Court (Leggatt LJ) has implied a duty of good faith into an oral joint venture, which it has classified as a “relational contract”. Building upon his use of the term in Yam Seng, Leggatt LJ defined a “relational contract” as one where “the parties are committed to collaborating with each other… in ways Read More

When is a contract not a contract? When it’s a CVA.

Oliver Rule

A company voluntary arrangement (or CVA) – the procedure under the Insolvency Act through which companies can compromise their liabilities provided enough creditors agree – is often thought of as statutory contract. But, as Wright v Prudential Assurance shows, this does not mean that every contractual principle applies to a CVA. BHS’ stores were costing Read More

How obvious is a ‘manifest error’?

Crawford Jamieson

In Amey Birmingham Highways v Birmingham City Council, the Court of Appeal offered guidance on the meaning of the phrase ‘manifest error’. Under a PFI contract with the City Council, Amey agreed to maintain Birmingham’s road system. The roads to be maintained were defined by reference to a data set, 60% of which was based Read More

Wrongful diversion of business and the availability of springboard injunctions

Jin Ooi

In breach of express confidentiality obligations in their employment contracts, the defendants in Aquinas v Miller wrongfully diverted business from Aquinas, their former employer, to their newly set up competing business. Was Aquinas entitled to a springboard injunction? The typical purpose of springboard relief is to deprive a defendant of any head start of having, Read More

701 Aggregations. Spotting when many insurance claims are treated as a single pack

Russell Butland

In Spire v Royal & Sun Alliance the Court of Appeal held that over 700 claims of the victims of surgeon Ian Paterson should be aggregated as a single claim for the purposes of the hospital’s liability policy. Spire runs a number of private hospitals where Ian Paterson, a Consultant Breast Surgeon, operated. Over 700 Read More

Certainty prevails: cause of action accrues when work done

Megan Betts

In Ice Architects v Empowering People Inspiring Communities, the High Court held that the entitlement to payment for work by ICE arose when the work was done, not when the invoice expired. ICE provided design services to EPIC. The agreement stated that the “basis of payment” was that ICE “will invoice EPIC on a monthly basis Read More