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.

No general principle of interpretation for shareholders’ agreements

Kerry Chan

In Rusal v Crispian and Whiteleave, the High Court held that the principle of interpretation which applied to a private company’s articles of association – that the right to transfer shares could only be restricted by clear words – would not generally apply to shareholders’ agreements. The central issue was whether Crispian had validly commenced Read More

Oil be the judge of that: continuing misrepresentation leads to increased damages

Taly Dvorkis

In Inter Export v Lasytsya, the Court of Appeal held that the correct measure of damages for fraudulently misrepresenting the ability to pay the contract price is to put the aggrieved party in the position it would have been in had the deceit not occurred. Lasytsya was the company director of Nerida which had entered Read More

Force Majeure and Causation: iron-ing out the issues

Laurence Ridgway

In Classic Maritime v Limbungan, the High Court held that a contractual force majeure clause incorporated a “but for” test of causation. Limbungan, a charterer, contracted to provide iron ore for shipment by Classic Maritime, a ship owner. Limbungan failed to do so after a burst dam forced the mine that supplied the iron ore Read More

Crimea river: Russia and Ukraine in bond case

Jason Rix

In Ukraine v Law Debenture, the Court of Appeal refused to imply terms into a trust deed and an agency agreement that Ukraine’s obligation to repay some Eurobonds wouldn’t arise if Russia, the sole noteholder, hindered repayment. Law Debenture (at the direction of Russia) sought summary judgment against Ukraine for non-repayment of Eurobonds. Part of Ukraine’s Read More

A consideration of antique Islamic art

Victoria Williams

In Rock v MWB, the Supreme Court declined to deal with consideration. In Simantob v Shavleyan, the High Court had to grapple with it. The parties were art dealers and had settled claims relating to a dispute over the sale of antique Islamic art. Mr Shavleyan agreed to pay Mr Simantob USD 1.5m in full Read More

Strike out: court rejects implied contract claim

Elizabeth Staves

The High Court in Standish v RBS  held that an alleged overarching agreement was unnecessary and therefore could not arise by implication. There was no breach of an implied duty of good faith and the claim was struck out as it was bound to fail. Standish were shareholders in a company which suffered financial difficulties. Read More

Egg on your face: weaker test for inducement where misrepresentation fraudulent

Georgina Thomson

When NIVE sued Rembrandt for breach of its contract for the supply of egg products, Rembrandt claimed it had been induced to enter the contract by NIVE’s fraudulent misrepresentation. The court agreed that the representation had been made, but had it induced Rembrandt to enter the contract (NIVE v Rembrant)? In recent years the test Read More

The meaning of “payable”

Jason Rix

In Minera Las Bambas v Glencore, the court considered the meaning of the word “payable” in a tax indemnity. In doing so it emphasised the importance of the documentary context to interpretation and attached less weight to the factual matrix where the contract had been drafted by experienced lawyers. The parties entered into a share purchase Read More

The copyright and wrongs of tax evasion and implied contractual terms

Christopher Cobb

Addressing the copyright in computer software, the High Court saw past the tax advantageous labels applied to a contractual relationship to decide ownership by virtue of an employee/employer relationship or, alternatively, an implied assignment (Sprint Electric v Buyer’s Dream). This post focuses on the first of several contractual agreements in dispute between the parties. Sprint Read More

Redressing the balance: Banks owe no contractual duty to customers in respect of regulator-mandated review

Jon Turnbull

Back in 2012 the FSA (now FCA) launched an investigation into mis-selling of interest rate hedging products. A number of banks agreed with the FCA to conduct a pro-active redress exercise. This required the banks to review their sales to non-sophisticated customers and provide redress where appropriate. Some customers – unsatisfied with the redress on Read More