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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.
26 July 2017 Jason Rix
During a conversation, in the Horse and Groom, Mr Ashley said he’d pay Mr Blue £15 million if Mr Blue could get the price of Sports Direct shares to £8. Mr Blue agreed and those present laughed. Thirteen months later the Sports Direct share price had risen from £4 to £8. In Blue v Ashley › Read More
06 July 2017 Daniel Grimwood
In Minerva v Greenland, the court provides some useful pointers as to when a party has met an obligation to use reasonable endeavours to secure a particular outcome. Minerva sold a development site to Greenland. The sale agreement provided that if Minerva was successful in obtaining enhanced planning permission within a certain time, Greenland would pay › Read More
05 July 2017 Alexandra Pedder
In Russell v Stone the court considered the interpretation of standstill agreements and found that they operated to suspend, rather than extend, time for the purposes of limitation. The Russells engaged Stone to manage a construction project. The project was beset by difficulties, for which the Russells blamed Stone. The parties entered into three standstill › Read More
04 July 2017 Robyn Trigg
In Astex Therapeutics v AstraZeneca, AstraZeneca were able to recover $2 million by way of restitution of enrichment for two milestone payments made to Astex by mistake under a collaboration agreement. Astex and AstraZeneca entered into an agreement to develop a BACE inhibitor for treatment of Alzheimer’s disease. After expiry of the collaboration term, the › Read More
30 June 2017 Richard Farnhill
If a breach of contract allows the non-breaching party to save money or avoid a loss, must it give credit for that saving to the contract breaker? That was the issue considered by the Supreme Court in Globalia v Fulton Shipping. The facts were straightforward enough, although as we shall see they split judicial opinion › Read More
30 June 2017 Po-Siann Goh
In African Export-Import Bank v Shebah Exploration & Production Company, the Court of Appeal confirmed the test for when negotiation and amendment of “written standard terms of business” will preclude application of the reasonableness requirement in section 3 of the Unfair Contract Terms Act 1977 (UCTA). Section 3 of UCTA subjects certain exclusion clauses to › Read More
21 June 2017 Jason Rix
In Watson v Watchfinder.co.uk, a refusal to consent to a share option entailed an improper exercise of a contractual discretion. Watchfinder buys and sells luxury pre-owned watches. It granted an option in its shares to Watson and others who were directors of a company that was providing services to Watchfinder. The relevant provision stated “The › Read More
08 June 2017 Jason Rix
There was an implied duty in a lease that the lessor would not prevent a management company from performing its obligations, but not one that it had to positively cooperate with the company (Wild Duck v Smith  EWHC 1252 (Ch)). The dispute related to the development of holiday homes in the Cotswolds by the › Read More
05 June 2017 Alex Hiendl
In Associated British Ports v Tata Steel, the court upheld a provision in a 25-year licence which referred a failure to renegotiate terms in certain circumstances to arbitration. The clause in question, provided that either party could serve notice on the other to renegotiate the agreed terms “in the event of any major physical or › Read More
26 May 2017 Po-Siann Goh
In Persimmon Homes v Ove Arup, the Court of Appeal declined to apply the contra proferentem rule to an exemption clause in a major construction contract. The contra proferentem rule, set out by the Privy Council in Canada Steamship in the context of excluding liability for negligence, requires any ambiguity to be resolved against the › Read More