Corporate & Commercial | 01 May 2013

Generally speaking, a two-step procedure will be adopted in determining what damages will arise from a breach of contract. First, the courts will need to consider what loss has been suffered. Secondly, they will consider whether 
any of those losses suffered are too 
remote to be recoverable. It is this second test of ‘remoteness’ that will be examined 
in this article.
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Real Estate | 01 April 2013

The conventional view in the UK has been that a sub-licensee has no greater rights than their sub-licensor and so a 
sub-licence ends when the sub-licensor’s rights terminate, in accordance with the principle of nemo dat quod non habet (no one gives what he doesn’t have).

This was questioned by the recent case of VLM Holdings Ltd v Ravensworth Digital Services Ltd [2013], when the UK court decided that a sub-licence for the use of software survived the termination of the head licence under which it had been granted. 
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Corporate and commercial | 01 March 2013

Due diligence risk allocation in share and business purchase agreements has kept the courts busy recently. The commercial approach to interpreting them adopted by the courts in 2012 will please transaction lawyers, but important questions remain unanswered.
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Corporate and commercial | 26 February 2013

As a general rule, the English courts will not enforce an illegal contract or provide for any other remedies that arise out of it. However, in determining the consequences of illegal acts carried out pursuant to a contract, the courts will distinguish between those contracts that are said to be illegal at their formation, 
and those that are illegal through performance.
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Corporate and commercial | 01 November 2012

When existing, off-the-shelf products do not meet requirements, a customer must obtain a tailor-made product or system. The Court of Appeal has recently considered the implied terms applicable to a contract to design and install a bespoke system, restricting the obligation of the contractor to a duty to take reasonable care only. Although the decision may provide some comfort to suppliers of such systems, that may prove illusory: this decision is likely to lead to tighter contractual drafting and even where this is not the case, previous case law, including a House of Lords decision, may give rise to further dispute. [Continue Reading]

Corporate and commercial | 01 October 2012

A vast number of transactions are entered into whereby a company’s standard terms will be incorporated into the terms of the agreement. This may take place regardless of whether a party is actually aware of those specific terms.

In the recent case of Allen Fabrications Ltd v ASD Ltd [2012], the High Court considered the incorporation of standard terms and conditions into a contract between two parties. In doing so, it examined the circumstances in which standard terms will form part of the agreement, particularly where they include an overly onerous term.
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Corporate and commercial | 01 September 2012

Many contract negotiations reach a crisis point at which one party requires a commitment to do something the other will not give. Endeavours covenants are frequently adopted as a compromise, being seen as representing something less than an absolute commitment but also imposing an obligation to try to achieve the stated outcome, the level of effort required depending on whether the covenant is to undertake ‘best’ or only ‘reasonable’ endeavours.

Two recent decisions will require negotiators to approach endeavours clauses with increased caution: the clause may prove useless because it is void for uncertainty; or it may unexpectedly impose what amounts to an absolute obligation, in all likelihood frustrating one of the parties and giving the other an unexpected bonus. [Continue Reading]

Corporate and commercial | 01 July 2012

Contractual parties are increasingly agreeing to commit themselves to a mutual duty of ‘good faith’, despite the apparent lack of certainty as to the meaning of such a duty. The High Court recently demonstrated the significance of such clauses and showed that a duty of good faith is a meaningful obligation with the potential for a considerably wider application than either party might have envisaged. In Compass Group and Ireland Ltd (t/a Medirest) v Mid Essex Hospital Services NHS Trust [2012], Mr Justice Cranford indicated that a duty of good faith was a material obligation, and breaching that obligation could give rise to a repudiatory breach of the contract. The effect of this decision may be to make parties think more carefully about whether they intend to owe one another a duty of good faith for the contractual term.

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Corporate and commercial | 01 June 2012

The High Court has ruled in favour of the Lonsdale group in two related summary judgment actions: Leofelis SA & anor v Lonsdale Sports Ltd & ors; and Trademark Licensing Company Ltd & anor v Leofelis SA (the Leofelis actions). The applications were in relation to claims stemming from alleged repudiatory breaches of a licence, which had been granted to Leofelis to allow it the use of Lonsdale-owned trade marks. The court decided that a breach of the licence, not known about by Leofelis at the time it had sought to terminate, could be relied upon as a defence to a claim for damages for wrongful termination, but not to found a claim for damages in respect of losses Leofelis alleged it had suffered after the date of termination.

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Human resources | 01 May 2012

For anyone who thought that the courts would be more willing to imply terms into contracts following the Privy Council’s decision in Attorney General of Belize & ors v Belize Telecom Ltd & anor [2009] and the Supreme Court’s decision in Rainy Sky SA v Kookmin Bank [2011], the judgment in Procter & Gamble Company & ors v Svenska Cellulosa Aktiebolaget SCA & anor [2012] offers a timely reminder of the courts’ innate unwillingness to interfere in parties’ freedom to contract on whatever terms they wish.

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