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Tuesday 4 April 2017

MH Corporate

Consequential Loss Re-examined

The traditional meaning of damages for consequential loss was established by Hadley v Baxendale (1854)  9 Exch 341, but has recently been re-examined by the High Court in Star Polaris LLC V HHIC-PHIL Inc [2016] EWHC 2941.

Facts

Star Polaris LLC (the Buyer) entered into a contract with HHIC-PHIL Inc (the Seller) to build a ship, the Star Polaris. About eight months after its delivery, the ship suffered serious engine failure and had to be towed to a port for repairs. The Buyer commenced arbitration proceedings against the Seller for breach of contract, seeking compensation for: (i) the cost of repairs to the ship, (ii) various costs arising from the engine failure (namely: towage fees, agency fees, survey fees, off-hire and off-hire bunkers); and (iii) the diminution in value of the ship.

Tuesday 4 April 2017

MH Corporate Update

To vary or not to vary

The general principle of contract variation is that parties to a contract may vary its terms by mutual agreement, provided that consideration is given and any necessary formalities are followed.

On this basis, it would not be unreasonable to expect that if a variation clause in an agreement states that the agreement can only be varied by written agreement signed by both parties, any attempted oral variation would fall short of such a test. Such clauses are commonly referred to as “anti-oral variation clauses”, the intention of which is to ensure that verbal communications cannot be treated as variations to the contract…or so the parties may have thought.

Friday 17 March 2017

MH Corporate

Head of Equity Capital Markets Simon Charles describes the Takeover Panel’s imposition of its most draconian sanction against two individuals – cold shouldering – which is akin to a corporate finance ASBO.

Morton cold shouldered by Take over panel

Friday 9 December 2016

MH Corporate

E-signatures in Commercial Contracts

Introduction

The days when parties to a transaction would have to be physically at the same meeting to sign transaction documents are diminishing. It is now common practice for the lawyers involved to arrange a signing via email. Transactions typically see signatories signing a hard copy document in wet ink, and they then scan and send the document by email. However, as technology evolves, the use of e-signatures has become increasingly common. This article sets out the present position on the scope for use and acceptance of electronic signatures in commercial transactions in the UK.

Restrictive Covenants – will they make the cut?

In the recent case of Rush Hair Ltd v Gibson-Forbes & Anor [2016] EWHC 2589 (QB), the High Court considered the enforceability of two restrictive covenants contained within a share purchase agreement (SPA).

The Facts

In March 2015, the claimant, a hairdressing company called Rush Hair Limited (Rush), entered into a share purchase agreement (SPA) with the first defendant Hayley Gibson-Forbes (H), to purchase the share capital of two companies owned by H: Hair (Windsor) Limited and Hair (Maidenhead) Limited (Companies). Rush agreed to pay £25,000 on completion of the SPA, and a further £15,000 (Deferred Consideration) six months after completion provided that H did not breach any of the provisions of the agreement.

 

Friday 20 November 2015

MH Corporate

Indemnities and interpretation: a case of cats and dogs

The recent Court of Appeal decision Wood v Sureterm Direct Ltd & Capita Insurance Services Ltd [2015] EWCA Civ 839 considered how to interpret an indemnity clause in a sale and purchase agreement, overturning the High Court decision. The Court examined its role in interpreting a contract between parties where the language was capable of having more than one meaning, finding that it is not for the courts to improve a party’s bad bargain where it would undermine the importance of the natural language used.

The Good, the Bad and the Faithful

The case of Portsmouth City Council v Ensign Highways Ltd [2015] EWHC 1969 (TCC) considered whether a duty to act in good faith could be implied into the Council’s dealings with its service provider (Ensign).

Illegality considered – the case of Jetivia SA and another v Bilta (UK) Ltd

In the recent case Jetivia SA and another v Bilta (UK) Ltd [2015] UKSC 23 (“Jetivia v Bilta”) the Supreme Court considered the application of the illegality defence.

Through its liquidators, an insolvent English company, Bilta (UK) Limited (“Bilta”), brought claims against its directors for unlawful means conspiracy involving them breaching their fiduciary duties and against a Swiss company, Jetivia SA (“Jetivia”) and its sole French director for dishonestly assisting them. Jetivia and its directors applied to strike out Bilta’s claim on the basis of the “illegality defence”, the principle that the courts will not assist a claimant whose claim is only possible due to the claimant’s own illegal action.

Corporate Update: Recovery of avoided loss and collateral benefits

The case of Swynson Limited v Lowick Rose LLP [2015] EWCA Civ 629 on appeal to the Court of Appeal concerned an amount of damages recoverable by a lender from a negligent firm of accountants which failed to perform a proper exercise of due diligence on the borrower to whom monies were lent on reliance on that negligent advice. The loan was repaid by using money lent to the borrower by the owner of the lending company. At first instance the High Court held that repayment was a collateral matter which did not go to reduce the damages recoverable by the lender from the negligent accountants. The appeal concerned, amongst other matters, whether damages due for that negligence could be reduced by “avoided loss”. The avoided loss came about through the repayment to the borrower of the two initial loans through the issue of a third refinancing loan from the borrower’s owner undertaken principally for tax reasons.

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