19 March 2020

The Full English: Looking back at our top eight cases of 2019 in the UK

This article was written by Jenny Willcock (Senior Associate), Cassandra Ditzel (Associate) and Daniel Jones (Paralegal) in the KWM London office

Last year was an interesting year in the UK Courts for businesses and corporate/commercial lawyers alike. Whilst we do not intend to provide you with an exhaustive list of all UK Court decisions, we have selected 8 key cases heard which are both thought-provoking and relevant to those who are not as close to the UK legal system and which could potentially affect you or your clients’ business. Please click on the titles below in order to see more information on some of the key findings and if you wish to discuss any issues raised with our team, please contact us: 

  1. Choose your words wisely when you have an Automatic Email Signature….. The UK Courts held that e-signatures can satisfy the formalities set out under section 2 of the Law of Property (Miscellaneous Provisions) Act 1989 and constitute a legally binding agreement between parties.

  2. Which came first, the binding contract or the implied term?….. The best starting point for determining the parameters of a contract will often be the standard test of contractual interpretation, instead of the high bar set when trying to persuade the Court to imply any terms into an agreement. 

  3. Don’t forget about the trustee body if seeking to rely on informal shareholders approvals…. The Duomatic principle is not without its limitations and it is not wise to invoke it in order to authorise transactions up front when dealing with trusts and pension schemes.

  4. Share purchase agreements: Lessons for Sellers… Sellers need to take care when disclosing material to buyers and should ensure that in order to meet the standard test of “fair” disclosure, the data room index is always appended to the disclosure letter. Sellers should ensure that forward-looking warranties do not relate to factual accuracy of the statements and are qualified by specific accounting standards and/or careful enquiry with management.

  5. Buyers read the fine print when serving notices … The purpose of notice clauses in agreements is to provide certainty to the party being notified and a failure to adhere to these provisions can have fatal consequences. 

  6. Shareholders and directors: where basic procedures can trip you up …Despite its usefulness in fostering business efficient and expediency, failure to adhere to basic statutory requirements set out under the Companies Act can render shareholder decisions passed by way of written resolution invalid. 

  7. You may have Third Party Rights even if you don’t know a contract exists: Care must be taken when drafting contracts to ensure that the operation of the Contracts (The Rights of Third Parties) Act 1999 is specifically excluded where there are no parties needing to benefit from it. 

  8. The Supreme court sharpens the “Blue Pencil Test” for restrictive covenants: …Restrictive covenants need to be clearly drafted so as to avoid any ambiguity if the wording is disputed and the provisions, can still remain enforceable if the disputed wording is carved or struck out. 

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