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2015: A good year for contract law?

The direction of travel in commercial contract law has been towards freedom of contract and upholding the actual bargains reached by the parties, says Richard Hayes

22 December 2015

The Supreme Court has been active this year in relation to the law of contract,
with three key decisions on contractual construction, penalties, and implied terms.

Construction

Arnold v Britton [2015] UKSC 36 concerned service charge provisions within 99-year leases of chalets on an estate. The provisions typically required the tenant: 'To pay to the Lessor… a proportionate part of the expenses… incurred by the Lessor in the repair maintenance [etc] hereinafter set out the yearly sum of Ninety Pounds… for the first year… increasing thereafter by Ten Pounds per Hundred for every subsequent year…'

The landlord contended that the clause meant a service charge of a fixed sum of £90 was due for the first year, thereafter increasing at 10 per cent compounded annually, with the startling result that a lease granted in...

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