UK: The Contract Law Lifecycle: The Impact Of Case Law On Everything From Contract Formation To Interpretation

At our most recent ThinkHouse Foundations event, Associate, Alex Wrixon, from our Commercial Litigation team gave an update on the latest developments in contracts law, looking at how key cases have a bearing on the 'contract lifecycle'. This helpful overview touches on the hot topics of balancing 'textualism' and 'contextualism', contract variation, and the implication of terms.


Tom Cox: Hello. My name is Tom Cox. I am a Senior Associate at Gowling WLG and I co-chair ThinkHouse Foundations, a network for in-house lawyers at the start of their careers where we provide tailored training, development and resources exclusively for paralegals, trainees and lawyers of up to five years PQE. I am joined this afternoon by Alex Wrixon, an Associate in the Commercial Litigation team.  Alex has just delivered a contract law update to our audience and has now kindly agreed to sit down with me to cover some of the key points discussed. Good afternoon Alex.

Alex Wrixon: Afternoon Tom. 

Tom: So one of the key things that seemed to come out of your talk today is the approach currently been adopted by the Courts in relation to contract law. Would you care to share that with our audience?

Alex: So, when I was going through trying to organise the cases that we were going to look at, I ended up putting them into an order - rather than chronological - of looking at the life of a contract. So, from formation through to determining which terms we were interpreting. But actually, looking at the exercise in the round, there was certainly a picture [that] appeared to emerge. One of the earliest cases I was looking at was Wood and Capita, which I think people will be familiar with. This was with the Supreme Court last year, where the Supreme Court took this opportunity to essentially make its mark on... what the Supreme Court says, is there was not a dichotomy between so called textualism and contextualism, strict words on the page and the wider context. However, notwithstanding what the Supreme Court said, I think a lot of people had felt that there was divergent law and the Supreme Court, whilst on the one hand saying this is a balance and it is a process that requires both, it was the flavour of the judgment really that was a victory for so called textualism. Really looking at the words on the page and strict application of what parties had in fact contracted to. That theme actually seems to be happening across the other cases that I looked at as well.

Tom: Well indeed, and I think one of the key cases and the most recent cases which you talked about this morning was the case of Rock Advertising Limited and MWB Business Exchange Centres which relates to contract variation. What were the key messages to come out of that case?

Alex: Yes, this was a really good case, a really interesting one about the variation of a contract. The contract which was a licence for business premises... and the contract contained a clause which on its face very clearly said that this contract cannot be varied except in writing. And the previous law on that very point has been again somewhat changeable and unclear and this managed to make its way up to the Supreme Court. This was a very recent judgment in May, and the Supreme Court came out very, very much in favour that strict words on the page, in this case saying that there was no variation except in writing, should be taken as read. And so the wider implication is that the words the parties use when contracting are very important, and will be construed as they are written. More particularly, this is a real victory for so called NOMs, no oral modification clauses, which previously had been found to be essentially toothless. This is quite a big switch. They are now definitely enforceable, which throws up all sorts of implications for in-house lawyers.

Tom: So as regards those implications, what are they following the Rock case?

Alex: Well, they are twofold really. So now the judgment was great and that it went through and really emphasised the commercial reasons why people might want no oral modification clauses, which are numerous... and is really to give businesses certainty about what variations have taken place, the terms of the variations, who has carried out the variations. So I think this is great news and good news for in-house lawyers to have that additional certainty. But because NOMs are now going to be strictly construed, it is really important for people to go and check their contracts and check if they have one of these provisions because any variations are going to need to be done properly, and you are not going to be able to circumvent that clause with oral variation any more. So it's creating more work for in-house lawyers, but I think they need to be careful that there are not people on the ground still operating under the old system where they can essentially override a NOM orally because that is now bad law.

Tom: Of a piece with this you also referred to the Stevensdrake Limited case of last year which related to the implication of terms. And what is the implication for in-house lawyers on that case?

Alex: The implication for in-house lawyers is if you want a term in a contract, you had better put it in there in the first place. Again, in years gone by there have been some perhaps slackening of the previously stringent rule around implying terms into a contract. That was brought back into line perhaps by the Marks & Spencer case which reiterated the strict steps that need to be followed for a term to be implied. And the Stevensdrake case overturned the previous decision which had implied a term and said absolutely not. The contract in question, which was a CFA between a solicitor and his client, was clear on its face and therefore should be strictly construed. And the Court was not interested in implying in the term, which in fact in this instance was contrary to one of the express terms. So the bar remains very high, implied terms are going to be in the rarest situations. So if you want it in, put it in.

Tom: If you want it in, put it in. Very wise advice. The final case I would like to discuss with you today related to use of the phrase "subject to contract" when trying to form a contract.  I think the recent case of Global Asset Capital has clarified the Court's position has it not?

Alex: It has, yes. So this again causes various shudders at the thought of formation of a contract, to take everybody back to Law School, but actually for practical implications for in-house lawyers, this is good news in that the Courts have affirmed that the phrase "subject to contract" on correspondence - be it in an email subject or on this case, on top of an offer letter - will be a powerful safeguard against any inadvertent intention to create legal relations. So negotiating parties can go back and forth between themselves as part of the negotiation process without being concerned that at any moment suddenly the shutters come down when a contract has been formed. So I think on the one hand, that is great news, on the other hand you also need to be careful that when you do intend to create legal relations, you had better remove any sort of language like subject to contract or subject to anything else, in order to make absolutely clear that you are ready to contract.

Tom: So, check those email headers and make sure that if you want to say something you say it. Alex, thank you very much for your time. This was a ThinkHouse Foundations Podcast. If you are interested in ThinkHouse Foundations, please get in touch via the website or you can contact Alex at about anything raised in this podcast. 

To listen the podcast, please click here

Read the original article on

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions