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Rescission of a contract

This Practice Note considers the remedy of rescission, summarising when and how a contract may be rescinded (at common law, equity and under statute) and thereby brought to an end. It includes the effect of rescission, the main grounds for rescinding a contract (misrepresentation, mistake, undue influence, duress, non-disclosure, fiduciary misdealing and bribery) and the main bars to seeking rescission as a remedy of affirmation, intervention of third party rights and impossibility of restitution.For guidance on rescission in the context of a misrepresentation, see Practice Note: Misrepresentation—rescission as a remedy.There are numerous ways in which a contract can come to an end, see: Terminating contracts—how and when a contract ends—overview for an outline, together with links to the underlying practical guidance, including Practice Note: Termination and expiry of contracts.For a summary, in tabular format, of the key and illustrative judgments handed down since 1 January 2020, considering contract law issues, see Practice Notes:•Contract disputes—key and illustrative decisions (2024–2025)•Contract disputes—key and illustrative decisions (2020–2023)What is rescission of a contract?The remedy of...

Repudiation of contract

This Practice Note concerns repudiation and sets out what a repudiatory breach of contract means. It explains how a repudiatory breach goes to the core of the contract and the options or remedies available to an innocent party as a result of the other party’s repudiation, which include either accepting the repudiatory breach and treating the contract as ended, or affirming the contract. This Practice Note explains the meaning of an anticipatory breach of contract and considers when that may also be a repudiatory breach. Termination for repudiatory breach is a common law right and a complex area of law, well documented with cases. If a party is seeking to terminate a contract for another party’s repudiatory breach the advice is to proceed with caution. It is not a risk-free strategy for termination, and each case should be evaluated on its own facts.Where a party purports to terminate a contract for the repudiatory breach of another party and the circumstances turn out not to amount to a repudiation, the act...

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Template replies to CPSE 4 (version 3.3)—Supplemental pre-contract enquiries for commercial leasehold property on the assignment of the lease

Template replies to CPSE 4 (version 3.3)—Supplemental pre-contract enquiries for commercial leasehold property on the assignment of the lease WARNING These template replies to enquiries are intended only as a framework and starting point to assist the Seller in building their bespoke replies to enquiries. They are not a recommended, comprehensive or conclusive list and should not be used without careful consideration and bespoke amendment to suit the particular transaction. Replies to enquiries form part of the contract and it is imperative that they are correctly tailored to the specific matter and do not include any false or flippant statements. They should also not contain any generic statements, such as ‘Not to the Seller’s knowledge’, unless the Seller has made an effort to discover a more comprehensive answer to the enquiry. Such a response contains within it an implication that the Seller has itself made reasonable enquiries relation to the enquiry in question. You must stress to your client the importance of reviewing the draft replies very carefully and, if...

Deed of priority: single company borrower—single senior secured lender—single junior secured lender

Deed of priority: single company borrower—single senior secured lender—single junior secured lender This Deed is made [insert day and month] 20[insert year] Parties 1 [insert name of Senior Lender] of [insert address] (the Senior Lender); 2 [insert name of Junior Lender] of [insert address] (the Junior Lender); and 3 [insert name of Borrower], a company incorporated in England and Wales with registered number [insert company number] whose registered office is at [insert address] (the Borrower). Background (A) The Senior Lender has [agreed to provide OR provided] the Borrower with a loan facility on the terms of the Senior Facility Agreement (as defined below). (B) The Junior Lender has [agreed to provide OR provided] the Borrower with a loan facility on the terms of the Junior Facility Agreement (as defined below). (C) [It is a condition precedent to the provision of [each of] the Senior Facility(as defined below) [and the Junior Facility (as defined below)] that the parties enter into this...

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In property sale contracts, is it possible to exclude liability for inadvertent misrepresentation in replies to enquires before contract?

In property sale contracts, is it possible to exclude liability for inadvertent misrepresentation in replies to enquires before contract? In commercial transactions it is frequently the case that an ‘entire agreement’ clause will be inserted into the contract with the purpose of seeking to exclude any liability in respect of matters arising outside of the terms of the contract. This will include representations that have been made with regard to the contract which are in fact inadvertent misrepresentations. An effective entire agreement clause therefore prevents the rescission of the contract or a claim for damages on the basis of a non-fraudulent misrepresentation. The standard contractual terms for commercial property sales include a clause of this type and such clauses are also standard in residential property sales. Similarly, exclusion clauses can be included, and are included as standard, in respect of liability for misrepresentation. It is essential that such clauses are carefully drafted, as a poorly drafted clause will not necessarily protect against pre-contractual representations. If this is intended,...

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The treatment of legal and equitable interests in WFOs and injunctions in other jurisdictions (Segulah Medical Acceleration AB v Tripathi)

Dispute Resolution analysis: The High Court was seized with cross-applications in the context where a worldwide freezing order (WFO) and proprietary injunctions had been granted at a without notice hearing and continued thereafter. The court considered whether to discharge a WFO and proprietary injunctions that had been obtained based on an applicant’s undertaking not to enforce in any other jurisdiction other than England and Wales. The court also had to consider whether a sole shareholder in a company who had the power to control that company, owned that company’s assets in equity, such that the company’s assets could be said to be his assets. This required a consideration of the so-called Extended Definition of assets under an (otherwise) standard form WFO and competing authorities as the correct approach. Written by Lauren Godfrey, barrister at Gatehouse Chambers.

Private Client weekly highlights—10 April 2025

This week’s edition of Private Client highlights includes: (1) HMRC publishes an updated IHT400 and new schedule IHT401a to record non long-term residence status of deceased; (2) Irwin Mitchell Trust Corporation Ltd v KS, an important decision which addresses the jurisdictional limits of the Court of Protection; (3) HMRC has confirmed that trustees must close and re-register trusts ceasing to be taxable under the Trust Registration Service; (4) HMRC publishes a new Residence and FIG Regime Manual and updates its Inheritance Tax, Trusts and Estates, and International manuals to reflect recent changes to the law on domicile; (5) HMRC publishes new directions for internationally mobile employees; and (6) 381 Southwark Park Road RTM Company Ltd v Click St Andrews Ltd, the first decision to award a building liability order under the Building Safety Act 2022 and which signals a major development in company law and the doctrine that different companies should generally be treated as different legal persons.