Contractual Advantage From Own Breach Not Allowed

Commercial Thinking

In Extra MSA Services Cobham Ltd v Accor UK Economy Hotels Ltd [2011] EWHC 775 (CL) the claimant (a developer) made an application for a declaration of the High Court that the right to terminate an agreement for lease to construct a hotel (the defendant/tenant being a hotel chain) was not conditional on the proper performance by the claimant of its obligations under the agreement.

The key provisions of the agreement were that: (i) the developer had to obtain "Requisite Consents" for the development to proceed; (ii) the developer had to use its reasonable endeavours to obtain the Requisite Consents by a specified longstop date; and (iii) a mutual right to terminate the agreement if the Requisite Consents were not obtained by the specified longstop date.