Some welcome commercial certainty
Parties who agree the basis on which they contract are bound by
their agreement, the Court of Appeal has found. Put so simply, it
hardly sounds like a surprising decision. Contracts are meant to be
legally binding after all. However, until the judgment on 1
November 2010 in Springwell Navigation Corporation v. JP Morgan
Chase Bank and others1 the ability of parties to
agree whether they had given or received advice, and whether they
had made or relied on a representation before they made their
contract, was in doubt.
Conflicting cases resolved
Springwell resolves a clash between competing Court of
Appeal authorities. Lowe v. Lombank2 suggested
that an agreement about the basis of the contract that both sides
knew was untrue was not a contractual promise at all. In contrast,
the more recent case of Peekay Intermark Ltd v. Australia and
New Zealand Banking Group Ltd3 held that, where
parties had agreed to contract on a particular
