The Law Lords have just handed down judgment in the case of Chartbrook Ltd v Persimmon Homes Ltd.
Persimmon has won its appeal against a ruling that it must pay its development partner on a Wandsworth housing scheme £4.1m as an overage payment.
While there is an interesting discussion by Lord Hoffmann about how far the court can "rewrite" a contract between parties the most important part of his judgment is concerned with Persimmon's alternative argument that the Lords should take into account the pre-contractual negotiations of the parties as an aid to contractual construction, contrary to an exclusionary rule dating from the 19th Century.
The Lords rejected that submission but, as I said, their reasoning is well worth reading.
Commenting on the judgment, Roger Cohen, partner at Berwin Leighton Paisner LLP, said "The big issue is whether pre-contractual negotiations can be reviewed to interpret the contract. The Law Lords were invited to follow the Continental route and say 'Oui', but stood by the classic English 'No'."
Get the judgment here.
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hello Christian, how are you? I was just reading your aticle and couldn't help but wonder why the the House of Lords constantly seems reluctant to follow the example of continental europe. I know pre contractual negotiations is not the only issue the Lords have refused to budge on in recent years and I was wondering if you would be so kind as to email me the rest of your story.
Thanking you in adance,Dr.Luke Eastwood
Having read Lord Hoffmanns judgement I have noticed he details several reasons for not following the continental route on this issue. However I feel the concerns aired by Lord Hoffmann are general and fail to take into account contextual discrepancies.
Could you please e-mail me your story.
Much appreciated