In this article, we consider Little & Anor v Olympian Homes Limited¹, a recent case which serves as a useful reminder that correspondence by email is effective to waive rights under a contract. We also set out drafting and contract administration considerations in light of the judgment in Little & Anor.
Background
By way of reminder, a contract will typically contain:
Together, these provisions mean that contractual rights (e.g. the ability to exercise a right or remedy under a contract) may be waived by email. Depending on the wording of the contract itself, a waiver may also be oral or inferred from conduct.
Case background
Little & Anor involved applications to set aside statutory demands related to a debt owed under personal guarantees to a facility agreement.
Most of the debt was for accrued interest, which the applicants (Little & Anor) claimed they did not owe due to a contractual waiver by correspondence and conduct. The key issue for the purpose of this article is whether there was an enforceable waiver of interest of the debt.
Judgment
The court determined that the contractual waiver argument failed as there was no explicit agreement to interest and the conduct of the parties did not support a valid waiver.
Interestingly, the judgment also confirmed that:
Comment
It is clear from this decision that contract drafters should consider whether something more than “in writing” is needed for a waiver/release to be effective (such as it being signed) to avoid the risk of an inadvertent release/waiver, although this will then add more process around this. Contract officers/administrators should be careful of taking any action that might inadvertently release/waive contractual obligations when this is not intended.
Contact our Corporate & Commercial team if you would like advice on the drafting of your commercial agreements.
¹ Ciaran Charles Little & James Patrick O’Shea v Olympian Homes Ltd [2024] EWHC 1766 (Ch)
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