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A stitch in time …

18 October 2011

Last week we looked at the legal principle that a party cannot benefit from its own breach.

It’s worth remembering that you can exclude or modify this principle in your contract. The extent to which it is excluded or modified just depends on the form of words you choose – as a recent case shows.

As ever, you need to be careful with your drafting. In particular, if you list the circumstances when a party’s breaches of contract will prevent it from taking an action (in this case, serving a notice of rescission), this may have the effect of meaning other breaches of the contract will not prevent it from taking that step.

One further point – the clause in question was a late handwritten amendment and the judge commented that he didn’t think the parties had thought through its effect. In other words, it really is worth spending that little bit of extra time considering the implications of last minute changes to a contract …

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