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United Kingdom
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Contra meaning

What does Contra mean?
Contra describes, in receivables and commercial practice, a sum owed by the seller (the client) to its customer (the debtor) which the debtor may set off against the price it owes on the client’s invoice. It commonly arises where the debtor also supplies the client, or where credit notes, rebates, returns, damages or “contra charges” are claimed. The effect is to reduce or extinguish the receivable. Contra is not a statutory term; it is industry shorthand for set-off (called compensation in Scots law). The underlying rights are governed by contract and the general law of set-off/compensation in England & Wales, Scotland, Northern Ireland and Ireland, which are broadly consistent, subject to jurisdictional terminology and procedural differences. Contra is material in assignment of receivables, factoring and invoice discounting: an assignee takes subject to any defence or set-off available to the debtor at the time of notice (unless an effective no set-off clause or waiver applies). In insolvency, only mutual debts qualify for statutory set-off; “contra” is not a separate regime. Also referred to as contra account, contra trading or contra set-off in trade documentation.
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NEWS
Civil dispute resolution weekly update: CPR/PD online pilot changes, OPRC programme, MoJ fee rises, and key rulings on sham litigation, contra mundum injunctions and CPR 71—27 February 2025

In this issue: Key DR developments Claims and remedies Injunctions Enforcement New content Dates for your diary Useful information Key DR developments CPR update The 181st PD update: The 181st Practice Direction (PD) update took effect on 27 February 2025. It brings amendments to the Online Civil Money Claims (OCMC) pilot under CPR PD 51R, the Damages Claims pilot (DCP) under CPR PD 51ZB, and the Small Claims Track Automatic Referral to Mediation Pilot Scheme under CPR PD 51ZE. The key revisions to CPR PD 51R and CPR PD 51ZB concern how claims progress within the intermediate track and multi-track in the OCMC and DCP respectively. Adjustments to CPR PD 51ZE are intended to enhance clarity and efficiency without changing the substantive operation of the OCMC mediation scheme. For further detail, see: LNB News 25/02/2025 33—181st Practice Direction update—in force 27 February 2025. Online Procedure Rules Committee minutes The Online Procedure Rules Committee...

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NEWS
UK Public Law update: Brexit energy and fisheries decisions, Procurement Act guidance and Grenfell debarment pause, PAC on private finance, ECHR NAP3 challenge, JR rulings, information rights tribunal rulings

Brexit highlights Brexit SIs Post-Brexit guidance Constitutional and administrative law Public procurement Projects and infrastructure Equality and human rights Judicial review Subsidy control and state aid Information law Central government pensions Other Public Law news Daily and weekly news alerts New and updated content Dates for your diary Trackers Useful information UK-EU Common Understanding—what is on the horizon for the energy sector? At the UK–EU summit on 19 May 2025, the UK government agreed the UK–EU Common Understanding, with specific focus on energy. Part 4, titled ‘strengthening our economies while protecting our planet and its resources’, addresses three energy themes: (1) energy co-operation, notably possible participation in the EU internal electricity market; (2) technical and regulatory engagement on emerging technologies; and (3) linking the UK and EU emissions trading schemes (ETS). Although it does not determine the ultimate legislative or regulatory settlement, the Common Understanding captures the outcomes...

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NEWS
UK banking and finance weekly: case law on on-demand lending and bonds; aviation novation rectification; sustainable finance; ICMA; BoE SVB transfer; FCA transparency; AI in markets; OFSI sanctions FAQs

In this issue: Sustainable finance and ESG weekly round-up Lending On-demand bonds Aviation finance Sustainable finance Debt capital markets Regulation for banking lawyers Technology in banking and finance transactions Sanctions Daily and weekly news alerts New and updated content Useful information Sustainable finance and ESG weekly round-up For this week’s highlights on Sustainable finance and ESG, consult Sustainable finance and ESG weekly round-up—7 November 2024. Lending Murfet and another v Property Lending LLP and another company [2024] EWHC 2787 (Ch) Clause 7.2 of the Facility Letter provided that sums advanced were “repayable on demand”, empowering the lenders to require repayment of the entire borrowing at any moment without having to justify the demand. The contra proferentem rule was irrelevant because there was no uncertainty in Clause 7.2 warranting construction against the lenders as the drafting party. The Unfair Contract Terms Act 1977 did not bite, since Clause 7.2 formed...

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View the related Practice Notes about Contra

PRACTICE NOTES
Exemption Clauses in UK B2B Contracts: Incorporation, Construction and Statutory Controls under UCTA 1977 and the Misrepresentation Act 1967

This Practice Note considers exclusion and limitation of liability in business-to-business (B2B) contracts. This Practice Note offers guidance on the common law and statutory controls that govern exclusion and limitation of liability clauses (also described as limitation of liability clauses, limitation clauses, exclusion of liability clauses, exclusion clauses and exemption clauses), including the Unfair Contract Terms Act 1977 (UCTA 1977) and the Misrepresentation Act 1967 (MA 1967). It identifies which provisions amount to exemption clauses and sets out three central matters to address when drafting them or assessing them in a dispute: incorporation construction statutory controls It also outlines the courts’ treatment of attempts to exclude or restrict liability for certain breaches (eg fundamental breach) and for different heads of loss (eg direct loss, indirect and consequential loss, loss of profits, loss of use and loss of data). It notes common techniques parties use to allocate or restrict risk (eg financial caps, time bars, excluding rights of set-off) and addresses...

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PRACTICE NOTES
Contract construction: key canons and authorities (Rainy Sky, Arnold, Wood)—commercial sense, whole-document reading, inconsistencies, mistakes, rights limitations, contra proferentem, ejusdem generis, NOM clauses, redactions and surplusage

rules on interpreting contracts (agreements) This Practice Note outlines the rules for construing contracts and their terms, reviewing leading cases—Rainy Sky v Kookmin, Arnold v Britton, and Wood v Capita—together with the principal canons of construction. It should be read alongside the Practice Notes: Contract interpretation—the guiding principles; and How to approach a contractual interpretation dispute—a practical guide. Lord Hoffmann’s five principles in ICS v West Bromwich Building Society (see Practice Note: Contract interpretation—the guiding principles) provide the central approach to interpretation, which is then supported by general rules or guidelines (often called canons of construction) used to help determine the meaning of a written agreement. This Practice Note examines the most significant of these, namely: the whole document is relevant commercial sense (business common sense) and avoiding an unreasonable outcome cutting down rights and remedies saving the document consistency of terms mistakes in the contract the contra proferentem principle the ejusdem generis principle adjectives and determinators...

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PRACTICE NOTES
Construction of post-termination restrictive covenants: timing, clarity, ordinary meaning, purposive interpretation, contra proferentem, corporate veil and severance

This Practice Note This Practice Note sets out how post-termination restrictions (restrictive covenants) should be construed. It addresses timing, the need for exactness and clarity, giving words their ordinary, natural sense, the weight of context and the parties’ intentions (a purposive reading), and the contra proferentem principle. It also considers when the corporate veil might be lifted, whether a clause will be re-written, and severance. The construction of post-termination restrictions follows the general rules used for any contractual term. The baseline is that a restraint of trade is usually unlawful, and such a restriction will only be reasonable, and lawful, if it goes no further than is strictly required to protect an employer’s legitimate business interests (see Practice Notes: Restraint of trade in employment and Legitimate business interest). Accordingly, restrictions should be tailored to the employer’s particular business and the employee’s duties, and expressed in the clearest terms. Two further general observations apply: so far as possible, a common-sense approach should be...

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