Jurisdiction(s):
United Kingdom

Implied novation despite NOM and termination clauses; estoppel and unreasonable refusal of consent to assignment: Gama Aviation (UK) Ltd v MWWMMWM Ltd [2022] EWHC 1191 (Comm) (England and Wales)

Published on: 24 June 2022

Published by a LexisNexis Commercial expert

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Article summary

Gama Aviation (UK) Ltd and Another v MWWMMWM Ltd [2022] EWHC 1191 (Comm) What are the practical implications of this case? Key takeaways for practitioners include:

NOM clauses: A party’s contractual rights and duties can be altered not only by variation but also by novation or termination. Anyone aiming to prevent such informal changes should adopt wording that makes this intention explicitly clear.
contractual rights to terminate: Even where a clause grants a unilateral right to terminate by written notice, this may not stop the contract being discharged by an informal novation; whether it does will turn on the clause’s wording and the surrounding context.
on covenants: As only reasons that genuinely influenced a party’s mind can justify the reasonableness of a refusal of consent, a party withholding consent should record its reasons at the time. The decision also supports interpreting such qualifications as rendering the covenants conditional on the covenantee acting reasonably, with the effect that the covenantor will be entitled validly to carry out the

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