Frustration, Illegality, Force Majeure: impact on English law contracts

Pandemics, sanctions, global economic crises… What impact do they have on contractual rights and obligations? Do they entitle parties to withdraw from their contracts? What difference does a Force Majeure or Material Adverse Change clause make? How can contracts be drafted to anticipate or address these issues and give greater protection?

We will start by reviewing the context: the distinctive features of the English legal system pertaining to contracts. Key topics will include the law-making process and the role of precedent as a source of law; ‘common law’ and ‘equity’; and the resolution of disputes through litigation in courts and international arbitration. We will look at legislation and regulations relating to sanctions, and how these are interpreted by the courts. We will review some fundamentals of English contract law, focusing on the terms of a contract (express and implied) and the principles that courts apply in interpreting contracts.

We will then look in detail at the English law doctrines relating to frustration and illegality. What happens when fulfillment of a party’s contractual obligations becomes impossible, illegal or fundamentally impracticable? We will look at how these doctrines developed historically, and at recent developments in court decisions arising from the consequences of Brexit, Covid-19 public health measures and economic sanctions relating to the Ukrainian crisis.

We will analyse standard contractual clauses relating to Force Majeure and Material Adverse Change, and see how these are used in M&A transactions and financings. How can these be drafted and negotiated to favour one party or the other (purchaser/seller, lender/borrower)?

We will try to bring in guest speakers to discuss other relevant jurisdictions, in particular Delaware (U.S.) and civil law jurisdictions in Western Europe.

All students admitted to the Pericles LL.M. program are automatically eligible for the course. Other students may be admitted at the discretion of the Dean, Admissions Tutor or professor. All potential students are expected to have an advanced knowledge of spoken and written English.

Marc Polonsky is a retired partner of the international law firm White & Case. His practice focused on investment in the former Soviet Union, particularly in the natural resources and infrastructure sectors. Based principally in London, he also spent eleven years (1998 to 2008; 2017 to 2018) living and working in Moscow. In addition to teaching English law and legal professional ethics, he manages a philanthropic foundation that supports cultural heritage and humanities education and research and is a non-executive director of a UK-listed financial services company. He has a B.A. in Modern Languages (Russian and French) from the University of Oxford and is a solicitor qualified in England and Wales.