Supreme Court prefers certainty over flexibility

The English Courts have long grappled with the tension between certainty and flexibility in contract disputes. The unanimous Supreme Court judgment in MUR Shipping confirms that the courts will err on the side of certainty when enforcing commercial contracts.

The Supreme Court held that a contractual requirement to use reasonable endeavours to avoid the effect of a force majeure event did not require a party to accept non-contractual performance. In this case, that meant that a party did not have to accept payment in Euros when the contract required payment in US dollars, even though it would have suffered no financial detriment. The judgment is a warning to commercial parties. The onus is on them to ensure their contracts allocate risks and responsibilities as clearly as possible. Once agreed, the parties will be held to those terms.

Hotel owners vs. operators: rising tensions in hospitality

Increased costs and shifting travel trends mean that the outlook remains challenging for the hospitality sector.

In the hotel industry, headwinds for profitability cause tension and disputes about the terms of long-term hotel management agreements. Owners often focus on financial returns, while operators also prioritise brand image and customer experience. In the context of complex contractual arrangements that have terms measured in decades, disputes are common.

Mid-market hotels face the greatest risk, squeezed between strong luxury brands and budget chains appealing to cost-conscious travellers. We expect contract disputes to rise in 2025 as business challenges mount.