Care needed when amending definitions
ERICSSON v HUTCHISON 3G UK [2010]
Here is just a brief note on a recent case which emphasises the care required when amending definitions whilst varying a contract.
facts:
The parties changed the termination provisions of an outsourcing agreement by way of a post-signature variation, including an amendment to the definition of “Expiry Date”. This had an unanticipated knock-on effect on several other defined terms covering handover and exit provisions on termination. The parties failed to realise the possible consequences and other definitions were not varied accordingly. This led to a protracted dispute with the resultant legal costs and uncertainty that such a dispute entails.
point to note:
- You should carefully check the effect of amending one or more definitions on the entirety of the agreement (not forgetting any schedules). It is far better to spend some time up front looking at all possible resulting consequences when negotiating amendments than carelessly getting into a costly dispute about what the parties must have intended to agree about other aspects of the agreement, where the contract as originally drafted no longer makes sense following the change.