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Over the last five years a sequence of decisions of the High Court and Court of Appeal have embraced a philosophy of documentary fundamentalism: it is always possible to agree the basis of a transaction, even where the parties know that this flies in the face of the facts. Accordingly, claims that a contract was procured by false statements during the negotiation process are now routinely rejected on the ground that entire agreement, non-reliance, no representation and exemption clauses preclude any actionable misrepresentation arising in the first place. A hitherto obscure doctrine of contractual estoppel has been decisively established by the Court of Appeal in Peekay Intermark v. Australia & New Zealand Banking Group in 2006 and by Springwell Navigation v. JP Morgan Chase Bank in 2010. Both featured sophisticated, commercial investors whose fingers were burnt in the emerging market debt crisis of the late 1990s. Both claimants failed to establish actionable misrepresentations on the facts, but the courts felt it necessary to reinforce these conclusions by reference to the new device of contractual estoppel, which will have implications far beyond the world of sophisticated investors’ claims. This approach will intrude into nearly all commercial and financial transactions, whatever the size or (lack of) sophistication of the counterparty. It will be suggested that these developments are unsound. The impact of statutory controls has also provoked debate, and will be addressed.
One of the undoubted strengths of English law is the commitment of the judiciary to taking seriously the contractual documents which record commercial and financial transactions, and their concern with the actual words the parties have chosen. So, in construing commercial contracts, the document is the point of departure, and often the ultimate source of the solution: “Loyalty to the text of a commercial contract, instrument or document read in its contextual setting is the paramount principle of interpretation”.1 Reinforcing that, there is no danger of the courts’ having recourse to a general doctrine of good faith to override the documentary bargain. Some have celebrated the absence of any