The negotiation of a substantial contract is often fast, intense and convoluted, with many telephone conversations back and forth with the counterparties. Failing to record in writing any substantive amendments to a clause(s) in a contract can be dangerous and ultimately very costly for the party adversely affected by the clause(s). The parties' lawyers cannot simply rely on their client's final review and approval of the contract.
In Wellesley Partners LLP v Withers  EWHC 556 (Ch) Mr Justice Nugee found the defendant solicitors to be liable for damages in excess of £1.6m arising out of the unauthorised amendment of one very brief clause in an LLP agreement. In 2008 Withers acted for the claimant in connection with the admission of new partners to an LLP, including a bank, Addax, who agreed to make a contribution of about £2.5m. The terms agreed between the claimant and Addax allowed the latter the opportunity to exit the partnership and be repaid 50 per cent of its contribution after 3.5 years. That unwinding provision was recorded in the first of numerous drafts of the agreement. However, the version finally executed by the parties contained a very different unwinding provision which enabled Addax to exit at any time within 3.5 years.