Insights for In-house Counsel Spring 2025 - Commercial contracts

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Late payment in the UK: what's changed and why should you care?

In late 2024, the UK Government announced its intention to "crack down on late payments" and outlined several measures intended to support this. It proposes to step up enforcement of the late payment disclosure regime for larger businesses and to consult on further changes designed to promote additional transparency and scrutiny. Alongside this, a revised voluntary code has been published together with a more demanding prompt payment standard for many suppliers to the public sector. One key takeaway is that late payment is increasingly being seen as an ESG issue – and businesses that fail to take it seriously face an increasing risk of significant reputational damage. See our briefing for more detail.

Beware mutual exclusions of loss of profits

In February 2025, the Court of Appeal ruled that the High Court was correct to find that mobile provider EE was not entitled to claim damages for loss of anticipated profits arising from alleged breach of exclusivity in relation to its supply agreement with Virgin Mobile.

Key lessons

Don't treat blanket exclusions of lost profits as if they are "mere boilerplate" – always consider the impact on the specific deal you are negotiating; and
Beware reciprocal/mutual provisions – whilst they can often appear to be a "fair outcome" in negotiations, they can also deprive one party of remedies for breaches of certain key obligations (as in this case, where EE was left unable to claim damages for an alleged breach of exclusivity by Virgin).

For more detail, see our coverage of the first instance ruling.

Pricing issues in commercial contracts: a 5-minute primer

Our 5 -minute video primer on key pricing issues in commercial contracts covers:

whether suppliers can raise prices unilaterally;
how to deal with inflation;
cost plus and open book pricing;
audit clauses;
"best price" or MFN obligations;
price-matching clauses; and
benchmarking.

Do franchisors need to act in good faith?

A claim against a UK mobile telecoms provider by its current and former franchisees alleges that the franchisor acted in bad faith. Our briefing looks at:

previous franchise cases involving good faith;
the role of good faith in cases involving exercise of a contractual discretion by one of the parties (usually the franchisor); and
whether franchise agreements contain a general obligation of good faith.

Government confirms no change to EU-derived rights for sales agents in the UK

As part of its attempt to reduce the amount of EU-derived law in the UK, the previous Government launched a consultation on whether to repeal the Commercial Agents Regulations. Among other things, these Regulations enable certain sales agents to claim substantial sums from the business that they act for when the agency ends (in recognition of the goodwill they have built up on behalf of those businesses). The current Government has now confirmed that these Regulations will be retained. This removes the uncertainty created by the consultation – which may have prompted some businesses to postpone decisions to appoint new agents, pending the Government's response. More generally, this is a further example of how – despite the UK having the freedom to diverge from EU law following Brexit – it often ended up choosing not to do so.

The Regulations only apply to sales agents for goods, not services – although this CJEU case from 2021 confirms that software supplied on a perpetual licence basis is also covered by the Regulations. However, in a more recent case, the English High Court concluded that software as a service (SaaS) did not amount to goods for the purposes of the Regulations.