Anonymised and Structured Summary of the Opinion

Factual and Procedural Background

This is an anonymised summary based only on the provided opinion. Company A (a start-up energy supplier purchased by an individual who acted for Company A) developed a long-term supply model to supply electricity and install energy infrastructure for Company B. Negotiations for a long-term contract followed a tender process; because Company A required financing, the parties entered a four-year short-term supply contract effective 1 October 2017 while they continued negotiating the intended 25-year contract.

The short-term contract contained a term (clause 10.2) giving Company A a right to terminate the contract on specified events, including (in clause 10.2(d)) where Company B passed a resolution for amalgamation or similar corporate reorganisations, except in certain solvent reorganisations approved in advance. Clause 10.5 provided for a termination payment equal to 50% of the "remaining value of this Contract to the Supplier" in respect of terminated supply premises, as determined reasonably by the supplier. Clause 13.1 stated that delay or omission in exercising a right would not be treated as waiver.

Company B merged with Company C and the amalgamation resulted in Company D (the merged entity). Company A became aware of the impending amalgamation by a notice and later by the completed registration, but the person acting for Company A did not understand that the express contractual clause gave Company A a right to terminate on a solvent amalgamation until a conversation with its solicitors on 5 November 2018. After a period of deteriorating relations and disputes about payment terms and access for meter installation, Company A gave notice purporting to terminate for breach on 31 October 2018, revoked that notice on 2 November 2018 and then, after being told by its solicitor that lack of prior approval for the amalgamation gave a termination right under clause 10.2(d), served a solicitor's termination letter dated 7 November 2018 terminating with effect 14 November 2018 and claiming a termination payment.

Company D treated the solicitor's notice as a wrongful repudiatory termination, accepted that repudiation on 14 November 2018 and purported to terminate the contract itself. Company A's business subsequently failed and its licence was revoked; its only significant asset became the claim for the termination payment. Company A commenced proceedings claiming payment under clause 10.5 and common-law damages; summary judgment on the amalgamation-based termination issue had earlier been refused at first instance on the basis that the election issue required trial.

The trial judge found (inter alia) as a matter of fact that the person acting for Company A did not know that clause 10.2(d) gave a right to terminate for a solvent amalgamation until 5 November 2018 and that Company A had not given approval in advance; the judge held that Company A had validly terminated on 14 November 2018 and awarded the termination payment. Company D appealed only on limited grounds (but was not permitted to challenge the trial findings of fact concerning knowledge).

Legal Issues Presented

1. Whether the principle in Peyman v Lanjani (that a party entitled to rescind or avoid a contract will not be held to have elected to affirm it unless it knows it has such a right) applies where the right to terminate is an express contractual term (i.e. whether a contracting party is as a matter of law deemed to know express contractual termination rights for the purpose of waiver by election).
2. Whether Company A's continuing performance after the amalgamation amounted to an election to affirm the contract (by conduct or lapse of time) so as to waive its contractual termination right.
3. Whether clause 10.5 should be interpreted as awarding 50% of projected future turnover (income) or 50% of projected profit as the termination payment.

Arguments of the Parties

Appellant's (Company D) Arguments

• Company D argued that a party must be deemed to know the express terms of the contract it has signed; therefore Company A should be taken to have known the termination right in clause 10.2(d) and cannot rely on ignorance to avoid an election to affirm. The Appellant relied on principles of commercial certainty and authority such as L'Estrange v Graucob and later Supreme Court dicta concerning certainty in commercial law.
• The Appellant argued that Company A's conduct after the amalgamation (continuing to supply, invoicing the merged entity, pursuing the meter-rollout and negotiating long-term terms) constituted positive conduct amounting to an election to affirm rather than a mere lapse of time.
• The Appellant contended that the judge should have found that knowledge of the contractual right was "obviously available" to Company A (by reading the contract or obtaining legal advice) and that this sufficed for an election.
• On quantum, the Appellant argued that clause 10.5 should be read as referring to the supplier's profit (income less costs) rather than gross income, to avoid a windfall.

Respondent's (Company A) Arguments

• Company A argued that Peyman v Lanjani requires actual knowledge of the right to elect and that the trial judge found (and Company D may not now challenge) that Company A's decision-maker did not know clause 10.2(d) gave a right to terminate for a solvent amalgamation until 5 November 2018. That factual finding was fatal to Company D's election defence.
• Company A also relied on the legal distinction between election and estoppel: election requires knowledge of the right whereas estoppel depends on representation and detrimental reliance. The trial judge's finding that there was no detrimental reliance by Company D defeated any estoppel defence.
• On quantum, Company A argued that the natural meaning of "remaining value of this Contract to the Supplier" is the anticipated income the supplier would receive for the relevant supply premises and that clause 10.5 was a negotiated compromise to provide a prompt, easily calculated measure of compensation.
• Company A resisted the contention that a new legal point (deemed knowledge of contract terms as a matter of law) should be allowed on appeal, or argued that if it were allowed, it should not succeed here given the factual findings and the rebuttal of the presumption that legal advice implies awareness.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court in this Opinion
Peyman v Lanjani [1985] Ch 457	Held that election to affirm requires knowledge not only of the facts giving rise to the right but also of the legal right itself.	Viewed as binding on this court; the court applied Peyman to hold that there was no election because Company A's decision-maker did not know of the contractual termination right until 5 Nov 2018.
The Kanchenjunga [1990] 1 Lloyd's Rep 391	Summarises principles of election and waiver by election (knowledge of facts and of the choice; conduct must be unequivocal; time may lead to deemed election).	Used by the court to state the general principles of election; the court relied on it together with Peyman in assessing the doctrine.
Moore Large & Co Ltd v Hermes Credit & Guarantee Plc [2003] EWHC 26 (Comm), [2003] Lloyd's Rep IR 315	Presumption that a party who has legal advice will be aware of its rights (rebuttable if privilege waived).	Cited to explain that the presumption exists but was rebutted on the facts because Company A waived privilege and showed the adviser had not given the relevant advice; the court accepted the presumption is rebuttable.
L'Estrange v F. Graucob Ltd [1934] 2 KB 394	Principle that a party is bound by a contract it has signed regardless of whether it has read it.	Quoted by the Appellant; the court rejected the submission that L'Estrange supports a rule of deemed knowledge of contractual termination rights for election purposes, distinguishing the issues.
MUR Shipping BV v RTI Ltd [2024] UKSC 18, [2025] AC 675 (and related Supreme Court dicta)	Affirmation of the importance of certainty and predictability in commercial law.	Referenced by the Appellant in support of certainty; court noted the policy interest but held it did not displace Peyman.
JTI Polska sp z oo v Jakubowski [2023] UKSC 19, [2023] 3 WLR 50	Observations about certainty and predictability in commercial law.	Cited as part of authorities emphasising commercial certainty; used in argument but not to displace Peyman.
The Golden Victory [2007] 2 AC 353	Discusses certainty in commercial law (Lord Bingham's dissent cited).	Quoted in submissions about commercial predictability; the court referred to the policy point but declined to overturn Peyman.
Delta Petroleum (Caribbean) Ltd v British Virgin Islands Electricity Corpn [2020] UKPC 23, [2021] 1 WLR 5741	Recent summary of leading authorities on election (Lord Leggatt).	Used to summarise modern exposition of election; court referenced it for the doctrinal framework while noting Peyman remains binding here.
Kammins Ballrooms Co Ltd v Zenith Investments (Torquay) Ltd [1971] AC 850	Early authority on waiver by election where a person has to choose between inconsistent rights.	Quoted as part of the doctrinal backdrop for election; applied in framing the issues.
Kosmar Villa Holidays Plc v Trustees of Syndicate 1243 [2008] EWCA Civ 147	Reference to knowledge being "obviously available" and discussion of when knowledge is to be treated as available.	Cited in submissions for the Appellant; the court interpreted "obviously available" narrowly and did not treat it as dispensing with knowledge of the right.
Prudential Assurance Co Ltd v Revenue and Customs Commissioners [2016] EWCA Civ 376	Guidance on when new points of law may be raised on appeal.	Cited in the procedural discussion concerning whether the Appellant could raise the "deemed knowledge" point on appeal; the court permitted the point as a pure point of law subject to discretion.
Singh v Dass [2019] EWCA Civ 360	Guidance on allowing new points on appeal and related principles.	Used with other authorities to assess whether the Appellant could raise a new legal argument on appeal; court allowed the point to be run.
Notting Hill Finance Ltd v Sheikh [2019] EWCA Civ 1337	Guidance on new points on appeal.	Referred to in determining appellate discretion to allow the new argument; cited as supportive authority.
Mullarkey v Broad [2009] EWCA Civ 2	Discusses when a new point would have required different evidence at trial.	Quoted in assessing whether the Appellant's new point would have required fresh factual inquiry; court concluded it would not.
Involnert Management Inc v Aprilgrange Ltd [2015] EWHC 2225 (Comm)	Critique of requiring knowledge of the legal right for election; discusses insurers' knowledge in non-disclosure contexts.	Cited by critics of Peyman; the court acknowledged the criticism but held Peyman remains binding and not unprincipled.
Coastal Estates Pty Ltd v Melevende [1965] VR 433	Australian authority holding that ignorance of legal right to rescind prevents election; discussed suggested cases of deemed knowledge.	Considered in argument about whether express contractual rights attract a rule of deemed knowledge; the court treated the case as not establishing a general rule that overrides Peyman.
Sargent v ASL Developments Ltd [1974] HCA 40; (1974) 131 CLR 634	High Court of Australia decision suggesting express contractual rights may be treated differently (a party is deemed to know the terms of its own contract).	Discussed by the court; the court observed it provides some support for the Appellant's position but concluded it does not establish the law in this jurisdiction against Peyman.
Other authorities cited (non-exhaustive list from the judgment): Evans v Bartlam [1937] AC 473; Young v Bristol Aeroplane Co Ltd [1946] AC 163; Hughes v Metropolitan Railway Co (1877) 2 App Case 439; Clough v L & N W Ry (1871) LR 7 Ex 26; The Laconia [1977] AC 850; Hourigan v Trustees Executors & Agency Co Ltd (1934) 51 CLR 619; Stewart v Kennedy (1890) 15 App Cas 108; and various modern authorities on contractual certainty.	Each authority was cited for propositions about election, estoppel, contractual interpretation, or appellate procedure.	The court cited and discussed these authorities in context where relevant; some were used to explain doctrinal points, others to illustrate policy arguments. The court ultimately held Peyman remained binding.

Court's Reasoning and Analysis

The panel of judges (here referred to as Judge Males, Judge Zacaroli and Judge Miles) approached the appeal in a structured way. The court accepted the trial judge's findings of fact about actual knowledge and did not permit an appeal against those findings. The central legal question was whether the court should depart from or distinguish Peyman v Lanjani in cases where the right to terminate is an express contractual term, and whether Company A's conduct after the amalgamation amounted to waiver by election.

Key analytical steps and findings:

1. The court summarised the established law on election and estoppel (drawing on The Kanchenjunga and related authorities): election requires knowledge of the facts and, according to Peyman, knowledge of the legal right to elect. Estoppel is a distinct equitable principle requiring representation and detrimental reliance.
2. The trial judge had found (and that finding was not open to challenge on appeal) that Company A's decision-maker knew of the amalgamation (the facts giving rise to a termination right) but did not know that the contract gave Company A a right to terminate for a solvent amalgamation until 5 November 2018. He had not deliberately avoided discovering the legal right and had not been advised on that provision until the solicitor's discussion.
3. The court held that Peyman is a binding authority in this court and embodies the principle that knowledge of the legal right is required for an election to affirm. The decision in Peyman was reviewed in detail, and the court rejected arguments that Peyman should be distinguished where the right in question is an express contractual right.
4. The Appellant's submission that a party is as a matter of law deemed to know the express terms of its contract (and therefore cannot plead ignorance of an express termination right) was rejected. The court regarded such a rule as unrealistic as a matter of fact and inconsistent with Peyman. The court emphasised that the presumption that legal advice implies knowledge remains a rebuttable presumption of fact.
5. The court considered the phrase "obviously available" (from Kosmar) and concluded it was best read as addressing "blind-eye" knowledge (deliberate avoidance), not as dispensing with the requirement of knowledge of the legal right. On the facts, the trial judge had found no deliberate avoidance.
6. On the issue of whether Company A's post-amalgamation conduct constituted an election: the court accepted that the conduct was objectively clear and, if the decision-maker had known of the right, would likely have amounted to a clear and unequivocal election to affirm. However, because the decision-maker did not know of the right, there was no election in law.
7. The court observed that equitable estoppel could have provided relief if Company D had shown detrimental reliance on Company A's conduct, but that avenue had been closed by the earlier summary judgment ruling that there was no evidence of detrimental reliance.
8. The court also considered clause 13.1 (which preserves rights despite delay) and concluded that if Company A had had the requisite knowledge an unequivocal election by conduct would have been effective despite clause 13.1; but this point was not ultimately decisive because there was no knowledge.
9. On the contractual interpretation of clause 10.5, the court analysed the language and context and concluded that "the remaining value of this Contract to the Supplier" was intended to refer to anticipated future income receivable by the supplier for the relevant supply premises (a straightforward measure that could be calculated promptly), rather than anticipated profit after costs.

Holding and Implications

Holding: The court dismissed the appeal. The core ruling is emphasised below.

APPEAL DISMISSED

Direct consequences on the parties:

• The court upheld the trial judge's conclusion that Company A validly terminated the contract on 14 November 2018 and was entitled to the termination payment the judge awarded; Company A is entitled to recover the termination payment of £3,946,861.56.
• There was no election to affirm because the decision-maker for Company A did not know that clause 10.2(d) conferred a termination right until 5 November 2018, and Peyman v Lanjani remains binding on this court on that point.
• The court rejected the submission that a contracting party is as a matter of law deemed to know express contractual termination rights for the purpose of waiver by election; whether the party had the requisite knowledge remains a question of fact (subject to the rebuttable presumption about legal advice).
• On clause 10.5 the court held the termination payment measure was 50% of anticipated future income for the relevant premises, as a pragmatic contractual compromise to permit prompt calculation.

Broader legal implications (as discussed in the opinion, without adding new law): the court acknowledged criticisms of Peyman but held that Peyman has stood for decades and is binding. The court also explained the practical mitigations (judicial scepticism about claims of ignorance, the rebuttable presumption of legal advice, and the availability of estoppel where detriment is shown) and emphasised that these policy considerations do not displace the requirement of knowledge of the right for election under existing authority.

Notes on Sources and Limitations

This summary is confined to information explicitly contained in the provided opinion and strictly anonymises persons and named commercial entities. Where the opinion did not provide granular detail (for example, exhaustive factual minutiae beyond what is summarised above), that information is not included. No inference or additional factual detail beyond the opinion text has been introduced.