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It is commonplace for contracts of all types to incorporate provisions relating to service of notices or correspondence in respect of matters relating to that contract. Oftentimes this is done for a reason, namely, to ensure that notices or correspondence reaches the individual responsible for oversight.

However, is there a difference between a notice, notification or communication under the contract and how important is the provisions dealing with notices (so called “notices clause”)? As the next two cases show, proper drafting and understanding of the notices clause, so often and afterthought, is paramount.

First is the High Court decision in Hughes and Ors v CSC Computer Sciences Ltd [2025] EWHC 302 (Comm).

CSC Computer Sciences Ltd (Buyer) acquired shares in a Target under the terms of a Share Purchase Agreement (SPA) which contained earnout provisions stipulating that the purchase price would be paid in tranches. Namely, first tranche would be calculated at Year 1 and second tranche would be calculated at Year 2.

Pursuant to the SPA, the Buyer would prepare the earnout determination at the end of each year and would deliver this to the Sellers.

At Year 1, the Buyer prepared the earnout determination emailing this to the Sellers. The Sellers did not agree with the Buyer’s calculations, raising a dispute and discussions followed.

As these discussions continued, and at Year 2, the Buyer prepared the earnout determination, again emailing this to the Sellers. The Sellers once again did not agree with the Buyer’s calculations, raising a dispute, however on this occasion shortly after receipt of the earnout determination, the Sellers questioned whether the earnout determination was correctly served on the Sellers. It was only at this stage that the Sellers also raised this question as to Year 1 earnout determination.

The Sellers’ objection to proper service stemmed from the notices clause in the SPA which stated that:

“Any notice or other communication under or in connection with this Agreement shall be in writing and shall be delivered personally or sent by first class post pre-paid recorded delivery (or air mail if overseas) or by fax to the party due to receive the notice or communication…”

Here the earnout determinations were served by email only. The Buyer’s position was that the earnout determinations were not covered by the notices clause as they were not “notices”.

The court to the view that the Buyer was wrong in the position it took and that the earnout determinations were indeed covered by the notices clause which was written in very broad terms and indeed included the words “notice or other communication”. Clearly the parties intended for all material communications to fall within the scope of the notices clause it was concluded.

Whilst the court found that both earnout determinations fell foul of the services clause and were therefore invalid, the Buyer’s blushes were somewhat spared by the fact that the Sellers failed to reach this conclusion earlier and the Sellers were estopped from disputing the validity of Year 1 earnout determination on the basis that they had not raised issue with the service promptly, instead engaging in discussions. Year 2 earnout determination faced no such obstacles.

Conversely, in Education Online Ltd v Crombie [2025] EWHC 1236 (Ch), the court took a different view.

Here, Inspired Education Online Ltd (Buyer) acquired shares in a Target under the terms of an SPA which contained a price adjustment mechanism on the basis of draft completion accounts, which the Buyer was to prepare and send to the Seller.

The SPA stated that once the draft completion accounts are delivered to the Seller, the Seller was required to “… notify the Buyer in writing…” whether the Seller agrees with the draft completion accounts within 20 business days. If the Seller failed to make “any written notification” to the Buyer, the SPA went on to say, the Seller would be deemed to have agreed the form of the draft completion accounts.

On preparing the draft completion accounts, the Buyer (namely an individual in the employ of the Buyer) provided these to the Seller by email. The Seller disputed the draft completion accounts and communicated this dispute the Buyer by virtue of emailing that individual who had sent the draft completion accounts to the Seller. This was done within 20 business days.

The Buyer however claimed that this notification was invalid and the Seller is deemed to have agreed to the  draft completion accounts. The Buyer’s stance stemmed from the notices clause in the SPA which stated:

“Any notice given to a party under or in connection with this Agreement (unless otherwise expressly provided for in this Agreement) shall be in writing in English and sent to the Party, by a method set out in clause 27.3, at the address or email address, and for the attention of the contact as set out in the following table”

The individual whom the Seller emailed was not included in the relevant table in the SPA and thus the Seller has failed to comply with the notices clause, so argued the Buyer.

The court disagreed. The notices clause in the SPA was narrowly drafted including reference to “notice” only and did not expand to any other form of communications. The Seller was however required to submit a “written notification” and not a “notice”. The wording of the SPA was clear in the court’s view and “notification” fell short of a formal standard of a “notice”. Further the completion accounts mechanism could have used the word “notice”, it did not, and therefore the notices clause does not apply to it.

The Seller’s dispute was therefore served validly and the Seller was not deemed to have agreed to the draft completion accounts.

Notices clauses are often seen as boilerplate provisions with the parties focusing on negotiating the main terms of an SPA. Whilst in Education Online Ltd v Crombie [2025] EWHC 1236 (Ch) the Buyer’s false comfort in the notices clause meant that it could not take advantage of what it wrongly perceived as the Seller’s mistake, in Hughes and Ors v CSC Computer Sciences Ltd [2025] EWHC 302 (Comm) the Buyer’s misunderstanding of the notices clause meant that it breached its obligations under the SPA. A mistake which could have easily been avoided.

Due care and attention should be given to all aspects of the contract, including the would-be boilerplate provisions to reflect each party’s intention. Due care and attention should also be given to understanding each provision of the contract that party has agreed to, failure to do so could be expensive.

These cases show that notices clauses should not be overlooked. The method of service and the wording used can have legal consequences. It is important to understand how these clauses apply and to follow the contract terms carefully.

For advice or assistance with contract drafting, review or disputes, you may contact IMD Corporate. They are available to support with matters involving notices clauses and other contractual issues.

This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.

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