Formal Contractual Notice Not Necessary - Flexibility was Implied
Formal notice did not need to be given under the contractual notice provisions for a notification to be valid. The judge’s conclusion in this commercial case is an important reminder for businesses to ensure their contracts are clear as to when they will expect formal notices to be given.
An online schooling company enjoyed significant growth following its 2016 launch; and the founder Tom Crombie sold it to the claimant (‘Inspired’) in late 2022.
After completion of the sale, Inspired sued Crombie for breach of warranty and fraudulent misrepresentation and held back part of the purchase price. It claimed that the company’s true value was significantly less than half the £9m price in the sale and purchase agreement (SPA).
Inspired relied heavily on a series of what it described as “highly offensive, obscene, vulgar, racist, sexist and discriminatory” emails passing between Crombie and a long-time friend and senior colleague at the company, which Crombie dismissed as jokes. Inspired said those emails would have amounted to gross misconduct; and had it been aware of the content of them, it would have walked away from the acquisition.
It also claimed that Crombie had breached the non-compete provision by planning to launch a rival online school with a former colleague. Inspired’s claims failed.
Notice provisions
One of the issues related to the completion accounts schedule in the SPA (whereby the parties agreed to adjust the purchase price upwards or downwards after completion with reference to a target or estimate). The SPA included a notice clause as follows:
“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”
That table required the seller to send any notices for the buyer to a specific individual.
The SPA also required Inspired to deliver the first draft of the completion accounts and Purchase Price Statement to Crombie as soon as reasonably practicable and, in any event, within 20 business days of completion (a period extended with mutual agreement).
Inspired sent the drafts purportedly in compliance with the SPA. Crombie disputed the draft accounts but emailed the person who sent the drafts - not to the individual specified within the SPA. Inspired claimed that the email notification was invalid and the seller was therefore deemed to have approved the draft completion accounts.
Inspired’s argument was rejected. The judge took the view that the SPA wording implied a less formal process than situations where the contract stated that ‘a notice’ must be given. For example, there was reference to ‘any written notification’ in one clause in relation to the seller
notifying agreement or otherwise of the draft accounts. The judge concluded that this “plainly signals an intention that there could be a number of ways in which the notification is given”.
Crombie had made a written notification by way of email, therefore the completion accounts and the purchase price statement had not been deemed agreed.
The judge noted that Inspired failed to engage with Crombie’s proposed adjustments and suggested compromise, choosing instead to defend its position “to the last”.
Key takeaway
The decision is a reminder that businesses must ensure their contractual notice provisions are clearly and unambiguously drafted. In what circumstances, for example, will they expect a formal notice in specific form; and when will flexibility around providing notification be acceptable?
Businesses are urged to engage commercial solicitors when negotiating and drafting SPAs and other business contracts to ensure their interests are protected.
1Inspired Education Online Ltd v Crombie [2025] EWHC 1236 (Ch)
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