NAVIGATING RISING COSTS: CONTRACT DISPUTES IN ENGLAND & WALES IN AN ERA OF ECONOMIC VOLATILITY
The commercial landscape since 2021 has been defined by a perfect storm of economic pressures that few businesses could have anticipated when entering into long term contractual commitments.
Persistent inflation, dramatic fluctuations in energy prices, rising interest rates, tariffs and supply chain disruption have fundamentally altered the cost base upon which many commercial agreements were predicated. For parties locked into fixed-price contracts or agreements with inadequate price adjustment mechanisms, the consequences have been significant – and in many cases, existential.
This article examines the legal and practical challenges facing businesses as they navigate contract disputes arising from economic volatility. It considers the limitations of relief under English law, identifies common flashpoints in commercial relationships, and offers practical guidance on both dispute resolution and futureproofing contractual arrangements.
For senior executives and in-house counsel, understanding these dynamics is essential not only for managing current exposures but for building resilience into future commercial dealings.
The legal landscape: limited relief under English law
Businesses facing unsustainable cost increases often look first to the court for assistance or at least for a helpful legal doctrine which will assist in negotiations with their counterparty. Under English law, however, the available relief is very narrow and the overarching point to bear in mind is that the court will not come to the assistance of a party to rectify a bad bargain, especially in respect of a negotiated contract between two commercial entities.
Apr-Jun 2026 issue
CMS Cameron McKenna Nabarro Olswang LLP