Commercial bulletin: key developments for businesses in May 2026

Implied right to terminate

The Court of Appeal has ruled[1] that a right to terminate on reasonable notice can be implied, depending on the wording of the contract and commercial context.

The Court drew a distinction between a contract intended to be perpetual (to last forever) or indefinite (to last until terminated).

The key point in this case was interpretation of the following clause ‘the agreement shall continue indefinitely, unless terminated earlier’ which only granted one party contractual termination rights.

The Court of Appeal overturning the High Court decision concluded that the term “indefinitely” meant that either party was entitled to terminate on reasonable notice.

This case emphasises that in circumstances where the parties intend an agreement to run in perpetuity, that intention must be expressed in unequivocal terms.

‘Subject to contract’: Court finds qualification waived and binding agreement reached

A recent High Court decision[2] highlights the risk of negotiating “subject to contract”; this can either be waived expressly or by implication. However, whether the parties have concluded a binding agreement will depend on the circumstances. In early correspondence between the parties, it was labelled “subject to contract”, but when this language was dropped, the courts found that the parties intended to be bound.

Whilst using “subject to contract” does not decide if the correspondence bears that qualification, parties should consider whether a distinction has been and what is agreed vs still subject to contract. If parties do not wish to be bound, they should expressly state that no agreement is binding until a formal agreement has been executed.

FCA fines John Wood Group PLC almost £13m for issuing misleading statements

The FCA fined John Wood Group PLC just under £13m for publishing inaccurate financial results following issues raised by their auditors and an independent review[3].

The FCA’s fine was for breach of:

1. Listing Rule 1.3.3R (for listed companies to take reasonable care to ensure that misleading information is not published); and
2. Listing Principle 1 (a listed company must take reasonable steps to establish and maintain adequate procedures, systems, and controls to enable it to comply with its obligations).

This shows that transparency is key; it is essential to have procedures and systems in place to ensure information is accurate.

Updated guidance on PSCs

New statutory guidance published in February[4] clarifies examples of what amounts to “significant influence or control” for the PSC regime. The guidance focuses on the fourth and fifth PSC conditions; catching people who may not hold shares or voting rights but still direct a company’s affairs. This can arise through absolute decision or veto rights, informal influence over board or shareholder decisions, or cumulative relationships even where influence is not formally documented.

Additionally, other roles such as lawyers and lenders can be caught if their influence goes beyond the ordinary role.

[1] Zaha Hadid Ltd v The Zaha Hadid Foundation [2026] EWCA Civ 192 (27 February 2026)

[2] GMC Utilities Group Ltd v Sumitomo Electric Industries Ltd [2026] EWHC 885 (TCC) (16 April 2026)

[3] FCA fines John Wood Group PLC for issuing misleading statements | FCA

[4] Statutory guidance on the Meaning of “Significant Influence or Control” over Companies in the Context of the Register of People with Significant Control

Jo Malone trade mark challenge from Estée Lauder

The cosmetics company, Estée Lauder, has brought claims against Jo Malone personally, her company Jo Loves and Zara’s UK distributor over a fragrance collaboration marketed as “A creation by Jo Malone CBE, founder of Jo Loves.[1]”

Jo Malone sold her original “Jo Malone London” perfume business to Estée Lauder in 1999, including registered trademarks over her name. Estée Lauder now alleges breach of contract, trademark infringement and passing off, arguing that Malone no longer has the right to commercialise her name.

Whilst the Trade Marks Act 1994 includes an “own name” defence, the courts apply it narrowly. Selling trademark rights generally means giving up unrestricted commercial use of that name.

This case serves as a warning to business owners commercialising their name. The outcome will likely depend on the wording of the contract and whether the marketing wording is found to be a use of a personal name vs commercial trademark.

[1] Jo Malone hopes ‘sense will prevail’ in lawsuit over her name – BBC News

CMA crackdown on breaches of consumer law

The Digital Markets Competition and Consumers Act (‘DMCCA’) brought significant changes to consumer law, including granting the CMA enforcement powers and banning ‘drip pricing’.

Drip pricing is where mandatory fees are not included in the advertised price at the outset of a transaction with a consumer.

The CMA is taking its new enforcement powers seriously and has issued its first fine of £4.2m against the AA Driving School and BSM Driving School and ordered that they refund £760,000 to learner drivers.   The CMA found that the driving schools had not included a mandatory booking fee in the advertised lesson price[1].

CMA publishes guidance on unfair contract terms under the Consumer Rights Act

The CMA has issued draft guidance[2] on unfair contract terms.  The guidance highlights the importance of fairness and transparency in consumer contracts and flags high-risk terms such as automatic renewals, unfair exit fees and liability caps.

Updates to price marking laws

On 6 April 2, new amendments to the Price Marking Order 2004 came into force, introducing the following key changes[3]:

1. Where a product is offered at more than one price (particularly in relation to loyalty prices), both prices must be displayed clearly and separately;
2. Goods sold by weight must be priced per kilogram, and goods sold by volume must be priced per litre;
3. Businesses should only use general price reductions (e.g. “20% off everything”) when it is not reasonably practical to display the reduced price on every individual product; and
4. All price information must be presented in a reasonable size in a clear, legible font.

[1] Automobile Association Developments Limited: consumer protection enforcement case – GOV.UK

[2] Refreshing our guidance on unfair contract terms – GOV.UK

[3] Price Marking Order 2004: government guidance – GOV.UK

RTM v Bonne Terre and the definition of consent

The Court of Appeal has confirmed the meaning of “consent” under data protection law[1].

The previous High Court ruling suggested that consent could be invalid where an individual was subjectively unable to make independent decisions (such as a gambling addiction), even if unknown to the business.

However, it has now been confirmed that consent is an objective test; data controllers must show that consent was freely given, specific, informed and unambiguous. They do not need to prove what was subjectively in the individual’s mind at the time.

ICO guidance on data protection complaints

From 19 June 2026, the Data Use and Access Act (DUA Act) requires organisations to have formal data protection complaints processes in place and the ICO has published guidance[2] on what controllers must do in practice. Key points include:

1. Using clear and plain language to tell individuals how to complain to the organisation and the ICO at the point of collecting personal data;
2. Acknowledging receipt of a complaint within 30 days;
3. Investigating complaints and keeping individuals updated without undue delay; and
4. Once the investigation has concluded, communicate the outcome to the individual.

Businesses should read the ICO’s guidance and take steps now to implement compliant complaint processes before 19 June 2026. This could include updating privacy notices and DSAR response templates to explain individuals’ complaint rights and training staff on how to recognise complaints, especially if they arrive through informal channels such as social media.

[1] RTM v Bonne Terre Ltd & Anor [2026] EWCA Civ 488 (21 April 2026)

[2] What are data protection complaints? | ICO

Government responds to consultation on ethnicity and disability pay gap reporting

The government has published its response[1] to the consultation on the introduction of mandatory ethnicity and disability pay gap reporting for large employers (those with 250 or more employees).

Most respondents supported mandatory reporting, including:

• publishing information about the workforce’s ethnicity and disability make-up and pay gaps
• producing action plans
• mirroring the gender pay gap framework, and
• using the Equality Act definition of disability.

The reporting duties will be introduced via primary legislation and supporting regulations at a date to be confirmed.

Current consultation exercises and calls for evidence

The government has published the following:

• A consultation on the new draft code of practice on trade union right of access – closes 20 May 2026
• A consultation on the threshold for triggering collective redundancy obligations seeking views on the level and methods by which the new organisation-wide threshold for triggering collective redundancy obligations might be set – closes 21 May 2026
• A consultation on proposals to prevent the misuse of non-disclosure agreements in cases of workplace harassment and discrimination – closes 8 July 2026
• A call for evidence on the 2014 Transfer of Undertakings (Protection of Employment) Regulations – which will inform potential reform of the TUPE Regulations – closes 1 July 2026.

[1] Consultation on mandatory ethnicity and disability pay gap reporting: government response – GOV.UK

Withdrawal of conditional job offer amounted to a breach of contract

In this case[1], a job applicant accepted an employment offer by email which was subject to satisfactory references, a right‑to‑work check and a six‑month probation period.

Although no written contract was issued, the applicant completed onboarding documents and provided right‑to‑work evidence. Before the start date, the employer withdrew the offer for reasons unrelated to the conditions of the offer. The Employment Tribunal held there was no binding contract. On appeal, the Employment Appeal Tribunal found that:

Dismissed employee allowed to claim post-dismissal PHI payments as a wages claim

Ms McMahon was employed by AXA. Her contract provided for permanent health insurance (PHI) benefits if she was unable to work due to illness, paying 75% of salary (increasing annually) until recovery or age 65. Although AXA promised to secure these benefits through insurance, no policy was in place. Ms McMahon became eligible for PHI benefits in 2011 but received no payments. She was dismissed in September 2013 due to long‑term incapacity. AXA argued that dismissal ended any obligation to pay PHI benefits. Ms McMahon sought to extend an ongoing unauthorised deductions from wages claim to cover PHI payments post-dismissal.

The Court of Session held that:

• PHI benefits payable under the contract could continue after dismissal and constitute “wages”.
• Dismissal did not automatically terminate the obligation where the contract imposed a freestanding or collateral obligation to pay PHI benefits.
• Alternatively, an implied term prevented AXA from dismissing Ms McMahon to avoid paying those benefits, rendering the dismissal ineffective for that purpose.

The Court allowed the extension of the wages claim and remitted the case to the Employment Tribunal for determination of entitlement and quantum.

[1] Kankanalapalli v Loesche Energy Systems Ltd [2026] EAT 49

[2] McMahon v AXA ICAS Ltd [2026] CSIH 19