On 8 June 2016, the Court of Appeal handed down judgment in the landmark tracker mortgage case of Alexander v West Bromwich Mortgage Company Ltd [2016] EWCA Civ 496. There were two key contractual documents in play: the offer document (‘the Offer’), and the lender’s standard terms and conditions (‘T&Cs’). The T&Cs contained an inconsistency clause in favour of the Offer. Finding for the borrower, the Court of Appeal held a clause in the T&Cs entitling unilateral variation of the interest rate in a way unconnected with the Base Rate, and in a way different to the Offer, to be inconsistent with the Offer and the term of the Offer to prevail. The Court of Appeal also held inconsistent with the Offer a clause allowing demand for payment in full on 1 months’ notice, without any event of default. That would have the effect of nullifying the 25-year term set out in the Offer. But that is not to say such a term would not be possible, simply that the Court was of the view that the circumstances would have to be clear on the face of the Offer and ‘carefully circumscribed so as not to deprive the Borrower of the benefit of the bargain which has been reached’ (at [92]). Naturally this decision will be of interest to lenders and borrowers alike and indeed to those faced with cases of contractual inconsistency.

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