War can have dramatic effects on contractual relations – regardless of whether the parties are even connected to the nations at war.

The outbreak of war makes trade between British subjects and enemies illegal. As far back as the French revolutionary war, Sir William Scott in the case The Hoop (1799) considered that such a rule was well established. In common law, any contract that involves such trade is automatically discharged by the outbreak of war or by a party becoming an enemy.

This extends to any contract that, although not directly connected with an enemy, necessarily involves trade with or advantage to the enemy. Such a law was thought to be required by public policy to prevent furnishing the enemy with 'the sinews of war'. Furthermore, an enemy cannot sue or continue an action in English Courts without Royal licence in common law.