Mar 25, 2015

Termination by Email? - Check the Contractual Provisions

Ticket2Final v Wigan Athletic AFC highlights the need for parties to a contract to comply fully with any formal notice provisions in the contract when they seek to terminate it. It also makes clear that parties should make express contractual provision if they want notices to be validly served by email.

Ticket2Final (T2F) and Wigan entered into an agreement where in return for a substantial fee, T2F would receive advertising opportunities and be able to sell ticket options for Wigan games.

Wigan confirmed in the agreement that it had power and authority to perform its contractual obligations, which included the supply of the tickets to T2F.  When the time came to supply tickets to T2F, Wigan failed to do so and T2F claimed for breach of contract and also for misrepresentation.

Wigan counter-argued that it had terminated the contract for late payments to it by T2F. The contract entitled Wigan to terminate if T2F failed to pay any sums due and the sums remained outstanding for 7 days following notice.

A formal notice clause in the contract (clause 11) required notices to be given in a prescribed manner. Clause 11 required notices to be in writing and delivered by hand or first class post to the registered office (or sent by fax).  Wigan failed to comply with the formal notice clause when it demanded payment before termination but argued that the notice clause did not apply to a notice demanding payment and also that there was an implied term arising from the parties' conduct that formal notices could be given by email.

The Judge disagreed and pointed out that one of the purposes of Clause 11 was to require notices, particularly ones which if not complied with might result in the contract being terminated, to be served in a specific way. In those circumstances, the party receiving the notice is in no doubt as to its importance.

This case highlights the necessity of complying fully with notice provisions when attempting to terminate a contract.  It also makes clear that parties should make express contractual provision if they wish notices to be validly served by email.  Just because email has taken over from fax as the usual method of communicating does not mean that parties can assume formal notices can be served that way.

in: Case Law, Companies, Contract, News

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