Kavitha Gupta's blog

Hard-nosed commercial negotiation that exploits monopoly advantage not duress   Times Travel’s business depended upon selling Pakistan International Airlines’ tickets. The travel agency was pressured by the airline to waive claims for unpaid commissions under its old contract, by the threat of the airline not entering a new contract. The airline had no obligation to enter into the new contract, but the travel agency could not survive without it. The agency signed a waiver agreement but later argued that it should be rescinded for duress. The UK Supreme Court held that, “While this entailed hard-nosed commercial negotiation that exploited [the airline's] position as a monopoly supplier, it did not involve the reprehensible means of applying pressure” and so was not economic, or lawful act, duress. Duress is a common law basis on which to rescind a contract. The essential elements are: there must be a threat or pressure exerted by D that is illegitimate (but not necessarily unla...

  20 July 2021 A party who had paid more than the value of the benefit under a contract that was later found to be void could not set off the overpayments against a claim for restitution for a later period where they failed to make payments altogether.  A college entered into a contract with a construction company, SFM, to build a new sixth-form building, which would then be hired out to the college.  The college took possession of the building in 2013 and paid yearly hire payments until 2017, at which point they stopped making payments.  At trial, the contract was held to be ultra vires and void.  SFM claimed in unjust enrichment, seeking restitution for the benefit of the use of the building from the time that payments stopped being made. The college contended that all the hire payments that they had made up to 2017 (£3.2 million) should be netted off against the total value of the use of the building (£1.7 million). This would leave a net balance in favour of...

20 July 2021 The UK Supreme Court has held that accrued liquidated damages survived termination where the contractor never completed the work in question. The relevant contract was for the development of software by Triple Point, and provided for the payment of liquidated damages for undelivered work “per day of delay from the due date for delivery up to the date PTT accepts such work”. The  Court of Appeal  had noted that the “orthodox” position was that, if the work was never finished, liquidated damages accrued up to the date of termination of the contract, but not after.  However, in Triple Point, the provision that the liquidated damages were to be paid up to the date of completion (when the works were accepted) meant that they had no application where the contractor never completed the works at all, and the employer would instead need to claim general damages with respect to the outstanding works.  The Court of Appeal considered that the little-known case of...