High Court highlights the importance of compliance with notice provisions on termination of a contract
The High Court, in the recent case of Ticket2Final OU v Wigan Athletic AFC Ltd, has stipulated the importance of following notice provisions within a contract when that contract is terminated.
The case concerned a contractual agreement between Ticket2Final OU (T2F) and Wigan Athletic AFC Ltd (Wigan). Wigan agreed with T2F that, in return for a significant fee, T2F would obtain advertising opportunities and would be able to sell Wigan ticket options for future matches. Accordingly, Wigan confirmed that it was within its power and authority to provide said tickets in order to perform its contractual obligations to T2F.
A dispute between the parties arose when Wigan failed to supply tickets to T2F. In return, as a result of Wigan's failure, T2F claimed for breach of contract and misrepresentation. Wigan alleged that it had terminated the contract with T2F due to late payments by T2F under the contract. The contract stipulated that Wigan was entitled to terminate should T2F fail to pay sums due to Wigan where those sums remained outstanding for 7 days following the notice being given to T2F. Importantly, the contract provided conditions which specified how notice had to be given in the prescribed form under the contract.
The Decision of the Court
It was held that Wigan had breached the contract with T2F and had misrepresented to T2F that it was able to supply the tickets to T2F. The most interesting decision of the court concerned the claim by Wigan that it had in fact terminated the contract due to T2F's failure to pay sums that were due under the contract. Wigan had sent its notice demanding payment via email. Wigan argued that the notice provision under the contract did not apply to notices regarding failure to pay sums due under the contract. Wigan further claimed that, by continuously communicating via email, the parties' conduct had created an implied term within the contract that certain notices could be provided by email. The judge disagreed with the arguments supplied to the court by Wigan in respect of the notice provisions within the contract. He held that the notice provisions within the contract did apply to notices demanding payment before termination of the contract with T2F.
It was the opinion of the judge that the purpose of having a prescribed mode of giving notice under the contract was to ensure that significant notices i.e. notices that have the potential to lead to termination, are served in the correct manner to highlight their significance to the recipient.
The case has highlighted two factors:
- That you cannot necessarily rely on the conduct of the parties during the relationship to determine how certain documents that have a prescribed method of service under the contract should be served; and
- That careful consideration must be taken as regards how notice is to be given to ensure that it is effective.