Cases - Ellis Tylin Ltd v Co-operative Retail Services Ltd

Record details

Name

Ellis Tylin Ltd v Co-operative Retail Services Ltd

Date

(1999)

Citation

BLR 205

Keywords

Contract - maintenance and repair services - termination - notice of termination - right to terminate only arising if the parties first made a written proposal for the alteration of fees 10 months from the commencement of the contract, failing which the parties may terminate by giving 3 months notice - whether a valid notice to terminate had been given

Summary

The defendant contracted with the claimant to provide the maintenance and repair services for a period of three years with provision for revision of rates of payment at the end of the first and second years. The contract was operated for a year. The relationship between the parties did not run smoothly. The contractual right of the claimant to terminate the agreement only arose if they first made a written proposal for the alteration of future fees.

The written proposal was to be made after the expiry of 10 months from the commencement of the contract. The commercial purpose shown by the clause was considered to be that the parties should be free to negotiate for variation of the fee effective from the first and second anniversaries of the contract, and if negotiations are unsuccessful, either party should be at liberty to terminate, in the case of the claimant by giving notice effective not earlier than 3 months after the anniversary.

The claimant was not entitled to give a notice at a date or in terms calculated to produce a termination of the contract earlier than allowed for by the clause or otherwise produce a result inconsistent with this purpose. However, notices may be valid if they are 'sufficiently clear and unambiguous to leave a reasonable recipient in no reasonable doubt as to how and when they are intended to operate'.

In particular, the Court considered that a party in the position of defendant might wish to insist on receiving the whole of the 3 months notice, because to receive any less would deprive them of a valuable right to have their equipment serviced. The Court rejected the suggestion that the parties to the agreement can have intended that the notice given should be not a day more than 3 months.