Summary: Two contracting parties each purported to terminate a contract on the grounds of the other’s repudiatory breach. In this trade mark licence dispute, the licensee purported to terminate a trade mark licence agreement on the grounds of a repudiatory breach by the licensor and treated the agreement as at an end. The licensor did not accept the repudiation, but terminated the agreement on the grounds of the licensee’s own breach. The ground relied upon by the licensee to terminate transpired not to be a breach, but it sought nonetheless to rely on another alleged breach not known to it at the time, to justify termination.

The court ruled that the later alleged breach can be relied upon by the licensee as a defence to the licensor’s claim for damages, but not to found a claim for damages against the licensor, because the unknown alleged breach was not the cause of the termination.

Please speak to Marie-Louise King, Partner in Druces LLP’s Litigation & Dispute Resolution team, and who acted for the First, Fourth and Fifth Third Parties in the proceedings, for further information

Relevant to: Parties involved in commercial contracts, legal practitioners

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