The plaintiff had been appointed as an exclusive sales agent for the defendant for a minimum period of four years. The defendants terminated it eighteen months early claiming fraudulent misrepresentation.
Held: The clause setting the damages claim was a penalty clause and was unenforceable. The termination of the agency gave rise to a claim additional to the statutory claim. A commercial agent whose contract had been terminated within the regulations was entitled to augment the common law damages due to him with the sums due to him by virtue of the Commercial Agents Regulations. The right approach was to look at net earnings which might have made during the remainder of the period for which his agency would have run had it not been terminated prematurely, but without taking into account common law concepts such as avoided loss and mitigation. An award based on gross earnings would give the agent an undeserved windfall. The judge awarded compensation for loss of future earnings, ignoring the ordinary rules of mitigation.
Times 15-Jun-1998,  EWCA Civ 748,  EuLR 167,  ECC 58
Commercial Agents (Council Directive) Regulations 1993 No 3053
England and Wales
Applied – Dunlop Pneumatic Tyre Company Ltd v New Garage and Motor Company Ltd HL 1-Jul-1914
The appellants contracted through an agent to supply tyres. The respondents contracted not to do certain things, and in case of breach concluded: ‘We agree to pay to the Dunlop Pneumatic Tyre Company, Ltd. the sum of 5 l. for each and every tyre, . .
Cited – Philips (Hong Kong) Ltd v The Attorney General of Hong Kong PC 9-Feb-1993
After referring to two Australian cases on penalty clauses in contracts: ‘These statements assist by making it clear that the court should not adopt an approach to provisions as to liquidated damages which could, as indicated earlier, defeat their . .
Cited – Export Credits Guarantee Department v Universal Oil Products HL 1983
A contract provided for the payment of a stated sum by one party to the contract (A) to the other party (B) in the event of the non-performance by A of one of more contractual obligations owed by A not to B himself but to C, who was not a party to . .
Cited – Lonsdale v Howard and Hallam Ltd CA 8-Feb-2006
The claimant sought damages after his agency with the defendants was terminated. The central issue was whether compensation was to be calculated at two years commission as derived from French practice or otherwise.
Held: ‘there is no clear . .
These lists may be incomplete.
Updated: 11 June 2021; Ref: scu.144226