The parties had undertaken the sale of a business (from I to TR) with part of the consideration to be payable on later calculation of the turnover. The agreement provided for an audit if the parties failed to agree. TR issued a figure. I argued that TR had caused additional losses by failing to maintain product standards.
Held: I’s appeal succeeded. The additional compensation would not become due until audited. A right of retention might also exist pending settlement of a counterclaim. The case was remitted for reconsideration.
Judges:
Lord Hope, Deputy President, Lord Saville, Lord Rodger, Lord Collins, Lord Clarke
Citations:
[2010] UKSC 19, 2010 SCLR 396, 2010 GWD 23-437, 2010 SLT 941
Links:
SC, SC Summ, Bailii, Bailii Summary
Jurisdiction:
Scotland
Citing:
See Also – Inveresk Plc v Tullis Russell Papermakers Ltd SCS 15-Feb-2008
The defenders had sold their business assets to the pursuers. The parties now disputed the sale terms, and in particular the calculation of a clause settling additional consideration.
Held: The court repelled the defenders’ pleas-in-law, . .
At Outer House – Inveresk Plc v Tullis Russell Papermakers Ltd SCS 29-Aug-2008
Action for sums due under commercial contract. . .
Appeal from – Inveresk Plc v Tullis Russell Papermakers Ltd SCS 30-Jun-2009
. .
Cited – Garscadden v Ardrossan Dry Dock Co 1910
The court ordered the lifting of a lien subject to consignation. The right of retention is not the assertion of an absolute right. . .
Cited – Earl of Galloway v McConnell 1911
. .
Cited – British Motor Body Co Ltd v Thomas Shaw (Dundee) Ltd 1914
. .
Cited – Mannai Investment Co Ltd v Eagle Star Assurance HL 21-May-1997
Minor Irregularity in Break Notice Not Fatal
Leases contained clauses allowing the tenant to break the lease by serving not less than six months notice to expire on the third anniversary of the commencement date of the term of the lease. The tenant gave notice to determine the leases on 12th . .
Cited – John Haig and Co v Boswell-Preston 1915
A tenant may be able to retain rent where the landlord was in material breach of his duty under the lease to maintain fixed equipment. . .
Cited – Manheath Ltd v H J Banks and Co Ltd (Scotland) OHCS 2-Jun-1995
If contract is subject to a suspensive condition, performance is not waivable. . .
Cited – Prenn v Simmonds HL 1971
Backgroun Used to Construe Commercial Contract
Commercial contracts are to be construed in the light of all the background information which could reasonably have been expected to have been available to the parties in order to ascertain what would objectively have been understood to be their . .
Cited – Claddagh Steamship Co Ltd v Steven and Co HL 1919
There were two contracts for the sale of ships. The question was whether, when one ship was requisitioned by the Government, the purchasers were obliged to accept and pay for the other. Their case was that they were not obliged to do so, as the . .
Cited – Hoult and Another v Turpie ScS 29-Apr-2003
Lord Drummond Young said that the principle of mutuality has generally been given a wide scope in Scots law. It is derived from the exceptio non adimpleti contractus. The requirement that the obligations should be counterparts of each other should . .
Cited – Purak Ltd v Byzak Ltd 2005
Lord Drummond Young said that the right or retention only arises where one party is in material breach of contract. . .
Cited – Bank of East Asia Ltd v Scottish Enterprise and Another (Scots) HL 24-Jan-1996
A right of retention against unfulfilled obligations does not apply if those conditions came to be fulfilled. Where both sides are to perform a contract in stages, ‘the counter obligation and consideration for payment of stage one is the completion . .
Cited – Luigi Macari v Celtic Football and Athletic Co Ltd SCS 8-Jun-1999
One of the issues was whether Mr Macari had been entitled to refuse to carry out the instructions of the managing director because the club were in breach of another obligation to him under the contract between the parties.
Held: In the . .
Cited – Hoult and Another v Turpie ScS 29-Apr-2003
Lord Drummond Young said that the principle of mutuality has generally been given a wide scope in Scots law. It is derived from the exceptio non adimpleti contractus. The requirement that the obligations should be counterparts of each other should . .
Cited – Seton 1683
The defender was a widow, charged on a bond granted by her husband. She said that the pursuer had owed her husband freight under a charterparty. The pursuer argued that the debt was not liquid, because the defender would need to prove that her . .
Cited – Muir and Milliken v Kennedy 1697
A minor was sued as heir to his father, for a sum in a bond of caution granted by his father. The court allowed the defender time to show that the debt had already been paid. He then craved compensation for a sum allegedly owed to the estate on the . .
Cited – Bim Kemi v Blackburn Chemicals Ltd CA 3-Apr-2001
The question was the degree of connection which must be shown between (1) a claim for unliquidated damages for breach of a contract and (2) a cross-claim for unliquidated damages for breach of a different contract between the same parties, in order . .
Cited – Taylor v Forbes 1830
The pursuer sued for freight for carrying a cargo of flour for the defender from Perth to Aberdeen. The pursuer did not insert sufficient planks to line the hold and protect the cargo from contact with the bilge water. He claimed that it was not . .
Cited – Bank of Boston Connecticut v European Grain and Shipping Ltd (‘The Dominique’) HL 1989
A shipping company and a shipper responsible for the freight disputed the effect of their contract. The ship was duly loaded with its cargo and set out for the voyage from India to Europe. The bills of lading were signed. When the ship called at . .
Cited – Aries Tanker Corp v Total Transport Ltd; The Aries HL 1977
Claims for freight charges are an exception to the general rule that all claims between parties must be resolved in one action. A claim for freight cannot be a claim ‘on the same grounds’ as a counter-claim for loss or damage arising out of the . .
Cited – Aries Tanker Corp v Total Transport Ltd; The Aries HL 1977
Claims for freight charges are an exception to the general rule that all claims between parties must be resolved in one action. A claim for freight cannot be a claim ‘on the same grounds’ as a counter-claim for loss or damage arising out of the . .
Cited – Canada Enterprises Corp Ltd v MacNab Distilleries Ltd CA 1976
(Decided in 1976) ‘inexpedient’ in the rule, simply means unjust. Because there was not the requisite identity of parties, the strict requirements of set off were not fulfilled. . .
Cited – Lovie v Bairds Trustees 1895
. .
Cited – Graham v Gordon 1843
‘Rent is not liquid in the sense that a sum due by bond is. It is matter of contract in consideration of something to be done. It is paid for possession of the subject let. If the tenant says he has not got entire possession, that is a good answer . .
Cited – Johnston v Robertson 1861
The parties agreed for the pursuer to erect a poor-house, to be completed and the keys were to be delivered by a specified day, under a penalty of andpound;5 per week of delay in completing it.
Held: This was not a penalty but a provision for . .
Cited – Ross v Ross SCS 1895
The pursuer was the widow of Sir Charles Ross who died in 1883 and was succeeded by his pupil son. From then until 1893, when her son attained majority, the pursuer had acted as his sole tutor and curator. She was entitled to an annuity of . .
Lists of cited by and citing cases may be incomplete.
Contract
Updated: 18 July 2022; Ref: scu.409979