Acre 1127 Ltd (In Liquidation) v De Montfort Fine Art Ltd

Acre 1127 Ltd (In Liquidation) v De Montfort Fine Art Ltd

Castle was not in repudiatory breach for failing to place orders in the second, third, and fourth quarters because the parties' mutual mistake and confusion over the initial order prevented clear performance obligations. De Montfort's subsequent conduct in asserting the existence of the initial order and producing a forged order was not, in context, repudiatory. However, De Montfort's letter of 18 April 2006 constituted a repudiatory breach by purporting to terminate the contract, but Castle was not entitled to damages as it was not ready and willing to perform. De Montfort was entitled to damages for lost profits for the second, third, and fourth quarters only.

Parties
Appellant/defendant: Acre 1127 Limited (in liquidation) formerly known as Castle Galleries Limited (in liquidation); Respondent/claimant: De Montfort Fine Art Limited
Jurisdiction
England and Wales
Judgment Date
09 February 2011
Procedural Posture
Civil Appeal / Appeal From High Court Judgment After Trial
Outcome
Appeal allowed in part; damages to De Montfort reduced; Castle's counterclaim dismissed.
Legal Topics
Breach of Contract, Repudiatory Breach, Damages, Common Mistake, Supply Agreements, Mitigation of Loss
Contract Law Commercial Law Breach of Contract Repudiatory Breach Damages Common Mistake Supply Agreements Mitigation of Loss

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Parties

Acre 1127 Limited (in liquidation) formerly known as Castle Galleries Limited (in liquidation)

Appellant/defendant

De Montfort Fine Art Limited

Respondent/claimant

Procedural Posture

Civil Appeal / Appeal From High Court Judgment After Trial

Legal Issues

  1. 1 Whether Castle was in repudiatory breach of the Supply Agreement by failing to place minimum quarterly orders
  2. 2 Whether De Montfort's conduct in asserting a non-existent order and producing a forged order was itself repudiatory
  3. 3 Whether the Supply Agreement was void for common mistake

Ratio Decidendi

Castle was not in repudiatory breach for failing to place orders in the second, third, and fourth quarters because the parties' mutual mistake and confusion over the initial order prevented clear performance obligations. De Montfort's subsequent conduct in asserting the existence of the initial order and producing a forged order was not, in context, repudiatory. However, De Montfort's letter of 18 April 2006 constituted a repudiatory breach by purporting to terminate the contract, but Castle was not entitled to damages as it was not ready and willing to perform. De Montfort was entitled to damages for lost profits for the second, third, and fourth quarters only.

Court Disposition

Appeal allowed in part; damages to De Montfort reduced; Castle's counterclaim dismissed.

Orders

  • Award of damages to De Montfort for lost profits limited to second, third, and fourth quarters only, subject to calculation (provisionally £442,442.04)
  • Castle's counterclaim dismissed