Abbey Catering Ltd v Saunders [2005] EWCA Civ 398 (23 March 2005)

Abbey Catering Ltd v Saunders [2005] EWCA Civ 398 (23 March 2005)

The phrase 'business introduced by the Vendor' in the sale agreement includes both pre-transfer and post-transfer business generated by the vendor, including business arising from her activities as an employee under the service agreement, provided it is under the Elegant Cuisine label and not Abbey Catering's original business. The additional payment is due if the Gross Sales Turnover, so defined, exceeds £350,000.

Citation
[2005] EWCA Civ 398
Parties
Claimant/appellant: Abbey Catering Limited; Defendant/respondent: Julia Saunders (formerly Roe)
Jurisdiction
England and Wales
Judgment Date
23 March 2005
Procedural Posture
Civil Appeal / Appeal From County Court Judgment
Outcome
Appeal dismissed, cross-appeal allowed
Legal Topics
Interpretation of Sale Agreements, Earn Out Clauses, Goodwill in Business Sales
Contract Law Commercial Law Interpretation of Sale Agreements Earn Out Clauses Goodwill in Business Sales

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 2 Party arguments 2 Amounts and remedies 6
Sign in to unlock

Parties

Abbey Catering Limited

Claimant/appellant

Julia Saunders (formerly Roe)

Defendant/respondent

Procedural Posture

Civil Appeal / Appeal From County Court Judgment

Legal Issues

  1. 1 Proper construction of 'business introduced by the Vendor' in a sale agreement earn-out clause
  2. 2 Whether post-transfer business generated by the vendor as employee counts towards Gross Sales Turnover threshold

Ratio Decidendi

The phrase 'business introduced by the Vendor' in the sale agreement includes both pre-transfer and post-transfer business generated by the vendor, including business arising from her activities as an employee under the service agreement, provided it is under the Elegant Cuisine label and not Abbey Catering's original business. The additional payment is due if the Gross Sales Turnover, so defined, exceeds £350,000.

Court Disposition

Appeal dismissed, cross-appeal allowed

Orders

  • Respondent to have costs on the standard basis
  • By consent, costs awarded in the sum of £1,100