Duffen v FRA BO SpA [1998] EWCA Civ 748 (30 April 1998)

Duffen v FRA BO SpA [1998] EWCA Civ 748 (30 April 1998)

Clause 7.2 of the agency agreement is a penalty and unenforceable as it provides for a fixed sum irrespective of the unexpired duration of the contract, resulting in a windfall and failing to represent a genuine pre-estimate of loss. Plaintiff is entitled to commission on direct sales and compensation under the Commercial Agents Regulations.

Citation
[1998] EWCA Civ 748
Parties
Plaintiff/respondent: Paul Jeremy Duffen; Defendant/appellant: FRA. BO SpA
Jurisdiction
England and Wales
Judgment Date
30 April 1998
Procedural Posture
Appeal From High Court (queen's Bench Division) / Court of Appeal (civil Division) Judgment
Outcome
Appeal allowed; judgment for £100,000 set aside; judgment for £31,799.11 (including contractual interest) entered for plaintiff; action remitted to Central London County Court; leave to amend defence and counterclaim granted.
Legal Topics
Penalty Clauses, Liquidated Damages, Commercial Agency, Fraudulent Misrepresentation, Compensation Under Commercial Agents Regulations
Contract Law Commercial Law European Law Penalty Clauses Liquidated Damages Commercial Agency Fraudulent Misrepresentation Compensation Under Commercial Agents Regulations

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Parties

Paul Jeremy Duffen

Plaintiff/respondent

FRA. BO SpA

Defendant/appellant

Procedural Posture

Appeal From High Court (queen's Bench Division) / Court of Appeal (civil Division) Judgment

Legal Issues

  1. 1 Whether clause 7.2 of the agency agreement is a penalty or genuine pre-estimate of loss
  2. 2 Entitlement to commission on direct sales
  3. 3 Effect of alleged fraudulent misrepresentation

Ratio Decidendi

Clause 7.2 of the agency agreement is a penalty and unenforceable as it provides for a fixed sum irrespective of the unexpired duration of the contract, resulting in a windfall and failing to represent a genuine pre-estimate of loss. Plaintiff is entitled to commission on direct sales and compensation under the Commercial Agents Regulations.

Court Disposition

Appeal allowed; judgment for £100,000 set aside; judgment for £31,799.11 (including contractual interest) entered for plaintiff; action remitted to Central London County Court; leave to amend defence and counterclaim granted.

Orders

  • Judgment for £100,000 set aside
  • Judgment for £31,799.11 (including contractual interest) entered for plaintiff