Phones 4u Ltd v EE Ltd

Phones 4u Ltd v EE Ltd

EE's counterclaim for loss of bargain damages fails because EE's termination letter communicated only a termination under clause 14.1.2 of the Trading Agreement (appointment of administrators), not a termination for repudiatory breach or renunciation. The law requires the innocent party to communicate a decision to terminate for breach to found a loss of bargain claim. EE did not do so; therefore, its counterclaim has no real prospect of success and is summarily dismissed.

Parties
Claimant: Phones 4U Limited (in administration); Defendant: EE Limited
Jurisdiction
England and Wales
Judgment Date
16 January 2018
Procedural Posture
Commercial Contract Dispute (summary Judgment Application) / Summary Judgment Ruling on Counterclaim
Outcome
Summary judgment granted for Phones 4U; EE's primary counterclaim dismissed; permission to amend refused.
Legal Topics
Termination of Contract, Repudiatory Breach, Loss of Bargain Damages, Summary Judgment, Construction of Termination Notices
Contract Law Commercial Law Termination of Contract Repudiatory Breach Loss of Bargain Damages Summary Judgment Construction of Termination Notices

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Parties

Phones 4U Limited (in administration)

Claimant

EE Limited

Defendant

Procedural Posture

Commercial Contract Dispute (summary Judgment Application) / Summary Judgment Ruling on Counterclaim

Legal Issues

  1. 1 Whether EE's counterclaim for loss of bargain damages survives where EE terminated the contract under a contractual right not triggered by breach
  2. 2 Whether the termination letter constituted an acceptance of repudiatory breach or renunciation by Phones 4U
  3. 3 Whether the pleaded obligations (Key Obligation and PAYG Obligation) existed and were breached

Ratio Decidendi

EE's counterclaim for loss of bargain damages fails because EE's termination letter communicated only a termination under clause 14.1.2 of the Trading Agreement (appointment of administrators), not a termination for repudiatory breach or renunciation. The law requires the innocent party to communicate a decision to terminate for breach to found a loss of bargain claim. EE did not do so; therefore, its counterclaim has no real prospect of success and is summarily dismissed.

Court Disposition

Summary judgment granted for Phones 4U; EE's primary counterclaim dismissed; permission to amend refused.

Orders

  • EE's primary counterclaim for loss of bargain damages is dismissed with summary judgment.
  • Permission for EE to amend its Defence and Counterclaim is refused.