Chipsaway International Ltd v Kerr [2009] EWCA Civ 320 (11 March 2009)

Chipsaway International Ltd v Kerr [2009] EWCA Civ 320 (11 March 2009)

Clause 23.1(a) of the franchise agreement restrains the former franchisee from engaging in any business within the territory that competes with the type of service provided under the agreement at the time of termination, regardless of whether a replacement franchisee has been appointed. The judge's interpretation failed to give effect to the commercial purpose of the clause and was not supported by the language or context of the agreement.

Citation
[2009] EWCA Civ 320
Parties
Claimant: ChipsAway International Ltd; Defendant: Kerr
Jurisdiction
England and Wales
Judgment Date
11 March 2009
Procedural Posture
Civil Appeal / Appeal From Chancery Division Judgment
Outcome
Appeal allowed
Legal Topics
Franchise Agreements, Restrictive Covenants, Restraint of Trade, Interpretation of Contracts
Contract Law Commercial Law Franchise Agreements Restrictive Covenants Restraint of Trade Interpretation of Contracts

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 Authorities cited 2 Party arguments 2
Sign in to unlock

Parties

ChipsAway International Ltd

Claimant

Kerr

Defendant

Procedural Posture

Civil Appeal / Appeal From Chancery Division Judgment

Legal Issues

  1. 1 Proper interpretation of post-termination restrictive covenant in franchise agreement
  2. 2 Whether defendant breached restrictive covenant by continuing business after franchise termination

Ratio Decidendi

Clause 23.1(a) of the franchise agreement restrains the former franchisee from engaging in any business within the territory that competes with the type of service provided under the agreement at the time of termination, regardless of whether a replacement franchisee has been appointed. The judge's interpretation failed to give effect to the commercial purpose of the clause and was not supported by the language or context of the agreement.

Court Disposition

Appeal allowed

Orders

  • Judgment of the Chancery Division set aside
  • Matter remitted for argument as to relief