Francotyp-Postalia Ltd v Whitehead & Ors

Francotyp-Postalia Ltd v Whitehead & Ors

The court held that the proposed severance of the definition of 'Restricted Area' would necessarily modify the meaning of other valid covenants that incorporate the same definition, thus failing the first limb of the severance test. The court cannot rewrite or modify valid parts of the contract under the blue pencil test. Therefore, the answer to the preliminary issue is 'no'.

Parties
Claimant: Francotyp-Postalia Ltd; Defendant: Kevin Whitehead; Defendant: Steve Suckling; Defendant: Rochelle Capital Ltd; Defendant: Frank It Ltd
Jurisdiction
England and Wales
Judgment Date
25 February 2011
Procedural Posture
Civil / Trial of Preliminary Issue of Law
Outcome
Claimant's application for severance refused
Legal Topics
Severance of Contract Terms, Restrictive Covenants, Blue Pencil Test
Contract Law Restraint of Trade Severance of Contract Terms Restrictive Covenants Blue Pencil Test

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Parties

Francotyp-Postalia Ltd

Claimant

Kevin Whitehead

Defendant

Steve Suckling

Defendant

Rochelle Capital Ltd

Defendant

Frank It Ltd

Defendant

Procedural Posture

Civil / Trial of Preliminary Issue of Law

Legal Issues

  1. 1 Whether the definition of 'Restricted Area' in clause 21.1.1 of the Franchise Agreements can be severed so as to limit it to 'the Territory' only.

Ratio Decidendi

The court held that the proposed severance of the definition of 'Restricted Area' would necessarily modify the meaning of other valid covenants that incorporate the same definition, thus failing the first limb of the severance test. The court cannot rewrite or modify valid parts of the contract under the blue pencil test. Therefore, the answer to the preliminary issue is 'no'.

Court Disposition

Claimant's application for severance refused