Demand Media Ltd v Koch Media Ltd

Demand Media Ltd v Koch Media Ltd

Koch was entitled under the Distribution Agreement to sell stock until termination and to set prices; Demand had no general right to require return of stock prior to termination. Koch was entitled to debit manufacturing costs for WH Smith stock, as Demand had agreed to WH Smith's terms regarding destruction of unsold stock. Koch was not liable for conversion or breach of confidence. Koch was, however, required to account for missing stock at market value and was not entitled to debit the Further Debited Sum in the final account. The final account, after adjustments, resulted in a sum due to Demand.

Parties
Claimant: Demand Media Limited; Defendant: Koch Media Limited
Jurisdiction
England and Wales
Judgment Date
13 January 2020
Procedural Posture
Commercial Contract Dispute / High Court Trial Judgment
Outcome
Judgment for Claimant in part; final account balance in favour of Demand Media Limited
Legal Topics
Distribution Agreements, Implied Terms, Breach of Contract, Conversion, Confidentiality, Final Account Settlement
Contract Law Commercial Law Distribution Agreements Implied Terms Breach of Contract Conversion Confidentiality Final Account Settlement

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Parties

Demand Media Limited

Claimant

Koch Media Limited

Defendant

Procedural Posture

Commercial Contract Dispute / High Court Trial Judgment

Legal Issues

  1. 1 Whether Koch breached the Distribution Agreement by failing to return or by selling stock requested by Demand
  2. 2 Whether Koch breached the Distribution Agreement by selling stock at a discount without Demand's approval
  3. 3 Whether Koch committed conversion by failing to return or by selling stock

Ratio Decidendi

Koch was entitled under the Distribution Agreement to sell stock until termination and to set prices; Demand had no general right to require return of stock prior to termination. Koch was entitled to debit manufacturing costs for WH Smith stock, as Demand had agreed to WH Smith's terms regarding destruction of unsold stock. Koch was not liable for conversion or breach of confidence. Koch was, however, required to account for missing stock at market value and was not entitled to debit the Further Debited Sum in the final account. The final account, after adjustments, resulted in a sum due to Demand.

Court Disposition

Judgment for Claimant in part; final account balance in favour of Demand Media Limited

Orders

  • Koch Media Limited to pay Demand Media Limited £16,968.47 as the final account balance, reflecting adjustments for missing stock and improper debits.
  • All other claims by Demand Media Limited dismissed.