Coranta Corporation Ltd v. Morse Business Applications Ltd [2007] ScotSC 35 (11 July 2007)

Coranta Corporation Ltd v. Morse Business Applications Ltd [2007] ScotSC 35 (11 July 2007)

The appeal was refused because the pursuer's averments did not establish a sufficient causal link between the defender's waivers and the impossibility of fulfilling the suspensive condition. The waivers were not positive acts of prevention within the meaning of the legal principle, and the rights waived were acquired after the original agreement. There was no basis for implying a term that would prevent the defender from waiving such rights, especially given the detailed nature of the contract and the express allocation of risk regarding employee retention.

Citation
[2007] ScotSC 35
Parties
Pursuer/appellant: Coranta Corporation Limited; Defender/respondent: Morse Business Applications Limited
Jurisdiction
Scotland
Judgment Date
11 July 2007
Procedural Posture
Commercial Contract Dispute (appeal) / Appeal Against Decree of Dismissal
Outcome
Appeal refused; decree of dismissal adhered to.
Legal Topics
Business Transfer Agreement, Suspensive Conditions, Deemed Purification, Implied Terms, Causation in Contract, Damages for Breach of Contract
Contract Law Commercial Law Business Transfer Agreement Suspensive Conditions Deemed Purification Implied Terms Causation in Contract Damages for Breach of Contract

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Parties

Coranta Corporation Limited

Pursuer/appellant

Morse Business Applications Limited

Defender/respondent

Procedural Posture

Commercial Contract Dispute (appeal) / Appeal Against Decree of Dismissal

Legal Issues

  1. 1 Whether the defender's waiver of restrictive covenants and contractual rights caused non-fulfilment of a suspensive condition, thus deeming the condition purified and entitling the pursuer to payment of the second instalment; Whether an implied term existed that the defender would not, of its own motion, bring about the termination of employment contracts so as to make fulfilment of the condition impossible.

Ratio Decidendi

The appeal was refused because the pursuer's averments did not establish a sufficient causal link between the defender's waivers and the impossibility of fulfilling the suspensive condition. The waivers were not positive acts of prevention within the meaning of the legal principle, and the rights waived were acquired after the original agreement. There was no basis for implying a term that would prevent the defender from waiving such rights, especially given the detailed nature of the contract and the express allocation of risk regarding employee retention.

Court Disposition

Appeal refused; decree of dismissal adhered to.

Orders

  • Refuses the appeal and adheres to the Sheriff's interlocutor of 5 October 2006.
  • Certifies the cause as suitable for the employment of junior counsel for the purposes of the appeal.