SJD Group Ltd v KJM (Scotland) Ltd [2010] ScotCS CSOH_13 (04 February 2010)

SJD Group Ltd v KJM (Scotland) Ltd [2010] ScotCS CSOH_13 (04 February 2010)

The court found that a franchise agreement was entered into in August 2003 and governed the parties' relationship until July 2008. After expiry, the parties continued under an implied contract on the same terms, except for duration, which was indeterminate and terminable on reasonable notice. Six months was determined as reasonable notice for termination.

Citation
[2010] ScotCS CSOH_13
Parties
Pursuer: SJD Group Limited; Defender: KJM (Scotland) Limited
Jurisdiction
Scotland
Judgment Date
04 February 2010
Procedural Posture
Commercial Action / Proof Before Answer
Outcome
Judgment for pursuer
Legal Topics
Implied Contracts, Franchise Agreements, Termination of Contracts, Reasonable Notice
Contract Law Commercial Law Implied Contracts Franchise Agreements Termination of Contracts Reasonable Notice

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Parties

SJD Group Limited

Pursuer

KJM (Scotland) Limited

Defender

Procedural Posture

Commercial Action / Proof Before Answer

Legal Issues

  1. 1 Whether a franchise agreement existed between the parties from August 2003
  2. 2 Whether the agreement was extended beyond its five-year term
  3. 3 Whether the defender breached the agreement by failing to pay sums due and by terminating without reasonable notice

Ratio Decidendi

The court found that a franchise agreement was entered into in August 2003 and governed the parties' relationship until July 2008. After expiry, the parties continued under an implied contract on the same terms, except for duration, which was indeterminate and terminable on reasonable notice. Six months was determined as reasonable notice for termination.

Court Disposition

Judgment for pursuer

Orders

  • Declarator that a franchise agreement existed from August 2003 and was extended for an indeterminate period terminable on six months' reasonable notice
  • Case put out By Order for discussion of precise terms of interlocutor and further procedure