In Jackson Distribution Ltd v Tum Yeto Inc  EWHC 982 (QB) the Claimant sought to recover damages for breach of contract after the Defendant terminated a contract granting the Claimant sole distribution rights in the UK and Ireland for a line of clothing. The court had to consider what in fact were the terms of the agreement between the Claimant and the Defendant and whether the Defendant was entitled to terminate the agreement and on what basis. The court acknowledged that it was established law that the terms of an agreement can be accepted by conduct Brogden v the Metropolitan Railway Company  2 A.C 666 applied and that the burden of proving that the parties have acted on the terms of an unwritten agreement lies with the party seeking to rely on that agreement. When considering whether or not the draft agreement relied on by the Claimant was in fact agreed upon by the parties, the judge took into account: the business relationship between the parties; the Claimant’s evidence that he was an experienced businessman and his self-professed view that until both parties had signed a written agreement, neither of them could rely on its terms; the correspondence between the parties that clearly indicated that negotiations were ongoing in relation to the contract price; the evidence of the Defendant that it did not intend to agree to the draft contract until all terms were finalised; a delay of two months before the Claimant notified the Defendant that the Defendant’s proposed agreement was unacceptable to him; and a lack of any suggestion in the correspondence between the parties that terms of the agreement were set out in the Claimant’s draft agreement. As to whether or not the Defendant was entitled to terminate the contract, the court found that there was an implied term that either party was entitled to terminate the contract on reasonable notice to the other party. The court did not, however, consider that there was a repudiatory breach on the part of the Claimant entitling the Defendant to terminate the contract. When considering what would have been reasonable notice of termination, the judge considered a number of cases, the level of formality in the parties’ relationship, the lack of a competition clause or threat of competition, the length of the relationship and early investment, the percentage of turnover and a number of other factors.
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