Spectrum Agencies was the commercial agent for the sale of Crocs Europe BV’s (unaccountably) popular line of footwear. Employees of Spectrum found that Crocs was slow to respond to orders – to the point where one of them posted a satiric video sequence about the relationship with Crocs, based on the opening credits of Star Wars. It began: ‘That’s a Croc!! Of Shite!! SPECTRUMS WAR OF LIGHT VS DARK’. The posting was forwarded to customers of Crocs but later taken down. Crocs took offence at this and had their solicitors send a stern letter to Spectrum: this was a breach of Spectrum’s duty of good faith which harmed Crocs and amounted to a repudiatory breach of Spectrum’s core duty as an agent. In return, Spectrum claimed compensation for termination of the agency relationship of between £13 and £18 million. The trial judge characterised the posting as a lighthearted joke about what was common knowledge in the industry, and that it didn’t amount a repudiation by Spectrum of its agency contract with Crocs.
Crocs appealed: Crocs Europe BV v Anderson,  EWCA Civ 1400. Mummery LJ largely agreed with the trial judge. Under the regulations applicable to commercial agents and the general law of either agency or contract, what the Spectrum employee had done was not sufficient to amount to a repudiatory breach of contract which gave rise to a right to treat the contract as having been terminated. While agents do owe fiduciary duties to their principals, not every aspect of the relationship involves that level of duty, and not even a breach of that duty would necessarily give rise to a right to terminate on the part of the aggrieved principal. Spectrum’s breach was ‘more in the nature of a one-off incident that did not involve bad faith on the part of the claimant, was not shown to involve a real risk of harm to the defendant ... and did not, when viewed objectively, evince an intention to abandon or to refuse to perform the commercial agency contract.’ Bean J thought the breach was ‘quite close to the borderline’ but that it was open to the trial judge to conclude that it was not repudiatory. Hughes LJ concurred with both of his colleagues.
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