EE, a mobile phone network operator, terminated its contract with Phones 4U, a mobile phone contract retailer, when Phones 4U went into administration. The appointment of administrators was agreed to be not a breach of contract but it did entitle EE to terminate the contract. The termination letter did not mention any breach but, if there had been a repudiatory breach and/or renunciation, as EE alleged, did the termination letter terminate for that breach so that EE could bring a claim for loss of its bargain?

In summary judgment proceedings by Phones 4U’s administrator to dismiss EE’s counterclaim for loss of its bargain, the court said that, for EE to bring its common law claim for damages for loss of its bargain, it had to show that the termination which created that loss had been for breach (actual or anticipatory). EE had, however, clearly only terminated under a clause that gave a right to do so that was independent of any breach. EE, which had not accused Phones 4U of any breach, had made clear it was not waiving any breach that might exist and reserved its rights, but a right merely reserved is a right not exercised. EE could still sue and pursue all available remedies for breach committed by Phones 4U before termination. What it could not do was to re-characterise the events and claim that it terminated for breach when that is not what it did. Nor could it say that it treated Phones 4U’s alleged renunciation as bringing the contract to an end when that was not what actually happened.

Phones 4u Ltd v EE Ltd [2018] EWHC 49 (Comm)