An Appeal Against A Judgment Holding

1623 WordsDec 18, 20147 Pages
Introduction This case is an appeal against a judgment holding that both parties to a substantial commercial contact were entitled to terminate by reason of the conduct of the other party. The Court of Appeal (CA) held that the High Court was wrong in implying a general obligation on the parties to a long-term contract to co-operate in good faith. They stated that there is no such duty which applies generally in English Law. As a consequence, the respondent was not entitled to terminate the contract as a result of the appellant 's conduct and I agree with the outcome, as the judgement was reasonably balanced. Background In 2008, Medirest entered into a contract with the NHS Trust for the provision of catering and cleaning services in two hospitals in Essex. Under the contract Medirest incurred 'service failure points ' where its performance did not reach the level required; the contract set out the precise rules for determining how failure points would be calculated and how these points could result in payment deductions. Medirest was to monitor its own performance and set out its service failure calculations. The Trust could challenge Medirest’s calculations and the contract provided for a resolution process to settle the issue of how many failure points had been incurred. Once the figures for service failure points and corresponding deductions had been established, the Trust had discretion whether to make payment deductions or not. In the early stages, the Trust was faced
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