Case in Point is a quarterly publication by Solicitor Advocate Ben McCosker on key cases with implications for businesses and individuals in the areas of public, property, privacy and contract law, together with summaries of the practical points arising.
Choices, Choices…
The remedy you are ultimately seeking may determine the right you should exercise and therefore your choices.
It is an irony of the law that in choosing to exercise a legal right, you could leave yourself without a remedy in court. This has in fact happened on several occasions, in recent history.
Rights and Remedies
Three cases. Three contracts. In each, the claimant was faced with a choice. In the first case, the claimant had chosen to keep the contract alive in response to the other party’s serious breach and sought to compel them to do what they agreed. In the second, the claimant sought to claim compensation for the other party’s serious breach. In the third, the claimant terminated the contract for the other party’s serious breach but then brought a money claim for services rendered, during the life of the contract.
In two cases, the choice they made was ultimately their undoing. In one, fortuitously, they were vindicated, though pending final determination of their claim.
To discover you have wrongfooted yourself at the end of a very expensive and stressful litigation process, is unfortunate to say the least.
Parties to contractual disputes should take early advice, ahead of decision-time, to ensure they protect their position. Should their decision ultimately be tested via the court process, they may come to regret their choices.
We’ll now look at each of these cases and conclude with some key takeaways.
The First Case
Iconic Sports Eagle Investment, LLC “Iconic” v John Textor [2026] EWHC 1498 (Comm) “Iconic”.
About
Iconic are the minority shareholder of a company called Eagle Football Holdings Limited (“Eagle”). Eagle have equity interests in Lyonnais (the well-known French football club) and Botafogo FR (a highly successful Brazilian football club) and, formerly, in Crystal Palace F.C.
Iconic agreed to sell its shares in Eagle to John Textor, the majority shareholder, under a put option agreement dated 16th November 2022 (“the Contract”). The aggregate priceagreed under the Contract for the shares, exceeds US$100 million.
It was agreed under the Contract that on 26th July 2024 both parties had to be ready and willing to perform their obligations to sell and buy respectively, and that Mr. Textor’s obligations were subject to Iconic complying with its own.
Mr. Textor was admittedly not ready. In fact, a few days before, he had ‘repudiated’ the Contract (that means, committed such a serious breach that it entitled Iconic to terminate the Contract in response). Iconic chose not to accept that breach and therefore kept the contract alive. Both parties remained bound to perform by 26th July, accordingly.
Though they had the right to issue it, Iconic had not prepared the share certificate by 26th July, either.
Iconic sued Mr. Textor in the commercial court for an order that he do as he agreed and buy their shares. This is called an order for ‘specific performance’. Specific performance is an equitable remedy which means, whether to grant it is within the discretion of the court even though Mr. Textor was required to purchase the shares under the Contract.
Pending final determination of the claim, the legal issue the court had to decide was whether the Court could grant such an order if Iconic were not ready and willing to complete on the 26th July, provided they were ready on the date the court ordered ‘specific performance’.
Decision and Reason
The court answered yes. This was even though it is a basic rule of contract law that a claimant, here Iconic, was bound to perform its own obligations if they did not accept Mr. Textor’s repudiation and even though, if the contract is not terminated, then it remains alive for all purposes and Iconic remained subject to all of its own obligations and liabilities under it.
That is because, it did not automatically follow that Iconic would be deprived of the equitable remedy of specific performance, since equity is a distinct branch of law from the common law of obligations in which contract sits, if Iconic did not perform all its own obligations under the Contract. The question of whether to grant specific performance is simply a different question from asking whether Iconic was in breach of contract by failing to perform, after Mr. Textor repudiated.
The justification for this is, why should Iconic prepare for an event which is not, or not yet, going to take place?
Provided that Iconic are ready to sell at the date of the final hearing in this claim, they should get their order and Mr. Textor would have to do what he agreed.
The Second Case
So far, so sensible, though this next case demonstrates why the remedy you are ultimately seeking may determine the right you should exercise, and therefore your choices.
In this next case, the ‘elementary rule of contract law that a claimant is contractually bound to perform its own obligations if they do not accept the other party’s serious breach as terminating the contract’ was ultimately their undoing because of their choice.
About
Hitex is a Jordanian manufacturer of medical supplies. Uniserve Ltd is an English company whose business had consisted of providing logistical support in relation to the transport of goods, including Personal Protection Equipment (‘PPE’) for the NHS.
On 21st April 2020, at the height of the Covid19 pandemic, these two parties entered into a supply contract under which Hitex agreed to supply Uniserve with 80 million ‘Type IIR Surgical Disposable Fluid Resistant Masks’ for US $0.30 per mask, in accordance with an agreed delivery schedule (“the Contract”). Time was of the essence for delivery dates under the Contract, and the masks were to be collected from Hitex’s factory in Jordan.
Hitex failed to meet the deliveries due on the first four delivery dates, although 1 million masks were delivered, in two batches which were collected on 16th and 20th May 2020.
The parties agreed a revised delivery schedule. The next deliveries, each of 1 million masks, were due on 31st May and 7th June 2020. These quantities were made available for delivery on the due dates but were only collected on 10th and 17th June 2020. By about this time Uniserve was keen to get out of the Contract.
No further deliveries took place under the contract and on 14th June 2020 Hitex had available the 2 million masks due for delivery. It had, by then, complied with its obligations as set out in the revised schedule.
On or about 17th June 2020, it was communicated to Hitex on behalf of Uniserve that the Contract was over. The court accepted that Hitex would have concluded at this point that Uniserve had no intention of further performing the Contract.
Because Hitex had at this stage complied with its delivery obligations under the revised schedule, Uniserve was not entitled to terminate the Contract in this way and its purported termination was itself a ‘repudiation’ of the Contract (see above for repudiation), which would have entitled Hitex to terminate and claim damages for the same. Hitex chose not do so. Again therefore, as in Iconic, the Contract was kept alive.
From or soon after 11th July 2020 Hitex did not have available sufficient masks to meet the cumulative total required by the revised schedule but would have had enough on any given date to supply the number of masks required, for that constituent delivery.
Hitex sued Uniserve for damages amounting to US $23.1 million, under section 50 of the Sale of Goods Act 1979 (“the 1979 Act”) for Uniserve’s alleged failure to collect the delivery on 14th June and all subsequent deliveries. A total of 77 million masks.
Decision and Reason
Whilst it did not strictly arise for other reasons, the court considered whether Hitex was entitled to damages under section 50 of the 1979 Act, when it could not perform its obligations by delivering the cumulative total quantities set out in the revised delivery schedule. The court decided no.
If Hitex was seeking to continue to perform the Contract after Uniserve’s repudiation, it would have been required to continue accumulating stock to meet the cumulative totals outstanding according to the revised schedule. Hitex did not do that.
The court decided if the contract was kept alive for performance, Hitex was obliged to fulfil its own obligations and could not recover damages for Uniserve’s failure to accept 77 million masks, when it never had 77 million masks available for delivery in the first place.
Again, so far, so sensible. It should be apparent however that this is incongruent with Iconic. Iconic were still in-principle able to obtain an order for specific performance, even if they had not performed their obligations on the required date. Whilst each contract will turn on its own interpretation, this is perhaps also demonstrable of the greater flexibility of equitable remedies.
Subject to interpretation of the contract in any individual case, the idea in Iconic of not having to prepare for an event which is not, or not yet, going to take place does not work with the common-law remedy of damages.
Whilst, pragmatically, it is perfectly understandable for a party to a contract which is, for all practical purposes, dead, to not want to continue servicing it, claimants cannot have their cake and eat it. The remedy you are ultimately seeking may determine the right you should exercise and therefore your choices.
You cannot claim damages for another party’s alleged failure to perform, when their obligation is conditional upon performance of your own and you don’t do so.
The Third Case
In the third case, unlike the first two, the claimant did choose to accept the other party’s repudiation and terminate the contract. They then however sued for the value of the services they provided, in unjust enrichment. This is otherwise known as ‘a quantum meruit’ claim.
The claimant was a firm of solicitors. Arguably, they should have known better but even lawyers can get this wrong.
About
The Winros Partnership (“Winros”) were retained as Global Energy Horizons Corporation’s (“Global”) solicitors in connection with proceedings against one of Global’s former associates, a Mr Gray. These proceedings were in respect of the alleged misappropriation of an opportunity to develop innovative technology. In the event, Global succeeded for £3.6 million but Mr. Gray’s assets were ultimately valued at nil.
Winros acted for Global under a conditional fee (no-win, no-fee) agreement (“CFA”). Importantly, the CFA was not a simple solicitor’s retainer. It was a sophisticated and highly calibrated agreement which allocated risk between the parties and addressed numerous situations.
The CFA comprehensively described the circumstances in which Winros would be entitled to be paid. Clause 14 of the same gave both parties an express right to terminate, in certain circumstances. It did not however exclude the common-law right to terminate for a repudiation of the CFA (again, see above for ‘repudiation’).
Importantly, under clause 14.3 of the CFA, Winros could end the CFA if Global did not meet its responsibilities. If this happened, Global would have to pay Winros’ fees for the work done to the termination date and disbursements.
In the event, Global did not meet its responsibilities and such breach also amounted to a ‘repudiation’ of the CFA. By letter dated 24th September 2016 Winros chose to terminate the CFA, alleging repudiatory breach by Global. They did not choose to terminate pursuant to the express right under clause 14.3 of the CFA, though they could have.
Winros brought a claim against Global for payment of the value of the services rendered under the CFA, the success fee and other costs. That action was stayed, whilst Global brought proceedings for detailed assessment of Winros’ invoices under section 70 of the Solicitors Act 1974, challenging their alleged liability.
Global’s position in these proceedings was, even though Winros lawfully terminated the CFA, Global Energy was, nevertheless, not liable for the fees because termination had taken place before the conditions to entitlement to payment had arisen under the CFA.
Winros’ position was that there had been a ‘failure of basis’ for unjust enrichment purposes, because they had been deprived of the opportunity of completing performance and earning their fees, including the success fee, as a result of Global’s repudiation.
Decision and Reason
The Court of Appeal agreed with Global. Whilst there was established case-law in England that a claim for unjust enrichment may be more likely to arise where the contract has been wrongfully repudiated, whether it did so was dependent upon the circumstances and the contract itself. There was no legal presumption to this effect.
The general rule, accepted at the highest levels in more recent case-law, should be to uphold the contractual arrangements by which parties have defined and allocated and, to that extent, restricted their mutual obligations.
It was essential to be able first to determine the basis upon which services are rendered, ascertained objectively, before going on to decide whether that basis had failed. Clause 14.3 of the CFA in this case dealt expressly with the circumstances which actually occurred. It set out what would happen if Winros was prevented from completing performance of the CFA. It formed part of the express basis upon which the agreement was performed.
It would not be reasonable on an objective basis to accept Winros’ unjust enrichment claim in the face of the express terms of the CFA which governed the relationship between the parties at the time. An unjust enrichment claim would upset the considered exercise of risk allocation expressly contained the CFA and be contrary to clause 14.3 which dealt precisely with the circumstances which arose. The fact that Winros chose not to avail itself of the remedy available under clause 14.3 did not mean that there was a failure of basis, just that it chose not to exercise the option which clause 14.3 provided.
The net effect of this was that, even though Winros would have had the right to recover monies for their services provided to Global under the CFA, because they chose not to exercise their express right under clause 14 of the same, they were deprived of doing so.
The remedy you are ultimately seeking may determine the right you should exercise and therefore your choices.
Key Takeaways
Here are some of the key lessons we can take from these cases:
1. Contract and account managers should take early legal advice when they have a contractual dispute on their hands, particularly preceding their decision
2. Separate but related, your choices can affect available remedies and therefore you should be clear on your ultimate objective at the time you make your decision, because the right you exercise should be appropriate for the remedy you are seeking
3. Each contract will turn on its own interpretation, but it is possible, depending on your objective, to have restricted yourself to only one sensible option even if you have not limited available rights
4. If you are interested in getting someone else to perform their part of the bargain then, subject to the likelihood of specific performance being available at all depending on the nature of the contract in issue, equity will generally be more flexible when it comes to your own performance following a serious breach of the defaulting party (though you must be ready to perform your side by the date of the final hearing for such an order)
5. Contrary to number 4 above, and subject again to the terms of the contract in your case and the circumstances, if you are seeking compensation for failed future performance after the other party’s serious breach, and which you have not chosen to terminate in response to, then you would be obliged to continue to perform all your own obligations for that remedy to be available
Note: Contract law is a complex area. Nothing in this article constitutes legal advice nor should be relied upon as such by any reader relating to their particular matter. You should seek formal advice surrounding your specific situation.
About the author
Ben McCosker is a Consultant Solicitor Advocate at Setfords with Higher Rights of Audience, accredited in 2023. Called to the Bar in 2009 and cross-qualified as a solicitor in 2013, he can represent clients in all civil courts in England and Wales, up to and including the Supreme Court.
Ben specialises in property dispute resolution, commercial and contract litigation, public law, and privacy claims. Having worked in-house, in consultancy, and at leading law firms, he brings a practical, well-rounded perspective to high-value and complex disputes.
He’s known for combining thorough preparation with a genuine understanding of what clients want to achieve — helping them resolve disputes in the most commercially sensible, cost-effective way possible.
Outside the law, Ben speaks fluent German and has volunteered in church ministry for almost 20 years.
