Seatbooker Sales Ltd v Southend United Football Club Ltd

A contract is construed and applied according to the agreement actually made, rather than an earlier contract which the parties agreed to replace. A party cannot rely on termination provisions in the superseded contract. Where a contractual breach has been remedied, it cannot ordinarily justify later acceptance of a repudiation based on that breach. Contractual damages are assessed at the breach date, but the court may take account of later events which show the value of the contractual rights lost.

Seatbooker Sales Ltd claimed damages from Southend United Football Club Ltd for wrongful repudiation of a software sale and licence agreement governing internet ticketing services.

The Club contended that the agreement was not binding, that the parties had merely varied an earlier agreement, and that Seatbooker’s breaches entitled it to terminate. It also brought counterclaims based on alleged contractual breaches, mistake and misrepresentation. The central issues were whether the later agreement was valid and binding, whether the Club had lawfully terminated it, and the proper assessment of damages.

1. Validity and contractual substitution. The evidence established that the parties agreed to enter into a new agreement between the Club and Seatbooker Sales Ltd. The Software Sale & Licence Agreement was therefore valid and binding and replaced the earlier Data Factors agreement. The Club had not entered into it through mistake or misrepresentation.
2. Termination. Since the earlier agreement had been superseded, the Club could not rely on its termination provision, including clause 6.3. The Software Sale & Licence Agreement required remittance of ticket-sale proceeds within 30 days of sale. The alleged three-day payment obligation was unsupported and any early payments made by Seatbooker were matters of goodwill.
3. Alleged breaches. The contractual responsibility for setting ticket prices and related charges rested with the Club under clause 16. The evidence did not establish that Seatbooker had configured the system incorrectly, had advised the Club to use the erroneous maximum transaction charge, or had received coherent earlier notification of the problem. No breach entitling the Club to damages was proved. In any event, the problem had been remedied by July 2005 and could not have justified termination in October 2005.
4. Damages. Applying the principle stated in Golden Strait Corp. v Nippon Yusen Kubishika Kaisha [2007] 2 AC 353, damages were assessed by reference to the value of the contractual benefits lost, while taking account of subsequent events relevant to that value. The court awarded £70,614.65, comprising lost match-ticket commission, lost season-ticket commission and unpaid monthly fees, less saved costs. Interest was to be determined after hearing counsel.
5. The Club’s counterclaims were dismissed.