Giedo Van Der Garde BV & Anor v Force India Formula One Team Ltd

A contractual obligation to provide a stated minimum quantity of services is not reduced merely because a separate, conditional benefit cannot be obtained. Here, the obligation to provide a minimum of 6,000 kilometres was absolute, while Friday-morning testing and reserve-driver status were conditional on obtaining an FIA Super Licence.

A claimant may recover damages measured by the value of services withheld, even without purchasing substitute services or proving consequential financial loss. Restitution for failure of consideration remains subject to total failure, but apportionment may be possible where the relevant contractual performance is severable. A loss-of-chance claim may succeed where the lost opportunity is real and substantial rather than speculative.

The claimants, a racing driver and his management company, contracted with the defendant Formula One team under a Service Agreement and Fee Agreement. The defendant agreed to permit the driver to test, practise or race a Formula One car for a minimum of 6,000 kilometres. It provided 2,004 kilometres and offered a further 266 kilometres at a test which the driver declined.

The defendant argued that the 6,000-kilometre obligation was conditional upon the driver obtaining an FIA Super Licence, participating in Friday-morning sessions, using best endeavours to obtain the licence, and accepting specified testing opportunities. It also relied on an alleged novation, but withdrew that defence. The principal issues were the construction of the Service Agreement, the effect of the driver’s conduct, restitution for failure of consideration, and the appropriate measure of damages.

1. Liability. The defendant breached clause 2 of the Service Agreement. The obligation to provide a minimum of 6,000 kilometres was unqualified. The contractual right to participate in Friday-morning Grand Prix sessions was separately conditional upon the driver holding an FIA Super Licence. The latter condition did not qualify or reduce the former obligation.
2. No obligation on the driver to use best endeavours to obtain a Super Licence could be found by construction. Clause 2 imposed an express best-endeavours obligation on the defendant, but contained no equivalent obligation on the driver. The defendant’s proposed obligation was unnecessary to give the agreement business efficacy and was inconsistent with the absolute kilometre obligation.
3. The driver’s refusal to attend the Paul Ricard test reduced the defendant’s obligation by 266 kilometres, because the contract required him to participate in tests selected by the defendant. His Silverstone crash did not reduce the obligation, since it was not a breach and the defendant’s ability to provide 6,000 kilometres was not dependent on faultless driving.
4. Restitution. Restitution failed. Although the 6,000-kilometre obligation could in principle be apportioned, the single fee also covered contingent Friday testing and reserve-driver status. Those benefits were not merely collateral, and the agreements supplied no workable basis for attributing part of the fee to them. The court nevertheless held that, if the contingent rights could be disregarded, restitution would have been $1,865,000.
5. Damages. The claimants were entitled to damages measured by the value of the 3,730 kilometres and associated benefits withheld. The evidence established a value of at least US$500 per kilometre, producing an award of US$1,865,000. The award did not depend on buying substitute testing elsewhere.
6. The claimants also established a real and substantial, rather than speculative, lost opportunity to obtain future Formula One financial benefits. If the principal damages award had failed, damages for that lost opportunity would have been US$100,000. The court also held that, alternatively, Wrotham Park damages of US$1,865,000 would have been available.