Ghanem Al -Thani Holdings WLL v Jaguar Cars Exports Ltd

A contractual right to terminate on notice is not displaced by informal assurances unless those assurances amount to a binding promise or actionable misrepresentation. A statement about a party’s future intention or usual practice may constitute a representation of fact, but it must be proved. Where the alleged assurance is unsupported by contemporaneous documents and conflicts with the written agreement and the commercial probabilities, the court may reject it. Here, the defendant’s representative gave only non-binding reassurance about the circumstances in which termination would usually occur. The contractual termination right remained effective, and the claims in misrepresentation, collateral contract and breach of contract failed.

The claimant, a Qatari Jaguar distributor, sued after the defendant terminated their 1998 distributorship agreement on 12 months’ notice under clause 18.1. The claimant alleged that, before signing, the defendant’s regional manager promised that termination would not occur until the claimant had recovered its investment, or unless it committed a serious breach. It claimed damages for misrepresentation, breach of collateral contract and breach of the agreement, together with an indemnity concerning continuing servicing obligations. The trial concerned liability only. The central issue was what was said at the May 1998 meeting and whether it altered or qualified the defendant’s contractual termination right.

1. Claim dismissed. The court found that the defendant’s representative did not promise that the agreement would not be terminated before the claimant recovered its investment, or that termination would occur only for severe breach.
2. A statement of intention may, in appropriate circumstances, amount to a representation of fact concerning the representor’s state of mind. A statement about usual policy or practice may also be an actionable misrepresentation if untrue. Conversely, an assurance amounting to a commitment about future conduct may constitute a collateral contract. Those principles did not assist the claimant because the alleged statements were not made.
3. The written agreement was the defendant’s standard form, and its representative had no authority or ability to amend it. The evidence established only that he explained the defendant’s usual practice of trying to resolve serious problems rather than terminate. That did not detract from clause 18.1 or give the reassurance contractual force.
4. The court preferred the defendant’s evidence. The claimant’s account was weakened by inconsistencies between its pleaded case, witness statements, later correspondence and oral evidence. There was no side letter, note or contemporary record, and the alleged assurance was not mentioned when termination occurred or in the immediate correspondence afterwards.
5. The claimant would have relied on the assurance if it had been made, but reliance could not establish liability in the absence of a representation or promise. The claim was therefore dismissed, with costs to follow the event absent special circumstances.

First-instance decision. The judgment states that the claim was dismissed.