Mileform Ltd v Interserve Security Ltd

An alleged oral exclusivity term will not be incorporated into a written commercial agreement where the parties intended the written document to contain their entire agreement and the term was neither communicated as accepted nor adequately defined. An entire agreement clause generally prevents reliance on collateral oral promises or assurances, although oral evidence may explain the parties’ actual roles where the written description is inaccurate. A term is uncertain where the court cannot safely select between materially different meanings. A claim concerning storage services may also be compromised by correspondence objectively understood as settling that claim.

Mileform supplied warehousing, packaging, distribution and storage services to Interserve. The parties signed a written agreement providing for a fixed term until 31 January 2012. Mileform alleged that, alongside the written terms, Interserve had agreed that Mileform would be the exclusive provider of the relevant services for two years.

Interserve subsequently used other distribution and storage arrangements. Mileform claimed damages for breach and terminated the agreement. The central issues were whether an exclusivity term had been agreed and communicated, whether clause 18 excluded reliance on any oral term, whether the alleged term was sufficiently certain, and whether the storage-services claim had been compromised.

1. Claim. Subject to any further submissions concerning a possible residual claim for breach and damages, Mileform’s claim was dismissed.
2. No incorporated exclusivity term. On the facts, there was no oral agreement at the January 2010 meeting. Any approval by Interserve’s senior manager was conditional and was not communicated to Mileform as acceptance. Sending the signed written agreement could not amount to acceptance of an exclusivity term when the agreement retained the express words “non-exclusive distributor”.
3. Entire agreement clause. Alternatively, clause 18 prevented reliance on any collateral oral agreement, term or understanding concerning exclusivity. The written agreement, including its pricing page and appointment clause, objectively covered the Security Products Services and Storage Services. The inaccurate description of Mileform as an independent reseller could be disregarded or explained by oral evidence, but did not justify wholesale disregard of clause 18.
4. The court distinguished J. Evans & Son (Portsmouth) Ltd v Andrea Merzario Ltd because the present parties intended a formal written contract and there was no sufficiently clear assurance or factual basis for a partly oral contract. The principles concerning entire agreement clauses in Inntrepreneur Pub Co v East Crown, North Eastern Properties v Coleman and Ravennavi SpA v New Century Shipbuilding Co Ltd supported that conclusion.
5. Uncertainty. Even if an exclusivity term had been agreed, its scope was unresolved. It was unclear whether it covered storage, First Security’s boxes, direct deliveries, urgent deliveries, all Stocked Products, or competing products. The term would therefore have been too uncertain to bind the parties.
6. Storage services. The correspondence between June and August 2010 compromised all claims concerning the Storage Services, whether based on exclusivity or the fixed term. The agreed £1,500 removal charge supplied consideration for that compromise.
7. Security Products Services. In the absence of exclusivity, clause 2 gave Interserve a contractual right to discontinue product availability and distribution through Mileform on the stated terms. The court left open any separate issue of breach or loss and any consequential quantum argument.