Burntcopper Ltd (t/a Contemporary Design Unit) v International Travel Catering Association Ltd

A contractual escape clause referring to unforeseen circumstances must be given its ordinary meaning in the context of the agreement as a whole. “Unforeseen” means not foreseen by either party; it is not the same as reasonably unforeseeable. A clause will not be construed to excuse an intentional breach where the relevant event was already within the parties’ contemplation.

A trade show identified as belonging to one contracting party does not ordinarily include a substantially similar event later owned by a third party. An implied term cannot be inserted merely because it would be commercially convenient, particularly where it would contradict the express allocation of termination rights.

Burntcopper Ltd (t/a Contemporary Design Unit) had provided exhibition contractor management services to International Travel Catering Association Ltd for many years. Their 2011 contract covered annual trade shows from 2012 to 2016 and included a clause stating that the contract would not be enforced for a year in which, owing to unforeseen circumstances, the trade show was cancelled or did not take place.

Four months after the contract was signed, ITCA sold its European event business and trade show to Reed Exhibitions. CDU claimed breach of contract. ITCA relied on clause 16 and, alternatively, pleaded rectification, an oral or collateral contract, estoppel, waiver, an implied termination term and other defences. CDU also advanced pleaded misrepresentation and quantum meruit claims. The central issues were the construction and application of clause 16 and whether the alternative defences succeeded.

1. Clause 16. The clause was to be read as a whole. “Unforeseen circumstances” applied to both the cancellation and non-occurrence alternatives. The suggested construction, under which a trade show need not take place for any reason, was unnatural and commercially unjustified. “Unforeseen” meant circumstances not foreseen by either party, rather than circumstances which were objectively unforeseeable. The sale to Reed was plainly within ITCA’s contemplation when the contract was made, so clause 16 did not apply.
2. Identity of the trade show. The contractual reference to the ITCA Trade Show meant the show for which CDU was to provide services to ITCA. It did not include a show owned by a third party, even if the purchaser retained goodwill, branding or elements of the original event.
3. Alternative contractual defences. Rectification, the alleged oral agreement, collateral contract and estoppel-based defences failed on the factual findings concerning the February 2011 conversation. An implied term permitting ITCA to terminate on sale of the event business was rejected. The proposed term was not necessary, was not obvious, and would substantially undermine the express termination provisions. The relevant inquiry was what the contract, read as a whole against the background, would reasonably be understood to mean.
4. Misrepresentation. The pleaded misrepresentation claim failed. The commercial relationship and long duration of the parties’ dealings did not create a general duty to disclose possible threats or opportunities. However, as an additional observation, once ITCA chose to give a reason for inserting clause 16, it was required to give a truthful reason. A claim based on the misleading explanation would probably have succeeded.
5. CDU’s claim succeeded because clause 16 did not apply and ITCA’s alternative defences failed. The pleaded misrepresentation claim failed. The quantum meruit claim would probably also have succeeded, but it was unnecessary to determine it.