Greenhouse v Paysafe Financial Services Ltd

Contractual interpretation requires an objective and contextual reading of the agreement, with the words used retaining primary importance. Business common sense and contractual purpose may assist, but cannot justify rewriting a bad bargain. Implied terms require satisfaction of the officious bystander or business efficacy tests. A party’s continuation with a contract, despite objecting to a new requirement, does not itself establish variation or promissory estoppel. Promissory estoppel requires a clear and unequivocal promise or representation, which may arise from conduct. A contractual notice must be interpreted objectively; an immediate purported amendment was not a valid notice requiring 60 days. An obligation to provide daily commission reports survived termination where it was ancillary to the continuing obligation to pay commission.

Harry Greenhouse, an affiliate of Neteller, claimed declarations and damages concerning commission under a bespoke affiliate agreement. The liability trial concerned four issues: whether signed consent forms were a contractual prerequisite for reactivating members; whether merchant exclusions could be imposed on an Exclusive VIP account; whether an email amended the agreement on 60 days’ notice; and whether daily reporting survived termination.

The agreement was terminated on 26 October 2014. The court also addressed a conceded multi-currency commission issue. The central questions were whether the alleged requirements arose by interpretation, implication, variation or promissory estoppel, and what contractual obligations continued after termination.

1. Affiliate consent forms. The contractual reference to Neteller’s normal due diligence and customer verification procedures did not encompass the later, abnormal requirement for a signed hard-copy consent form. No such term was implied: the evidence did not satisfy either the officious bystander or business efficacy test. Nor had the parties varied the agreement. Mr Greenhouse’s attempts to comply, while objecting to the requirement, did not amount to agreement. Promissory estoppel also failed because there was no clear and unequivocal promise or representation.
2. Merchant exclusions. The words “any Merchants” in the Exclusive VIP terms excluded merchant exclusions. Mr Greenhouse did not agree to vary that provision, and his decision to continue the agreement rather than terminate it did not constitute variation. Promissory estoppel likewise failed. The exclusions were therefore a breach of contract, with damages to be assessed.
3. Unilateral notice. The 31 July 2014 email was not a valid 60-day notice. Read objectively and contextually, it indicated an immediate change and made an offer concerning other terms. It did not provide the contractually required notice.
4. Daily reporting. The obligation to provide daily reports survived termination because it operated in tandem with the continuing obligation to pay commission on referred members. The use of “Affiliate” rather than “you” did not alter that conclusion, as the agreement used those terms interchangeably.
5. The claimant succeeded on all four issues. Declarations were granted accordingly, including that commission was payable irrespective of the currency account used by a referred member.