Monthly commercial law update: Top 5 developments in May

Monthly commercial law update: Top 5 developments in May

It's that time of the month again—here are the top 5 commercial law developments from last month (May 2014) taken from Lexis®PSL Commercial.

Competition law: CMA issues guidance on competition law for small businesses

The Competition and Markets Authority (CMA) has published a guide to help small businesses comply with competition law. The guide focuses on protecting small businesses and consumers from anti-competitive behaviour.

The information in the guide provides a basic overview of the law and outlines the steps small businesses can take to comply with the law.

In addition, the CMA has signed a memorandum of understanding with the Serious Fraud Office on the basis on which both bodies will cooperate to investigate and/or prosecute individuals in respect of the criminal cartel offence established by section 188 of the Enterprise Act 2002, where serious or complex fraud is suspected (including price-fixing, limitation of production or supply, market-sharing and bid-rigging).

Contracts: Court of Appeal considers right to terminate for breach or anticipated breach

In Valilas v Januzaj, the Court of Appeal concluded that a dentist had not repudiated a facilities contract by telling the other party that he would be late making payments. The dentist's breach of contract did not constitute repudiation as the other party had retained substantially the whole benefit of the contract.

The agreement was between a dentist and his landlord for hiring the premises for his dental practice. The relationship between the dentist and the landlord began to deteriorate and after several months of non-payment, the landlord excluded the dentist from the premises and terminated the contact. The dentist claimed that the landlord had wrongfully terminated the contract. The landlord claimed that the dentist had committed a repudiatory breach of the contract by failing to pay. At first instance, the court found for the dentist, and the landlord appealed.

The Court of Appeal found that there was no term saying that time for payment was of the essence. Consequently, it was not a condition of the contract that the monthly payments be made on time. As a result, the dentist's failure to pay on time was not a repudiation and so the landlord was not entitled to treat the contract as discharged and terminate it. The parties would have had to have agreed in advance that the time for payments was essential.

The court said that when considering if a breach of contract was serious enough to warrant a right to terminate, the court would need to review several factors, including the nature of the term, the kind and degree of the breach and the consequences of the breach for the injured party. In this case, the breaches by the dentist did not deprive the landlord of substantially the whole benefit of the contract because even though the landlord was deprived of monthly payments, he would eventually obtain what he was entitled to.

Contracts: misrepresentation

In Webster & Ors v Liddington & Ors, the appellants (clinicians) administered skin rejuvenation treatment to the respondents (patients). The product, known as Isolagen, was devised and marketed by Isolagen Europe Ltd.

 The patients claimed that the clinicians committed misrepresentation by adopting statements made by IEL in its brochures that the treatment consisted entirely of a patient’s own cells (rather than material taken from animals or other sources).

In a trial of preliminary issues, the trial judge in the Manchester County Court found that the clinicians were responsible for the statements made in IEL’s brochures. The Court of Appeal dismissed the appeal and upheld the trial judge’s findings.

The case serves as a useful reminder that traders can be held responsible for misrepresentation committed by the manufacturer of a product by sharing the manufacturer’s promotional material with customers.

Data protection: Google and the right to have personal data deleted

There has been a great deal of media attention surrounding the decision in case C-131/12 Google Spain and Google. A request for a preliminary ruling was made in the case between, Google Spain SL and Google Inc. and the Spanish Data Protection Agency and Mr Costeja González (CG) concerning a decision by the Agency upholding the complaint lodged by CG against the two companies and ordering Google Inc. to adopt the measures necessary to withdraw personal data relating to CG from its index and to prevent access to the data in the future.

The Court of Justice of the European Union ruled that article 2(b) and (d) of the Data Protection Directive 95/46/EC meant that, first, the activity of a search engine consisting in finding information published or placed on the internet by third parties, indexing it automatically, storing it temporarily and, finally, making it available to internet users according to a particular order of preference must be classified as 'processing of personal data' within the meaning of article 2(b) when that information contains personal data.

Secondly, it meant that the operator of the search engine must be regarded as the 'controller' in respect of that processing, within the meaning of article 2(d). The Court also found that article 12(b) and subparagraph (a) of the first paragraph of article 14 of the Directive mean that the operator of a search engine is obliged to remove from the list of results displayed following a search made on the basis of a person's name links to web pages, published by third parties and containing information relating to that person. This also applies where that name or information is not erased beforehand or simultaneously from those web pages, and even if its publication in itself on those pages is lawful.

The CJEU indicated that, as the data subject may (in the light of his fundamental rights under articles 7 and 8 of the Charter of Fundamental Rights of the European Union) request that the information in question no longer be made available to the general public on account of its inclusion in such a list of results, those rights override, as a rule, not only the economic interest of the operator of the search engine, but also the interest of the general public in having access to that information upon a search relating to the data subject's name. Although the case affects Google as a search engine provider, it may have a wider application to other service providers.

The Information Commissioner has published a statement welcoming the decision and the extent to which it upholds the rights of individuals and confirms the powers of data protection authorities to enforce them.

Public procurement: Government publishes short form procurement terms

The Crown Commercial Service and the Government Legal Service have developed short form terms and conditions for general goods and services contracts with a value below the procurement thresholds set out in the Public Contracts Regulations 2006.

 The documents are designed to ensure that departments are able to use appropriate and proportionately ‘light touch’ contract terms for low value procurements. This is aimed at avoiding the use of overly complex terms which can increase costs and act as a barrier to the involvement of SMEs in Government procurements.

The documents are not suitable for construction works, for which industry standard forms of contract are available, or for IT contracts for which a suitable framework should normally be used.

Guidance on the use of the documents is included in the introductory notes in each document set.


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