- Effective cause terms and repudiation defences—effective courses? (EMFC v The Resort Group)
- What are the practical implications of this case?
- What was the background?
- What did the court decide?
- Construction of the contract
- Case details
Commercial analysis: The claimant (EMFC) claimed commission and outstanding payments under a contract with the defendant The Resort Group (TRG) in relation to TRG’s entry into facilities with a third party. At first instance, TRG unsuccessfully argued that EMFC had repudiated the contract so EMFC was entitled to the payments. However, TRG succeeded in showing that EMFC had not been an effective cause of the transaction and was not therefore entitled to the commission. Following cross-appeals by both parties, the Court of Appeal held that EMFC was entitled to both the commission and the outstanding payments. The case involved consideration of contractual construction and implication of terms in the context of effective cause terms, as well as principles of repudiation, and provides some salutary lessons for both transactional lawyers and litigators alike. Written by Jon Felce, partner at PCB Byrne LLP.
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