CA-2024-001949 & CA-2024-001935 - [2025] EWCA Civ 1212

These appeals concern two contracts, a contract for the supply of 80 million face masks and a contract providing for commission to be paid on shipments made under the supply contract. The contracts, both dated 21^st April 2020, were concluded at the height of the Covid 19 pandemic.

The seller had problems meeting the agreed delivery schedule in the supply contract, which eventually led to the buyer purporting to terminate that contract. The seller contended in this action that the buyer’s purported termination was unlawful, with the consequence that the supply contract remained alive for performance. It claimed damages for the buyer’s failure to accept and pay for the goods as and when deliveries fell due. The buyer defended the claim on the basis that it was entitled to terminate the contract; alternatively that it was entitled to rescind the contract for misrepresentation; and that in any event the seller was not in a position to perform the contract and therefore not entitled to damages.

The judge, Mr Nicholas Thompsell, sitting as a Deputy High Court Judge, held that the seller’s claim succeeded, although on a basis for which the seller had not contended, and awarded damages of over US $16 million. The buyer appeals against that award. The seller accepts that the award of damages cannot be supported on the basis of the judge’s reasoning, but contends by a respondent’s notice that the same result should be reached by a different route.

I have concluded that the appeal under the supply contract must be allowed and that the seller’s claim must be dismissed. In short, the seller was not in a position to perform and the buyer was entitled to terminate the contract.

The judge dismissed the claim under the commission contract, holding that commission had not been earned under the terms of that contract. The seller’s agent appeals against that conclusion. However, in circumstances where commission has been paid on all the shipments made under the supply contract and where (contrary to the judge’s view) the buyer was entitled to terminate that contract, no further commission will be payable regardless of the further issues arising in the commission appeal.