Elsewhere in Newsfeed we report on the claim by the Spice Girls’ loan-out company (“SGL”) for unpaid fees under an endorsement contract with AWS, the service arm of Italian scooter maker Aprilia.
Topic: Contract
Who: Spice Girls Ltd (“SGL”)and Aprilia World Service BV (“AWS”)
When: June 2000
Where: High Court, London
What happened:
Elsewhere in Newsfeed we report on the claim by the Spice Girls’ loan-out company (“SGL”) for unpaid fees under an endorsement contract with AWS, the service arm of Italian scooter maker Aprilia. This had been triggered by Ginger’s departure from the group but ended in the court upholding AWS’s counterclaim for damages for misrepresentation. The court then got down to the business of assessing the damages to be awarded. The case started with a claim by SGL for the fees AWS failed to pay, and backfired when AWS counterclaimed £414, 267 damages for misrepresentation. In the end the court awarded SGL precisely nothing and AWS only £39,699. How come?
A large part of the AWS claim related to alleged lost sales and wasted expenses on marketing material featuring the five Spices rendered useless after Ginger’s departure. All these, however were sustained by Aprilia, AWS’s parent company, and Aprilia was a separate legal entity and not a party to the SGL contract. It might still have been possible for AWS to recover these sums from SGL if AWS had had a contract with Aprilia obliging AWS to indemnify Aprilia in respect of expenses and losses sustained a s a result of the SGL/AWS contract. This was not the case, however, hence the limited award.
Why this matters:
If the AWS/SGL contract had been signed after 10th May 2000, when the Contracts (Rights of Third Parties) Act 1999 came into full force, then the outcome might have been very different. As reported in the “Just Law” section of the Preview folder of this site, this statute gives third parties the right to enforce contracts they have not signed if the contract purports to confer a benefit on them. Despite this, while we are still unclear about the exact way in which the new statute will work when it comes to claims by third parties for damages for breach of the contract , prudent draftsmen on the purchasing side might decide, on a failsafe basis, to have the contract signed by all the parties who are going to sustain direct losses as a result of any breach by the talent.
