The owners of the Prince Edward in Holloway (Crown) thought they could turn down beer deliveries from their landlords Inntrepreneur and buy their beer from other suppliers
Topic: Contract
Who: Inntrepreneur Pub Company v East Crown Ltd
When: July 2000
Where: Holloway and Chancery, London
What happened:
The owners of the “Prince Edward” in Holloway (“Crown”) thought they could turn down beer deliveries from their landlords Inntrepreneur and buy their beer from other suppliers, despite their “tied house” agreement of 1996. Why? Because following a Monopolies and Mergers Commission investigation in 1990 into the “pubs for breweries” swap between Grand Metropolitan and Courage, by which Inntrepreneur was formed as a joint venture between the two, the MMC concluded that this was against the public interest. Accordingly Inntrepreneur gave undertakings which included a promise that any ties on pubs remaining in Inntrepreneur’s ownership as of 28/3/98 would be released. So when Crown signed a lease with Inntrepreneur in August 1996, they expected that despite the tied house provisions in the lease, they would be free agents for the purposes of drink supplies come March 1998. Inntrepreneur disagreed and when Crown stopped taking deliveries from Inntrepreneur and went elsewhere, Inntrepreneur sought an injunction preventing them from doing so. The pub combine pointed to a clause in the 1996 lease, which stated that subject to any later variation to it agreed in writing between the parties, the lease “constitutes the entire agreement between the parties.”
This prevented Crown from arguing, they said, that Inntrepreneur had given any collataral warranty, outside the 1996 lease, by way of its 1990 undertakings to the MMC (which in any event it had obtained a release from in 1996). The court agreed with Inntrepreneur and the Crown were injuncted from taking supplies from anybody apart from Inntrepreneur.
Why this matters:
“Entire agreement” clauses may seem like meaningless boilerplate, but this case shows where they can come into their own, preventing a contracting party from using the other party’s past conduct as a basis for arguing that a clause in the contract is no longer binding.
