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Mon August 08 2022

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Just Watch What You Say.......

30 Jul 10 The defendant traded with more than 800 retail stores supplying dining and bedroom furniture. The claimant was one of the defendant's ten national agents, who sued for unlawful termination of the agency agreement.

In October 2006, all the agents were informed that from January 2007, all communications were to be made by Word or e-mail rather than post, paper and faxes. All the agents other than the claimant complied with this despite the defendant’s repeated requests.

By May 2008, the defendant decided to charge the claimant an administration charge of £100 per month for dealing with his paperwork in this way. He was offered training in using Word and e-mail if required. The claimant faxed a letter saying that he would go on a computer course. He had made similar promises previously but had not carried them through. It was this situation which had given rise to the abusive telephone calls which caused the defendant to terminate the claimant’s contract.

The claimant alleged that the agreement was unlawfully terminated when the defendant terminated it with immediate effect on 25 September 2008. The claimant admitted that he had been abusive on the telephone on two occasions, leaving a voice mail and then a direct call to the defendant’s MD. The claimant submitted that he had repented in a faxed letter 6 days later.

The defendant maintained that it had been entitled to terminate the agreement because the claimant’s conduct amounted to a breach of trust and confidence which it could not be expected to tolerate. The breach of contract was not capable of remedy, and even if it were, the claimant had not remedied it by his letter which had not been an apology but a letter of regret and excuse.

As a matter of law, abusive language by an employee towards an employer may amount to a repudiatory breach of contract depending on the circumstances. However, words spoken in the heat of the moment do not always mean that a relationship cannot continue. However, in content and context, they may amount to a repudiatory breach.

In the present case, as in any similar employment contract, the Agent had been under an express duty under Clause 3.1 “to act towards the Principal conscientiously and in good faith” and “any serious breach” of such a term would entitled the Principal to terminate “with immediate effect” under Clause 9.2.1.

In the judge’s view, the content and tone of the telephone calls were personal abuse of the worst kind and amounted to gross insubordination towards the defendant’s Managing Director leading to a breakdown of the necessary personal relationship of trust required between Principal and Agent unless repaired. The claimant made no apology to the defendant’s Managing Director even though given ample opportunity to do so. This conduct was likely to at the least seriously damage the parties’ relationship of trust and confidence. The termination of the agency agreement had been lawful and the claim was dismissed.

Gledhill v Bentley Designs (UK) Ltd.; 2 June 2010

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  • A Sub-Subcontractor's Concurrent Liability in Tort and Contract
  • Did an Arbitrator Consider all the Issues Put to Him?
  • Duty of Care to Avoid Economic Loss and Liability for Consequential Loss Caused by Physical Damage

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