it's about law, contract law on frustration. plz help me. Watch
In the Court of Appeal
Supaprint Plc v Witherton Ltd
In January 2009, Witherton’s, a company that owned a chain of 200 large pubs across the UK, contracted with Supaprint, a commercial printing company, to print 2,000 copies of posters and 5,000 flyers for a new promotional campaign, designed to allow them to compete better against their rivals in times of economic downturn. The posters included details of the chain’s ‘new and improved menu’ and various attached promotions (such as curry night, where customers could get one of a selection of four curries plus a pint of beer for £5.50). The contract price was £250,000 and Supaprint’s logo and web address was to be included in small print on the bottom right hand corner of each poster and flyer. Witherton’s paid £50,000 in advance in order to secure priority over Supaprint’s other commitments.
Before the printing of the posters and flyers was complete, the Government banned all advertising of cheap alcohol promotions. The Government was acting in preparation for the fact that a European Directive requiring EU member states to ban all alcohol advertising was to come into force in 2012, but had brought in this part of the ban three years earlier than expected, following pressure from health campaigners concerned about the impact of ‘binge drinking’. When this happened, Witherton’s contacted Supaprint saying that they no longer wanted the promotional material but Simon Powell, the managing director of the company said that as the print run had started, they had to complete it, and they would then deliver the goods and claim the balance of the contract price. Witherton’s argued that the contract had been discharged and said they wish to recover the £50,000 that they had already paid to Supaprint.
Supaprint completed the work and delivered the posters to Witherton’s head office. They spent £180,000 printing the posters and flyers which now cannot be used for any other purpose. As a result of prioritising Witherton’s work, they also were a week late in completing a lucrative contract for Tenco’s supermarket, with the result that they had to pay a £30,000 liquidated damages penalty.
Supaprint claimed the contract price from Witherton’s, saying that they had been entitled to complete performance and deliver the goods under the principle established in White & Carter (Councils) Ltd v McGregor . They also claimed the additional £30,000, which they said had only been lost as a result of Winterton’s breach.
In the High Court, Lennox J held that:
i) The principle from White & Carter (Councils) Ltd v McGregor did not apply when the contract had already been frustrated. Witherton’s were right to treat the contract as having been discharged by the advertising ban and, as such, were entitled under the Law Reform (Frustrated Contracts) Act 1943 to claim back the £50,000 they had paid up front.
ii) Even if the contract had not been frustrated, Supaprint would not have been entitled to complete the work and deliver the goods, as they had been notified that the goods were no longer required and this situation could not fall into the category of case in which continued performance would be justified. For breach of contract Supaprint could only claim its losses already incurred.
iii) In any case, no claim could be made for the £30,000 as such a loss was special loss, falling under the principle in Victoria Laundry (Windsor) Ltd v Newman Industries Ltd  and was unforeseeable to Witherton’s at the time of contracting.
Supaprint appeals against the findings, arguing:
i) The contract had not been frustrated as, though there had been government action potentially affecting Winterton’s promotional campaign, the posters were not primarily advertising drinks promotions but the new menu, and mere inconvenience or expense could not frustrate a contract, particularly when its commercial purpose still remained. This being the case, Winterton’s had committed an anticipatory breach of contract and Supaprint had been entitled to complete the work and claim the contract price and any resulting losses.
ii) Had the contract been frustrated, Supaprint would not have had to pay back the £50,000 as they had incurred expenses that this sum would not in fact cover.
iii) In the event that this was anticipatory breach, continued performance was justified as Supaprint had a legitimate interest in completing the contract and needed no cooperation from Winterton’s to do so.
iv) The loss of the £30,000 was not too remote given the reason for the payment of the £50,000 up front by Winterton’s.