Verdict Vanguards

LCLS SOUTH INTRA MOOT COURT COMPETITION 2024

To the Honorable Supreme Court

Between

James Harrison Shaw

(Applicant)

Hobbs Anderson
(Respondent)

Memorial of the Applicant

1
 Table of contents

Index of Authorities………………………………………………………………………….3
Table of Abbreviation
5
Statement of Jurisdiction
Summary of facts
Grounds for the appeal
Statement of purpose
Pleading Advance
1. WHETHER MR. SHAW HAD FAILED TO PROVIDE CONSIDERATION IN
EXCHANGE FOR MR. HOBBS' PROMISE TO PAY 1 MILLION IF HE SOLD
100,000 WRENCHES……………………………………………………………………9

i. Mr. Shaw fulfilled his best endeavours requirement (A) and went over and
above the requirement. …………………………………………………………9
ii. Mr. Shaw did provide a consideration by giving a practical benefit to Mr.
Hobbs and obviated from disbenefit………………………………………….12
iii. Mr. Hobbs gave a indemnity promise to Mr. Shaw for his obligation,
(a)indemnity, (b) restitution (c) loss of amenity as Shaws reputation as a
seller is damaged. ………………………………………………………………14

2
 Index of Authorities

A-Attwood v Small (1838) 6 CI & F 232

Avon Insurance plc v Swrie Faser Ltd [2000] 1 All ER (comm) 573

B-Brikom Investments Ltd v Car ([1979] Q.B. 467, CA (Eng)

Business Environment Bow Lane Ltd v Deanwater Estates Ltd [2007] EWCA Civ 622

C- Canadian Pacific Railway Company v. Fleming (1893) 22 SCR 33

Commercial Banking Co of Sydney Ltd v R H Brown & Co [1972]HCA 24

D- Davenport v The Queen (Queensland) Privy Council

Day Morris Associates v Voyce [2003] EWCA Civ 189

E- Eastwalsh Homes Ltd v Anatal Developments Ltd 1990 Carswell 532(CA)

Edgington v Fitzmaurice (1885) 24 Ch D 459

EE LTD v Virgin Mobilf Ltd (above) of para [44]

Entores v Miles Far East Corp [1955] 2 QB 327

Esso Petroleum v Mardon [1976] QB 801

F- Felthouse v Bindley [1862] EWHC CP J35

G- Gibson v Manchester City Council [1979] UKHL 6

H- Hartley v Ponsonby [1857] 7 EL BL 872; 119 ER 1471

Hyde v Wrench [1840] EWHC Ch J90

I-IBM United Kingdom Limited v Rockware Glass Limited CA [1980] FSR 335

J- Junior v Veitchi and Co Ltd [1983] 1 AC 520

M- McInerny v Lloyds Bank Ltd [1974] 1 Lloyd’s Rep 246;

Museprime Properties v Adhill properties [1990] 36 EG 114
MWB Business Exchange Centres Ltd [2018] UKSC 24

N- Nordenfelt v Maxim Nordenfelt Guns and Ammunition Co Ltd [1894] AC 535

North Eastern Properties Ltd v Coleman & Quinn Conveyancing [2010] EWCA Civ 277
3
 Northamber Plc v Genee World Ltd & Ors [2020] EWHC 31

P- Pao On v. Lau Yiu Long [1979] UKPC 17

R- Rolls-Royce Holdings Plc v Goodrich Corporation [2023] EWHC 1637

Rust v Abbey Assurance company. [1969]
Ruxley Electronics v Forsyth [1996] AC 344

S- Sheffield District Railway v Great Central Railway (1911) 27 T.L.R. 451

Stilk v Myrick (1809) 170 ER 1168

T- Terrell v. Mabie Todd & Coy. Ld. para-45

U- UK Learning Academy Ltd v Secretary of State for Education [2020] EWCA Civ 370

V- Various Claimants v. Catholic Child Welfare Society [2012] UKSC 56

Vitol SA v Beta Renowable SA [2017] EWHC

W- White Arrow Express Ltd v Lamey's Distribution Ltd [1996] Trading LR 69

Williams v Roffey Bros & Nicholls (Contractors) Ltd [1989] EWCA Civ 5

Y- Yam Seng Ptd Ltd v International Trade Corp Ltd [2013] EWHC 111 (QB) at [177]-[185].

4
 Table of Abbreviation

NOM- No Oral Modification

ITCLR- Intention to Create Legal Relationship
UKSC- United Kingdom
EWHC
QB
CH-
LJ

Statement of Jurisdiction

5
The honourable Supreme Court has established its jurisdiction under Article 40(2)
Constitutional Reform Act 2005, which states,
“An appeal lies to the court from any order or judgment of the Court of Appeal in England and
Wales in Civil Proceeding”
Then the court have the jurisdiction to decide the subject matter under section 12 to 16 of
Administration of Justice Act 1969. Therefore, It is respectfully submitted that the Supreme
Court has jurisdiction in the present subject matter.

Summary of Facts

6
Mr. Hobbs and Mr. Shaw went in to an agreement back in 2018. According to the agreement,
Mr. Shaw was obliged to provide “Best Endeavours” in terms of selling wrenches. The
agreement also concluded with an exclusivity clause where Mr. Shaw couldn’t have any other
supplier except Mr. Hobbs and also the 5.3 clause obliged the parties that any variation to the
original agreement needs to be in writing and signed by both parties.

On new year eve, Mr. Shaw and Mr. Hobbs met at a pub and was mere discussing about their
business. Due to the decline of wrench sells, Mr. Hobbs was just telling Mr. Shaw that if he is
able to sell 100,000 wrenches, he will get a bonus of £1000,000 but they didn’t form any written
agreement and the wrenches was supposed to sell with in a year.

In the mean time, Mr. Shaw went in to a supply agreement with Mr. Coleman in breach of the
exclusivity clause. Due to the overwhelming flow of wrenches, Mr. Shaw bought an incomplete
warehouse in a highly humid area and requested Mr. Hobbs to refurbish and repair the
warehouse. Mr. Hobbs asked “ Precision Builders” to complete the task. Precision Builders
needed to change the flooring material for which they sent a mail and the mail was forwarded to
Mr. Shaw. Mr. Shaw agreed to change the materials.

In the mean time, Mr. Hobbs had to pay £3000 for Mr. Shaw as Mr. Shaw didn’t have enough
money to complete the task. Mr. Hobbs was kind enough to help him with it. After a few days
after seeing foreseeable risks yet Mr. Shaw didn’t take any step to mitigate the damage of the
warehouse and thus when a flood came it made the warehouse unusable. Nor did Mr. Shaw have
any consideration to Mr. Hobbs but he also breached the agreement.

Grounds for the appeal

7
Statement of purpose

8
 Pleading Advanced

1. WHETHER MR. SHAW HAD FAILED TO PROVIDE CONSIDERATION IN

EXCHANGE FOR MR. HOBBS' PROMISE TO PAY 1 MILLION IF HE SOLD 100,000
WRENCHES:

The High Court made an error in distinguishing this case with William v Roffey brothers and
MWB v Rock advertisement in concluding that Mr. Shaw did not provide any practical benefit or
consideration.

We submit that [i] Mr. Shaw went over and above the “best endeavor” requirement. [ii] Mr.
Shaw did provide a consideration and he gave a practical benefit or obviated a disbenefit to Mr
Hobbs. Also, [iii] Mr Hobbs gave an indemnity promise regarding against the No Oral
Modification clause.

[i] Mr. Shaw fulfilled his best endeavours requirement (A) and went over and above the
requirement. (B)

(A) Mr. Shaw fulfilled his best endeavours requirement

The term best endeavours is frequently utilized in commercial contracts. Various terms
commonly used include best endeavours, all reasonable endeavours, reasonable endeavours, best
efforts, and reasonable efforts. best endeavours would require a party to “take all those steps in
their power which are capable of producing the desired results”1

1
IBM United Kingdom Limited v Rockware Glass Limited CA [1980] FSR 335

9
In the case of Sheffield District Railway Company v Greater Central Railway Company (1911)2,
the court stated that best endeavor means “a service provider is obligated to complete all the
steps available to try to achieve the objective”.

Here, Mr. Shaw took all the necessary steps in his power to fulfil the variation of the agreement.
As a managing director Mr. Shaw is responsible for sales, marketing and distribution efforts,
ensuring profitability and market expansion. To sell 100,000 wrenches in a year Mr. Shaw
dedicated all available resources to support the promotion and distribution of wrench products,
invested in marketing and hired a sizable team of salespersons.Also added wearchouse facilities
despite not having sufficient fund.

(B) Mr Shaw went over and above the best endeavour requirement.

(B) Mr. Shaw went over and above the requirement of best endeavours by overstepping the
reasonable limit to achieve the object. In the case of Sheffield District Railway Company v
Greater Central Railway Company (1911), the court stated to prove best endeavours do not
mean that one has to “overstep the limits of reason” and the court phrased that what is ‘over
steeping the reasonable limit’ which is:

1. No need to sacrifice a specific interest for its own.

2. No need to replace or sway away its own traders to the competing routes.

Mr. Shaw terminated relationships with other suppliers to prompt Mr. Hobb’s business.3 By
making this decision Mr. Shaw gave up a specific interest or benefit. When someone promises to
do their ‘best endeavours’ under a contract. They don't have to put themselves in financial

2
Sheffield District Railway v Great Central Railway (1911) 27 T.L.R. 451

3
Page2-para 5

10
trouble or harm themselves just to satisfy the other party's interests.4 They "do not mean that the
a party must so conduct its business as to offend its traders "and drive them to competing routes.
Mr. Shaw repeled his own suppliers to the competing routes. which brings financial trouble in
his business. Here, It is overstepping the reasonable limits of best endeavour requirement.

Also, in the case of Terrell v Mabie Todd & Coy LTD. (1952), It is stated that in order to fulfill
the ‘best endeavors’ obligation, a party must pay expenses, while it is also free to look at its own
financial circumstances. Thus, it seems reasonable that a business with more resources would
have to do more than one with less. Means a party does not have to jeopardize its own financial
circumstances in order to provide best endeavours.
Here, how much Mr. Shaw can expand his business depends on his resources, but he did not
have enough resources to run his business. Mr. Shaw exhausted all his financial limits. During
the refurbishment of the warehouse, he couldn’t even provide a mere 2000 pounds and had to
rely on the funding of Mr. Hobbs. He pushed his limits despite having the lack of resources
The standard of ‘reasonableness’ is that of a reasonable managing director acting properly in the
interests of his company and applying his mind to his contractual obligations to exploit the
inventions.5 The facts show that Mr. Shaw managed the business despite the lack of resources,
so the effort he gave was unreasonable and did over and above his original contractual
obligation.

In the case of Hartley v Ponsonby(1857),6 the court distinguished this case by finding that the
promise was enforceable because the promisee were fulfilling duties that went beyond their
initial contractual obligations.Going over and above is itself a consideration. So, even if Mr.
Shaw did not provide any practical benefit still it will be considered as a consideration for doing
over and above. It is important to note that Mr. Shaw sold 102,000 wrenches, he sold 2000
wrenches more than his contract. So he provided enough consideration in his contractual
obligation.

4
Eastwalsh Homes Ltd v Anatal Developments Ltd 1990 Carswell 532(CA)
5
Terrell v. Mabie Todd & Coy. Ld. para-45
6
Hartley v Ponsonby [1857] 7 EL BL 872; 119 ER 1471

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[ii] Mr. Shaw did provide a consideration by giving a practical benefit to Mr. Hobbs and
obviated from disbenefit.

The case of William v Roffey bros & Nicholls 1991 (COA decision)7 supports the above-
mentioned statement.

There is a general rule by the case of Stilk v Myric(1809)8, which says when a promisee does
something under a contract obligation, the promisee can not use the performance of the promise
as a consideration for a contractual variation or a new contract.
But In this case of William v Roffey bros & Nicholls9 , it was held that performance of an
exciting duty owed to the promisor could constitute good consideration if the promiser gained a
practical benefit. Gildewell LJ established five requirements for the doctrine of practical benefit
to be applicable.

Here, Mr. Hobbs obtained a certain practical benefit. Which fulfilled all 5 requirements for the
doctrine of practical benefit given by Glidewell LJ:

‘(i) f A has entered into a contract with B to do work for, or to supply goods or services to, B in
return for payment by B: Mr. Hobbs entered into a for years of contract with Mr. Shaw sold
chromium vanadium alloy steel wrenches and Mr.Shaw committed to sell as many wrenches as
possible by earning 12% commission from the profits.

(ii) at some stage before A has completely performed his obligations under the contract B has
reason to doubt whether A will, or will not be able to, complete his side of the bargain: A year
after their contract Mr. Hobbs had reason to doubt whether Mr.Shaw will not be able to sell
enough wrenches to make the business profitable.

(iii) B thereupon promises A an additional payment in return for A’s promise to perform his

7
Williams v Roffey Bros & Nicholls (Contractors) Ltd [1989] EWCA Civ 5
8
Stilk v Myrick (1809) 170 ER 1168
9
Ibid

12
contractual obligations on time; Mr. Hobbs promises to give 1 million bonus if Mr. Shaw could
achieve 100,000 wrenches by next calendar year.

(iv) as a result of giving his promise, B obtains in practice a benefit, or obviates a disbenefit:
Mr.Shaw was able to sell 100,000 as per the contract and Mr.Shaw was economically viable for
the wrenche sells. Also Mr.Hobbs was about to leave his wrenche business but for the
profitability of the wrenche business which was ensured by Mr. Shaw, Mr. Hobbs no longer
needs to close the business. Here, Mr. Hobbs obtained it by a disbenefit.

(v) B’s promise is not given as a result of economic duress or fraud on the part of A: Mr.Shaw
did not commit any economic duress or fraud.

Mr. Shaw's other actions, including investing in marketing, and hiring a dedicated sales team, all
constitute valuable consideration in exchange for Mr. Hobbs' promise. and the failure to
recognize Mr. Shaw's consideration was a grave error of law. Which established he gave enough
consideration.

[iii] Mr. Hobbs gave a indemnity promise to Mr. Shaw for his obligation, (a)indemnity, (b)
restitution (c) loss of amenity as Shaws reputation as a seller is damaged.

In the case of Canadian Pacific Railway Co. v. London & Scottish Assurance Corporation
(1925)10, Lord Buckmaster defined an indemnity contract as follows:
"An indemnity is a promise by one party to keep the other harmless against loss which the latter
may sustain by reason of some act or conduct of the former or by some act of some third
person."

Here, Mr.Hobbs gave a indemnity promise and assurance to Mr. Shaw that he will give 1
million pounds for 100,000 wrench sales. Mr. Shaw fulfilled all his duties, sacrificed his own
commercial interest and achieved the task relying on Mr.Hobbs promise. Mr.hobbs non-payment
10
Canadian Pacific Railway Company v. Fleming (1893) 22 SCR 33

13
is loss of amenity for Mr. Shaw.
By not giving Shaw his Entitled £1 million for going over and above is not only a breach of the
initial agreement, but also a breach of the Indemnity Clause. Hobbs is obliged not to rely on the
class 5.3 under the indemnity clause. Which makes sure entitled for the money.
(b) demant restitution wun just enrichment of the defendant at the expense of the claimant.
hobbs er enrichment hoise; agei prove korsi by proving practical benefit. at shaw er expense ei
hoise, agei prove korsi he went over and above. (best arguement)

© Loss of amenity refers to the reduction or deprivation of one's ability to enjoy or derive
satisfaction from the normal aspects of life due to injury, harm, or other adverse circumstances.11
In the case of Ruxley Electronics v Forsyth [1996]12, Lord Mustill states that in cases where a
contract is designed to fulfill a purely commercial purpose the loss will normally consist of only
monetary detriment. Detriment can take various forms, such as the loss of reputation, time,
money, or other valuable resources. Mr. Shaw has incurred a loss or suffered a disadvantage that
would not have happened had the contract not been entered into. Here, Mr.Hobbs sold inferior
quality wrenches as well that can damage the reputation as seller.
Mr. Hobbs breached the indemnity promise and for that Mr.Shaw faced loss of amenity. Mr.
Hobbs will be liable for the breach of contractual variation and damage for loss of amenity.

Pleading 2 shaw

Mr. Hobbs can not rely on the clause 5.3 to argue that the oral agreement was unenforceable as
(a) The oral agreement was followed by a conduct (b) The NOM clause should be ineffective (c)
There had been a Doctrine Of Equitable Estoppel (d) The oral agreement is a new agreement and
not a variation of the previous contract and (e) Internationally no-oral modification clause
doesn’t have a formal effect.

(a)The oral agreement was followed by a conduct

11
Ruxley Electronics v Forsyth [1996] AC 344
12
ibid

14
 I. A "no oral modification" clause is a common business practice that included in contracts to
require that any changes to the contract be made in writing and signed by all parties involved.
From the statement facts, it’s clear that Mr. Shaw has acted according to the oral promise of Mr.
Hobbs. He didn’t just made conduct but he also worked over and above and did everything
possible even at the cost of his own financial situation just to safeguard Mr. Hobbs. From the
judgments of Rock Advertising Ltd v MWB Business Exchange Centres Ltd [2018] UKSC 2413
the judges were on the fact that “The law does give effect to the provisions of the party has acted
according to the oral agreement and the court will found that the parties had agreed to modify the
agreement orally, despite the presence of the no oral modification clause.”

So it’s clear that Mr. Shaw has worked according to the oral agreement and thus the NOM clause
should not be invoked.

(II) Mr. Shaw has acted in reliance to the oral agreement. Not only Mr.Shaw just didn’t give up
other suppliers but he also hired a new sales team to complete the oral agreement and bought a
new warehouse so that he can complete the target and get the bonus amount. According to the
case of Rolls Royce Holding PLC and Goodrich Corp 202214 “One party can not rely on the no
oral modification clause if the other party has relied on the oral modification and acted according
to it”

As Mr. Shaw acted according to the oral agreement so Mr. Shaw can not rely on the NOM
clause.

(b) The No Oral Modification clause should be unenforceable

(I) Mr. Shaw made Mr. Hobbs aware regarding the NOM clause as part of his duty and they had
a discussion between the parties regarding the No Oral Modification Clause. From the facts, it’s
clear that Mr. Shaw did ask Mr. Hobbs regarding the NOM clause while going for the oral
agreement and Mr. Hobbs gave his words to him that the NOM clause won’t be a issue in
between their agreement. According to MWB Business Exchange Centres LTD v Rock

13
MWB Business Exchange Centres Ltd [2018] UKSC 24
14
Rolls-Royce Holdings Plc v Goodrich Corporation [2023] EWHC 1637

15
Advertising LTD-201815 when the parties act in a non compliance manner by discussing and
reach a agreement , the oral agreement is at least at the conceptual level no more or less effective
than simply including a NOM clause in the contract.

As there had been a discussion between the parties the oral agreement is completely enforceable.

(II) The oral agreement didn’t create any misunderstanding between the parties. The parties were
completely aware of their contractual duties and Mr. Shaw acted upon it. Even, the oral
agreement didn’t do anything radically different from the previous agreement. According to
MWB Business Exchange Centres LTD V Rock Advertising LTD (above) one of the reasons of
including a NOM clause is to avoid misunderstandings between the parties.
As there is no misunderstanding between the NOM clause should be ineffective.

(III) The oral variation was completely relied upon by Mr. Shaw. Where one party clearly rely
upon the other, this indicative that the statement was intended to be a term. Esso petroleum v
Mardon.16 As Mr. Shaw relied upon the statement the oral variation was a term and as being a
term it can not be excluded by a NOM clause .

(C) Mr. Hobbs should estopped from relying on clause 5.3

(I) There had been an express promise or representation on which Mr. Shaw has relied. From the
facts, it’s clear that Mr. Hobbs did a proper and express representation regarding the requirement
of £1000,000 bonus against of selling 100,000 wrenches. According to the case of Brikom
Investments LTD v Car -197917 Lord Denning brushed aside an entire clause believing that “ the
cases are legion where a clause should be of no effect where an express promise and
representation had been made” and according to the case of UK learning academy V Secretary
of State For education 202018 where there had been a representation the other is estopped from
relying on the NOM clause.

15
ibid
16
Esso Petroleum v Mardon [1976] QB 801
17
Brikom Investments Ltd v Car ([1979] Q.B. 467, CA (Eng)
18
UK Learning Academy Ltd v Secretary of State for Education [2020] EWCA Civ 370

16
So as there had been a representation or promise Mr. Hobbs is estopped from relying on the
NOM clause.

(II) Mr. Hobbs has provided indemnity to Mr. Shaw. According to the facts Mr. Hobbs has given
assurance to Mr. Shaw that no matter what happens Mr. Shaw will paid for his conduct.
According to the case of Pao On V Lau Yiu Long (1980)19 as there had been an indemnity
promise, the price should pay in accordance with the indemnity.

As Mr. Hobbs has provided express promise or representations and indemnity promise to Mr.
Shaw, he should be estopped from relying on the 5.3 clause.

(d). The oral agreement is completely a new agreement.

(I) The collateral agreement is an agreement and is supported by its own consideration. Not
only Mr. Shaw has given new consideration for the oral agreement but also there had been a
totally new circumstance in regards of dealing where they meet to discuss the agreement.
According to the cases of Business Environment Bow Lane LTD and Dean Water Estates LTD
-200720 and North Eastern Properties LTD21 and Coleman -2010 “ the oral agreement is capable
of operating as an independent agreement and if it’s supported by it’s own consideration the
most standard forms of entire agreement clause will not prevent it’s enforcement”

So, as the oral agreement is totally a new agreement and it is supported by its own consideration,
5.3 clause can not stop its enforcement.

( e ). International NOM clauses does not always have a legal effect. The reasons advanced
in the case law for disregarding them are entirely conceptual. The argument is that it is
19
Pao On v. Lau Yiu Long [1979] UKPC 17

20
Business Environment Bow Lane Ltd v Deanwater Estates Ltd [2007] EWCA Civ 622
21
North Eastern Properties Ltd v Coleman & Quinn Conveyancing [2010] EWCA Civ 277

17
conceptually impossible for the parties to agree not to vary their contract by word of mouth
because any such agreement would automatically be destroyed upon their doing so. The
difficulty about this is that if it is conceptually impossible, then it cannot be done, short of an
overriding rule of law (presumably statutory) requiring writing as a condition of formal validity.
Yet it is plain that it can. There are legal systems which have squared this particular circle. They
impose no formal requirements for the validity of a commercial contract, and yet give effect to
No Oral Modification clauses. The Vienna Convention on Contracts for the International Sale of
Goods (1980) has been ratified by 89 states, not including the United Kingdom. It provides by art
11 that a contract of sale “need not be concluded in or evidenced by writing and is not subject to
any other requirement as to form.” Nonetheless, art 29(2) provides: “A contract in writing which
contains a provision requiring any modification or termination by agreement to be in writing may
not be otherwise modified or terminated by agreement. However, a party may be precluded by
his conduct from asserting such a provision to the extent that the other party has relied on that
conduct.” Similarly, art 1.2 of the UNIDROIT Principles of International Commercial Contracts,
4th ed (2016), provides that “nothing in these Principles requires a contract, statement or any
other act to be made in or evidenced by a particular form.” Yet art 2.1.18 provides that “A
contract in writing which contains a clause requiring any modification or termination by
agreement to be in a particular form may not be otherwise modified or terminated. However, a
party may be precluded by its conduct from asserting such a clause to the extent that the other
party has reasonably acted in reliance on that conduct. “These widely used codes suggest that
there is no conceptual inconsistency between a general rule allowing contracts to be made
informally and a specific rule that effect will be given to a contract requiring writing for a
variation.

So, it’s clear that Mr. Hobbs shouldn’t be included with the authority to reply on the 5.3 clause.

Pleading iii: Shaw

[A]- Mr. Shaw does not need to pay any damage to Mr. Hobbs, as (a) does not provide any
specific relief or damage for the breach of that clause. (b) the exclusivity clause Mr. Hobbs is

18
relying on is unfair, (c) Mr. Shaw was going through economic complications, (d) The damage is
not linked with the breach

1. In business contracts, an exclusivity clause typically grants one party the exclusive right to
provide certain goods or services to another party within a specified scope, such as a particular
geographic area, industry sector, or for a defined period. The earliest example regarding
exclusivity clause can be found in the case of Nordenfelt v. Maxim, Nordenfelt Guns and
Ammunition Co. [1894].22
There had been no specific damage or relief for the breach of the exclusivity clause. In EE LTD
v Virgin Mobile LTD(2023),23 English and Wales Kings Bench Division, Mrs. Justice Joanna
Smith DBE in her judgment affirmed on the para [100] that “ {manufacturer}EE contends that
On VM’s interpretation of clause 34.5 {exclusivity clause} ,’ EE would have no remedy at all’
for VM’s breach of the exclusivity clause, depriving it of all contractual force and turning it in to
a mere statement of intent. So, in this regard Mr. Hobbs is not entitled to any kind of relief or
damages while relying on the exclusivity clause.

(b) The exclusivity clause is unfair;

(I) A vertical relationship in a business contracts are a relationship that typically

describes that one party has a dominating position in the agreement than the other
party such manufacturers and distributors. From the facts provided, Hobbs oversees
the overall operation and growth initiative of the business while Mr. Shaw was just
there for mere implementation which establishes Mr. Hobbs position in this contract
as a dominant party.

Under the Competition Act 1998, article 1 provision 2(1)(b) Ss.2(b) and Ss2(d) provides that the
dominant party can not impose any restriction that completely cuts off the competition or
investment or finance for the other party.

22
Nordenfelt v Maxim Nordenfelt Guns and Ammunition Co Ltd [1894] AC 535
23
EE Ltd v Virgin Telecoms Ltd [2023] EWHC 1989 (TCC).

19
And from the Competition Act’s Vertical Agreement Block Exemption order 2022 confirms
under S.8 it’s provided that dominating party cannot impose such restriction which turns out to
be a hardcore restricting in manner of concluding the party with only one supplier or source of
goods. So, it clear that the clause was unfair in regards of Competition Act 1998.

From the above-mentioned discussion, it’s clear that not only the clause was ambiguous due to it
is unclear nature regarding damages or reliefs but the clause was also a clear abuse of dominant
position in the agreement and thus the clause shouldn’t even stand in the contract.

(II) From the facts another thing is clear that regarding the Exclusivity Clause, the clause was
unilaterally decided by Mr. Hobbs whole Mr. Shaw just implemented it rather than having an
independent discussion on it. We should also look upon the recent Court Of Justice of European
Union (CJEU)’s decision between Unilever and The Italian Competition Authority, where CJEU
ruled that,
“where exclusivity clauses are applied via distribution network, the distributors use of such
clauses should be imputed to the dominant company if the clauses were unilaterally decided by
the dominant company and simply implemented through its distributors, rather than being
independently adopted by them.” So, it’s totally certain that the clause wasn’t just unfair but it’s
also had been a showcase of abuse of a dominant position.

(c) Mr, Shaw was also going through economic complications. The exclusivity clause puts an
obligation to have Mr. Hobbs as his sole supplier. As,Mr. Shaw was completely dependent for
his business to Mr. Hobbs when Mr. Hobbs went through a loss due to the overwhelming
decking in wrench sale Mr. Shaw had terrific effect to his business and was going through a loss.
From the decision of Northamber PLC v Genee World Ltd and other-202224 in EWHC
Chancery Division, Judge Rawlings sitting as High Court Judge stated that “In any event

24
Northamber Plc v Genee World Ltd & Ors [2020] EWHC 31

20
supplying resellers in the UK in order to survive, the distributors can have other suppliers, even
if such supplies did constitute a breach of exclusivity clause”
As due to the abusing nature of the clause Mr. Shaw was at the verge of losing his business it
was justifiable for him to go for other suppliers to survive.

(d) The damage is not linked with the breach;

(I) It’s clear from the fact that Mr. Hobbs hadn’t went through any loss due to Mr. Shaw having
another supplier and as as Mr. Hobbs suffered no loss there is no legal cause for Mr. Hobbs to
ask for damages.Even Mr. Shaw went over and above to make sure that Mr. Hobbs doesn’t face
any loss. From the decision in EE LTD v Virgin Mobilf Ltd (above) of para [44],25 “ I am
fortified in this view by the decision of Leggatt J (as he then was) in Yam Seng Ptd Ltd v
International Trade Corp Ltd [2013] EWHC 111 (QB) at [177]-[185].26

As Leggatt J explained, a claimant is not entitled to damages for breach of an exclusivity

obligation on the expectation measure if it cannot “prove what profit it would have made or
indeed that it would have made a profit at all if [the party in breach] had fully performed its
obligations under the agreement”. _ BOSS LINE

A claim for “loss of revenue” that does not give credit for the costs incurred by the claimant so
as to reflect only the claimant's loss of profit plainly falls foul of the expectation measure and the
overriding compensatory principle.”
Mr. Hobbs had suffered no loss due to any breach even if it happened as his wrenches had been
sold and Mr. Shaw has helped him to recover in business so Mr. Hobbs isn’t entitled to any kind
of Damages.

(II) The damage isn’t identifiable. Even if any breach happened to the exclusivity clause there is
no evidence that Mr. Hobbs had suffered any loss. In Lord Bingham’s decision in White Arrow
Express LTD V Lamey’s Distribution LTD [1996]27 he stated that, “ The Robinson v Harman

25
EE LTD v Virgin Mobilf Ltd (above) of para [44]
26
Yam Seng Ptd Ltd v International Trade Corp Ltd [2013] EWHC 111 (QB) at [177]-[185].
27
White Arrow Express Ltd v Lamey's Distribution Ltd [1996] Trading LR 69

21
formulation assumes that the breach has injured the party’s financial position; if he can not show
that it had, he will recover nominal damage only” There has been no evidence that Mr. Hobbs
has faced any loss or had any adverse financial effect due to the decision of Mr. Shaw and it’s
clear that it had no financial effect as Mr. Shaw completed his duty to sell 100,000 wrenches so
there had been no damage faced by Mr. Hobbs.

(III)There was no communication regarding the breach of the exclusivity clause. Even if any
breach happened, Mr. Hobbs had a duty to communicate regarding the breach From the facts, it’s
clear that Mr. Hobbs did not communicate with Mr. Shaw regarding the issues. In the case of
Vitol SA v Beta Renowable SA [2017]28 Lord Steyn in his judgment conveyed that the innocent
party must communicate his decision to the party in breach and the communication must clearly
and unequivocally convey to the repudiating party.

As. Mr. Hobbs did not communicate he is not entitled to damages.

Mr. Hobbs also affirmed the contract. From the facts, it’s clear that Mr. Hobbs waited for Mr.
Shaw to finish the variation of the contract, which shows that Mr. Hobbs accepted further
performance of the contract and has affirmed the contract. According to the case of, Davenport v
The Queen-1877,29 “An innocent party who accepts further performance after the breach of the
contract, held there by to have affirmed the contract.”

Pleading 4:

The high court gave judgment by saying Mr. Hobbs does not have to pay damages to Mr. Shaw
in relation to the warehouse repairs. We submit that. [i] there was no acceptance of the offer of
making the floor with inferior material [ii] There was misrepresentation regarding the material of
the floorings. [iii] There was tort of negligence. (IV) Obligations that arises under the Sales Of
Goods Act 1979
28
Vitol SA v Beta Renowable SA [2017] EWHC
29
Davenport v The Queen (Queensland) Privy Council

22
[i] Mr. Shaw never accepted the offer of making the floor with inferior material.

Acceptance is the final and unqualified expression of assent to terms proposed by the offeror.30
Acceptance should follow the ‘mirror image rule’, as there needs to be a mirror image
acceptance of the offer. An acceptance must exactly match all the terms offered.31 Mr. Shaw did
not accept the offer of making the floor with the inferior material.
The general rule is that acceptance of an offer will not be implied from the mere silence on the
part of the offeree.32 Though silence can be a form of acceptance in this matter. One can accept
the offer by remaining silent but the offeror has to mention that he is accepting the offer by the
conduct of the offeree for being silent.33 But there was no conduct form Mr. Shaw. In the general
rule acceptance can be made by conduct.
It must be demonstrated that the offree acted with the objectively judged intention of accepting
the offer for the activity to be considered an acceptance.34 Here, Mr. Shaw was not clear about
the changes because Mr. Shaw relied on the representation of precision Builders. Even if Mr.
Shaw accepts through conduct, it can not be valid acceptance because there was a
misrepresentation by Mr. Hobbs.

Also, there was no communication for the acceptance. mere mental assent is not sufficient.35 The
offeree is assenting to an offer in his mind only and not communicated it to the offeror.

[ii] There was misrepresentation regarding the material of the floorings.

Misrepresentation is a false statement of fact, which is addressed to the party misled, whilst not
being a term of a contract, which is material and induces the other party to enter the contract and
it was relied upon. to consider a misrepresentation it should fulfill all the requirements of a
misrepresentation:

30
Hyde v Wrench [1840] EWHC Ch J90
31
Gibson v Manchester City Council [1979] UKHL 6
32
Felthouse v Bindley [1862] EWHC CP J35
33
Rust v Abbey Assurance company. [1969]
34
Day Morris Associates v Voyce [2003] EWCA Civ 189
35
Entores v Miles Far East Corp [1955] 2 QB 327

23
(a) firstly. there has to be an unambiguous statement of fact which was false.36 This false
statement must be material, meaning it influences the decision of the other party, and the other
party must reasonably rely on it. Here, the false statement was that precision builders assured
that the use of urethane-based flooring does not compromise on quality or durability.
(b) secondly, after establishing the dispute statement it must be shown the statement was
addressed to the party misled indirectly. It can be addressed by the representator to a third party
with intention that it be passed on to the claimant.37 here, Precision builders was the representor
and Mr. Hobbs acted as an agent who passed it to Mr. Shaw.

( c) There was an inducement which will lead representee to enter into the contract. The false
statement Induced Mr. Shaw to enter into the contract. Also, the misrepresentation had
materiality and there was a reliance.38 There will be no reliance if the representee does not reply
on the misrepresentation but on his own judgment or investigation.39 But even if the claimant has
investigated, partial reliance on misrepresentation is sufficient.40
(d) There is no general duty to check a representation, Here, one of the technicians informed Mr.
Shaw of the slight abrasions seen on the flooring but the investigation happened after the
flooring was made and Mr. Shaw was already induced by the misrepresentation. So, there was
partial reliance.
The misrepresentation caused loss to Mr. Shaw because he will not be able to store any wrenches
for his business. Although there was a frustrating event for the destruction, but the damages of
the flooring could have been prevented if Precision Builders did not compromise the quality and
durability of the flooring.

Thus far we have proved that there has been a misrepresentation from Precision Builders and Mr.
Hobbs acted as an agent for Precision Builders. Now, Whether Mr. Hobbs is innocent or not; the
burden of proof for innocence is on Mr. Hobbs. Even if Hobbs proves that it was an innocent

McInerny v Lloyds Bank Ltd [1974] 1 Lloyd’s Rep 246; Avon Insurance plc v
36

Swrie Faser Ltd [2000] 1 All ER (comm) 573

37
Commercial Banking Co of Sydney Ltd v R H Brown & Co [1972]HCA 24
38
Museprime Properties v Adhill properties [1990] 36 EG 114
39
Attwood v Small (1838) 6 CI & F 232
40
Edgington v Fitzmaurice (1885) 24 Ch D 459

24
misrepresentation from him as had “reasonable grounds to believe and did believe up to the time
the contract made that the facts represented were true” Mr. Hobbs would still be liable for
rescission under this case. Since a major alliteration has happened with the flooring after the
flood, rescission is not possible.
Now, Mr. Shaw will get rescission or damages in “lieu of rescission” under section 2(2) of
misrepresentation act 1967. The right to rescind the contract may be lost in accordance with the
section 2(2) of the misrepresentation act 1967 if the court decides to grant the claimant damages
rather than withdraw the contract. Court try to give some logical option in this section.
In the case of Willam Sindall v Cambridge county council, the Court of Appeal found that if
there had been an innocent misrepresentation, damages would have been granted rather than the
contract being terminated under section 2(2).
So, Mr. Shaw damages will be awarded rather than the contract being canceled.

[iii] There was tort of negligence.

The tort of negligence holds people or organizations liable for harm they cause by not taking
reasonable care. When someone breaks a duty of care they owe another person and causes harm
or damage that could have been avoided, this is called negligence.

The following elements will establish the claim of negligence:

Duty of Care: The duty can be owed to class or person. here, Mr. Hobbs and Precision builders
owed a duty of care to Mr.Shaw . A duty of care is a legal requirement to act reasonably in order
to avoid causing harm to others. In the case of, Junior v Veitchi and Co[1983],41 the House of
Lords ruled that the defendant was liable for negligent misstatement and breach of duty of care in
the installation of a concrete floor. The court held that even though there was no direct contract
between claimant and defendant, the defendant owed a duty of care as it was reasonably
foreseeable that claimant would rely on defendants expertise in the installation of the floor.

also, The judgment in Donoghue v Stevenson (1932),the court held that defendant, owed a duty

41
Junior v Veitchi and Co Ltd [1983] 1 AC 520

25
of care to claimant as a consumer of their product. This duty required defendant to take
reasonable care to ensure that their product was safe for consumption. This judgment established
the principle of negligence in the tort of negligence and had significant implications for product
liability and consumer protection laws.
here, Mr. Shaw was entitled to succeed in an action in tort because of the extremely close
relationship between Mr. Hobbs and Precision Builders. The crucial elements in the relationship
appear to be firstly, the fact that Mr. Shaw relied upon the skills of precision builders to do the
work and secondly, the fact that Mr. Hobbs assumed a responsibility towards Mr. Shaw because
of the structure of the contract.

Breach of Duty: Precision builders breached that duty by failing to act as a reasonably prudent
person. Where, Precision Builder used low quality material and there was a misrepresentation
from Precision Builders and Mr.Shaw [ii] This breach involved an action or a failure to act when
there was a duty to do so.

Causation: The breached caused the damage and it is a legal causation. The harm was a
reasonably foreseeable consequence of Precision Builders’ actions. Because Precision Builders
were experts and they know that the location of the warehouse in a humid town and low-quality
material will not be sufficient for the flooring. In the case of Esso Petroleum Co Ltd v Mardon
[1976],42 The court found in favor of claimant, holding that the defendant had a duty of care to
provide accurate information and had breached this duty by providing misleading estimates.
Since warehouse flooring material was not durable which caused the damage. And Mr. Shaw
will not be able to use the warehouse in future for the damage. The warehouse has been
commercially unusable.

Mr. Hobbs is vicariously liable for Precision Builders damage. Because Mr. Hobbs haired
Precision Builders. In the case of Various Claimants v. Catholic Child Welfare Society [2012],43
The Supreme Court clarified that in certain circumstances, such as where a special relationship
exists between the parties or where there is an assumption of responsibility, an entity may be

42
Esso Petroleum v Mardon [1976] QB 801
43
Various Claimants v. Catholic Child Welfare Society [2012] UKSC 56

26
vicariously liable for the negligence of another party, even if there is no direct employment
relationship.

(IV) According to the Section 14(2) of the Sales Of Goods Act 1979 where the seller sells
goods in the course of a business, there is an implied condition that the good supply under the
contract are of satisfactory quality. From the facts, it’s clear that the flooring material weren’t of
satisfactory quality because of which the abrasions started seeing with in a few weeks. Thus,
Precision Builders breached the Sales Of Goods Act 1979.

Damages: here, Mr. Shaw suffered actual damages as a result of the Precision builders and Mr.
Hobbs breach of duty. These damages can include property damage of the warehouse,
commercial loss, and or emotional distress for not being able to continue to use the warehouse.

27
28
29
1. WHETHER MR. SHAW HAD FAILED TO PROVIDE CONSIDERATION IN
EXCHANGE FOR MR. HOBBS' PROMISE TO PAY 1 MILLION IF HE SOLD 100,000
WRENCHES:

The High Court made an error in distinguishing this case with William v Roffey brothers and
MWB v Rock advertisement in concluding that Mr. Shaw did not provide any practical benefit or
consideration.

We submit that [i] Mr. Shaw went over and above the “best endeavor” requirement. [ii] Mr.
Shaw did provide a consideration and he gave a practical benefit or obviated a disbenefit to Mr
Hobbs. Also, [iii] Mr Hobbs gave an indemnity promise regarding against the No Oral
Modification clause.

[i] Mr. Shaw fulfilled his best endeavours requirement (A) and went over and above the
requirement. (B)

(A) Mr. Shaw fulfilled his best endeavours requirement

The term best endeavours is frequently utilized in commercial contracts. Various terms
commonly used include best endeavours, all reasonable endeavours, reasonable endeavours, best
efforts, and reasonable efforts. best endeavours would require a party to “take all those steps in
their power which are capable of producing the desired results”44

44
IBM United Kingdom Limited v Rockware Glass Limited CA [1980] FSR 335

30
In the case of Sheffield District Railway Company v Greater Central Railway Company (1911)45,
the court stated that best endeavor means “a service provider is obligated to complete all the
steps available to try to achieve the objective”.

Here, Mr. Shaw took all the necessary steps in his power to fulfil the variation of the agreement.
As a managing director Mr. Shaw is responsible for sales, marketing and distribution efforts,
ensuring profitability and market expansion. To sell 100,000 wrenches in a year Mr. Shaw
dedicated all available resources to support the promotion and distribution of wrench products,
invested in marketing and hired a sizable team of salespersons.Also added wearchouse facilities
despite not having sufficient fund.

(B) Mr Shaw went over and above the best endeavour requirement.

(B) Mr. Shaw went over and above the requirement of best endeavours by overstepping the
reasonable limit to achieve the object. In the case of Sheffield District Railway Company v
Greater Central Railway Company (1911), the court stated to prove best endeavours do not
mean that one has to “overstep the limits of reason” and the court phrased that what is ‘over
steeping the reasonable limit’ which is:

1. No need to sacrifice a specific interest for its own.

2. No need to replace or sway away its own traders to the competing routes.

Mr. Shaw terminated relationships with other suppliers to prompt Mr. Hobb’s business.46 By
making this decision Mr. Shaw gave up a specific interest or benefit. When someone promises to
do their ‘best endeavours’ under a contract. They don't have to put themselves in financial

45
Sheffield District Railway v Great Central Railway (1911) 27 T.L.R. 451

46
Page2-para 5

31
trouble or harm themselves just to satisfy the other party's interests.47 They "do not mean that the
a party must so conduct its business as to offend its traders "and drive them to competing routes.
Mr. Shaw repeled his own suppliers to the competing routes. which brings financial trouble in
his business. Here, It is overstepping the reasonable limits of best endeavour requirement.

Also, in the case of Terrell v Mabie Todd & Coy LTD. (1952), It is stated that in order to fulfill
the ‘best endeavors’ obligation, a party must pay expenses, while it is also free to look at its own
financial circumstances. Thus, it seems reasonable that a business with more resources would
have to do more than one with less. Means a party does not have to jeopardize its own financial
circumstances in order to provide best endeavours.
Here, how much Mr. Shaw can expand his business depends on his resources, but he did not
have enough resources to run his business. Mr. Shaw exhausted all his financial limits. During
the refurbishment of the warehouse, he couldn’t even provide a mere 2000 pounds and had to
rely on the funding of Mr. Hobbs. He pushed his limits despite having the lack of resources
The standard of ‘reasonableness’ is that of a reasonable managing director acting properly in the
interests of his company and applying his mind to his contractual obligations to exploit the
inventions.48 The facts show that Mr. Shaw managed the business despite the lack of resources,
so the effort he gave was unreasonable and did over and above his original contractual
obligation.

In the case of Hartley v Ponsonby(1857),49 the court distinguished this case by finding that the
promise was enforceable because the promisee were fulfilling duties that went beyond their
initial contractual obligations.Going over and above is itself a consideration. So, even if Mr.
Shaw did not provide any practical benefit still it will be considered as a consideration for doing
over and above. It is important to note that Mr. Shaw sold 102,000 wrenches, he sold 2000
wrenches more than his contract. So he provided enough consideration in his contractual
obligation.

47
Eastwalsh Homes Ltd v Anatal Developments Ltd 1990 Carswell 532(CA)
48
Terrell v. Mabie Todd & Coy. Ld. para-45
49
Hartley v Ponsonby [1857] 7 EL BL 872; 119 ER 1471

32
[ii] Mr. Shaw did provide a consideration by giving a practical benefit to Mr. Hobbs and
obviated from disbenefit.

The case of William v Roffey bros & Nicholls 1991 (COA decision)50 supports the above-
mentioned statement.

There is a general rule by the case of Stilk v Myric(1809)51, which says when a promisee does
something under a contract obligation, the promisee can not use the performance of the promise
as a consideration for a contractual variation or a new contract.
But In this case of William v Roffey bros & Nicholls52 , it was held that performance of an
exciting duty owed to the promisor could constitute good consideration if the promiser gained a
practical benefit. Gildewell LJ established five requirements for the doctrine of practical benefit
to be applicable.

Here, Mr. Hobbs obtained a certain practical benefit. Which fulfilled all 5 requirements for the
doctrine of practical benefit given by Glidewell LJ:

‘(i) f A has entered into a contract with B to do work for, or to supply goods or services to, B in
return for payment by B: Mr. Hobbs entered into a for years of contract with Mr. Shaw sold
chromium vanadium alloy steel wrenches and Mr.Shaw committed to sell as many wrenches as
possible by earning 12% commission from the profits.

(ii) at some stage before A has completely performed his obligations under the contract B has
reason to doubt whether A will, or will not be able to, complete his side of the bargain: A year
after their contract Mr. Hobbs had reason to doubt whether Mr.Shaw will not be able to sell
enough wrenches to make the business profitable.

(iii) B thereupon promises A an additional payment in return for A’s promise to perform his

50
Williams v Roffey Bros & Nicholls (Contractors) Ltd [1989] EWCA Civ 5
51
Stilk v Myrick (1809) 170 ER 1168
52
Ibid

33
contractual obligations on time; Mr. Hobbs promises to give 1 million bonus if Mr. Shaw could
achieve 100,000 wrenches by next calendar year.

(iv) as a result of giving his promise, B obtains in practice a benefit, or obviates a disbenefit:
Mr.Shaw was able to sell 100,000 as per the contract and Mr.Shaw was economically viable for
the wrenche sells. Also Mr.Hobbs was about to leave his wrenche business but for the
profitability of the wrenche business which was ensured by Mr. Shaw, Mr. Hobbs no longer
needs to close the business. Here, Mr. Hobbs obtained it by a disbenefit.

(v) B’s promise is not given as a result of economic duress or fraud on the part of A: Mr.Shaw
did not commit any economic duress or fraud.

Mr. Shaw's other actions, including investing in marketing, and hiring a dedicated sales team, all
constitute valuable consideration in exchange for Mr. Hobbs' promise. and the failure to
recognize Mr. Shaw's consideration was a grave error of law. Which established he gave enough
consideration.

[iii] Mr. Hobbs gave a indemnity promise to Mr. Shaw for his obligation, (a)indemnity, (b)
restitution (c) loss of amenity as Shaws reputation as a seller is damaged.

In the case of Canadian Pacific Railway Co. v. London & Scottish Assurance Corporation
(1925)53, Lord Buckmaster defined an indemnity contract as follows:
"An indemnity is a promise by one party to keep the other harmless against loss which the latter
may sustain by reason of some act or conduct of the former or by some act of some third
person."

Here, Mr.Hobbs gave a indemnity promise and assurance to Mr. Shaw that he will give 1
million pounds for 100,000 wrench sales. Mr. Shaw fulfilled all his duties, sacrificed his own
commercial interest and achieved the task relying on Mr.Hobbs promise. Mr.hobbs non-payment
53
Canadian Pacific Railway Company v. Fleming (1893) 22 SCR 33

34
is loss of amenity for Mr. Shaw.
By not giving Shaw his Entitled £1 million for going over and above is not only a breach of the
initial agreement, but also a breach of the Indemnity Clause. Hobbs is obliged not to rely on the
class 5.3 under the indemnity clause. Which makes sure entitled for the money.
(b) demant restitution wun just enrichment of the defendant at the expense of the claimant.
hobbs er enrichment hoise; agei prove korsi by proving practical benefit. at shaw er expense ei
hoise, agei prove korsi he went over and above. (best arguement)

© Loss of amenity refers to the reduction or deprivation of one's ability to enjoy or derive
satisfaction from the normal aspects of life due to injury, harm, or other adverse circumstances.54
In the case of Ruxley Electronics v Forsyth [1996]55, Lord Mustill states that in cases where a
contract is designed to fulfill a purely commercial purpose the loss will normally consist of only
monetary detriment. Detriment can take various forms, such as the loss of reputation, time,
money, or other valuable resources. Mr. Shaw has incurred a loss or suffered a disadvantage that
would not have happened had the contract not been entered into. Here, Mr.Hobbs sold inferior
quality wrenches as well that can damage the reputation as seller.
Mr. Hobbs breached the indemnity promise and for that Mr.Shaw faced loss of amenity. Mr.
Hobbs will be liable for the breach of contractual variation and damage for loss of amenity.

Pleading 2 shaw

Mr. Hobbs can not rely on the clause 5.3 to argue that the oral agreement was unenforceable as
(a) The oral agreement was followed by a conduct (b) The NOM clause should be ineffective (c)
There had been a Doctrine Of Equitable Estoppel (d) The oral agreement is a new agreement and
not a variation of the previous contract and (e) Internationally no-oral modification clause
doesn’t have a formal effect.

(a)The oral agreement was followed by a conduct

54
Ruxley Electronics v Forsyth [1996] AC 344
55
ibid

35
 I. A "no oral modification" clause is a common business practice that included in contracts to
require that any changes to the contract be made in writing and signed by all parties involved.
From the statement facts, it’s clear that Mr. Shaw has acted according to the oral promise of Mr.
Hobbs. He didn’t just made conduct but he also worked over and above and did everything
possible even at the cost of his own financial situation just to safeguard Mr. Hobbs. From the
judgments of Rock Advertising Ltd v MWB Business Exchange Centres Ltd [2018] UKSC 2456
the judges were on the fact that “The law does give effect to the provisions of the party has acted
according to the oral agreement and the court will found that the parties had agreed to modify the
agreement orally, despite the presence of the no oral modification clause.”

So it’s clear that Mr. Shaw has worked according to the oral agreement and thus the NOM clause
should not be invoked.

(II) Mr. Shaw has acted in reliance to the oral agreement. Not only Mr.Shaw just didn’t give up
other suppliers but he also hired a new sales team to complete the oral agreement and bought a
new warehouse so that he can complete the target and get the bonus amount. According to the
case of Rolls Royce Holding PLC and Goodrich Corp 202257 “One party can not rely on the no
oral modification clause if the other party has relied on the oral modification and acted according
to it”

As Mr. Shaw acted according to the oral agreement so Mr. Shaw can not rely on the NOM
clause.

(b) The No Oral Modification clause should be unenforceable

(I) Mr. Shaw made Mr. Hobbs aware regarding the NOM clause as part of his duty and they had
a discussion between the parties regarding the No Oral Modification Clause. From the facts, it’s
clear that Mr. Shaw did ask Mr. Hobbs regarding the NOM clause while going for the oral
agreement and Mr. Hobbs gave his words to him that the NOM clause won’t be a issue in
between their agreement. According to MWB Business Exchange Centres LTD v Rock

56
MWB Business Exchange Centres Ltd [2018] UKSC 24
57
Rolls-Royce Holdings Plc v Goodrich Corporation [2023] EWHC 1637

36
Advertising LTD-201858 when the parties act in a non compliance manner by discussing and
reach a agreement , the oral agreement is at least at the conceptual level no more or less effective
than simply including a NOM clause in the contract.

As there had been a discussion between the parties the oral agreement is completely enforceable.

(II) The oral agreement didn’t create any misunderstanding between the parties. The parties were
completely aware of their contractual duties and Mr. Shaw acted upon it. Even, the oral
agreement didn’t do anything radically different from the previous agreement. According to
MWB Business Exchange Centres LTD V Rock Advertising LTD (above) one of the reasons of
including a NOM clause is to avoid misunderstandings between the parties.
As there is no misunderstanding between the NOM clause should be ineffective.

(III) The oral variation was completely relied upon by Mr. Shaw. Where one party clearly rely
upon the other, this indicative that the statement was intended to be a term. Esso petroleum v
Mardon.59 As Mr. Shaw relied upon the statement the oral variation was a term and as being a
term it can not be excluded by a NOM clause .

(C) Mr. Hobbs should estopped from relying on clause 5.3

(I) There had been an express promise or representation on which Mr. Shaw has relied. From the
facts, it’s clear that Mr. Hobbs did a proper and express representation regarding the requirement
of £1000,000 bonus against of selling 100,000 wrenches. According to the case of Brikom
Investments LTD v Car -197960 Lord Denning brushed aside an entire clause believing that “ the
cases are legion where a clause should be of no effect where an express promise and
representation had been made” and according to the case of UK learning academy V Secretary
of State For education 202061 where there had been a representation the other is estopped from
relying on the NOM clause.

58
ibid
59
Esso Petroleum v Mardon [1976] QB 801
60
Brikom Investments Ltd v Car ([1979] Q.B. 467, CA (Eng)
61
UK Learning Academy Ltd v Secretary of State for Education [2020] EWCA Civ 370

37
So as there had been a representation or promise Mr. Hobbs is estopped from relying on the
NOM clause.

(II) Mr. Hobbs has provided indemnity to Mr. Shaw. According to the facts Mr. Hobbs has given
assurance to Mr. Shaw that no matter what happens Mr. Shaw will paid for his conduct.
According to the case of Pao On V Lau Yiu Long (1980)62 as there had been an indemnity
promise, the price should pay in accordance with the indemnity.

As Mr. Hobbs has provided express promise or representations and indemnity promise to Mr.
Shaw, he should be estopped from relying on the 5.3 clause.

(d). The oral agreement is completely a new agreement.

(I) The collateral agreement is an agreement and is supported by its own consideration. Not
only Mr. Shaw has given new consideration for the oral agreement but also there had been a
totally new circumstance in regards of dealing where they meet to discuss the agreement.
According to the cases of Business Environment Bow Lane LTD and Dean Water Estates LTD
-200763 and North Eastern Properties LTD64 and Coleman -2010 “ the oral agreement is capable
of operating as an independent agreement and if it’s supported by it’s own consideration the
most standard forms of entire agreement clause will not prevent it’s enforcement”

So, as the oral agreement is totally a new agreement and it is supported by its own consideration,
5.3 clause can not stop its enforcement.

( e ). International NOM clauses does not always have a legal effect. The reasons advanced
in the case law for disregarding them are entirely conceptual. The argument is that it is
62
Pao On v. Lau Yiu Long [1979] UKPC 17

63
Business Environment Bow Lane Ltd v Deanwater Estates Ltd [2007] EWCA Civ 622
64
North Eastern Properties Ltd v Coleman & Quinn Conveyancing [2010] EWCA Civ 277

38
conceptually impossible for the parties to agree not to vary their contract by word of mouth
because any such agreement would automatically be destroyed upon their doing so. The
difficulty about this is that if it is conceptually impossible, then it cannot be done, short of an
overriding rule of law (presumably statutory) requiring writing as a condition of formal validity.
Yet it is plain that it can. There are legal systems which have squared this particular circle. They
impose no formal requirements for the validity of a commercial contract, and yet give effect to
No Oral Modification clauses. The Vienna Convention on Contracts for the International Sale of
Goods (1980) has been ratified by 89 states, not including the United Kingdom. It provides by art
11 that a contract of sale “need not be concluded in or evidenced by writing and is not subject to
any other requirement as to form.” Nonetheless, art 29(2) provides: “A contract in writing which
contains a provision requiring any modification or termination by agreement to be in writing may
not be otherwise modified or terminated by agreement. However, a party may be precluded by
his conduct from asserting such a provision to the extent that the other party has relied on that
conduct.” Similarly, art 1.2 of the UNIDROIT Principles of International Commercial Contracts,
4th ed (2016), provides that “nothing in these Principles requires a contract, statement or any
other act to be made in or evidenced by a particular form.” Yet art 2.1.18 provides that “A
contract in writing which contains a clause requiring any modification or termination by
agreement to be in a particular form may not be otherwise modified or terminated. However, a
party may be precluded by its conduct from asserting such a clause to the extent that the other
party has reasonably acted in reliance on that conduct. “These widely used codes suggest that
there is no conceptual inconsistency between a general rule allowing contracts to be made
informally and a specific rule that effect will be given to a contract requiring writing for a
variation.

So, it’s clear that Mr. Hobbs shouldn’t be included with the authority to reply on the 5.3 clause.

Pleading iii: Shaw

[A]- Mr. Shaw does not need to pay any damage to Mr. Hobbs, as (a) does not provide any
specific relief or damage for the breach of that clause. (b) the exclusivity clause Mr. Hobbs is

39
relying on is unfair, (c) Mr. Shaw was going through economic complications, (d) The damage is
not linked with the breach

1. In business contracts, an exclusivity clause typically grants one party the exclusive right to
provide certain goods or services to another party within a specified scope, such as a particular
geographic area, industry sector, or for a defined period. The earliest example regarding
exclusivity clause can be found in the case of Nordenfelt v. Maxim, Nordenfelt Guns and
Ammunition Co. [1894].65
There had been no specific damage or relief for the breach of the exclusivity clause. In EE LTD
v Virgin Mobile LTD(2023),66 English and Wales Kings Bench Division, Mrs. Justice Joanna
Smith DBE in her judgment affirmed on the para [100] that “ {manufacturer}EE contends that
On VM’s interpretation of clause 34.5 {exclusivity clause} ,’ EE would have no remedy at all’
for VM’s breach of the exclusivity clause, depriving it of all contractual force and turning it in to
a mere statement of intent. So, in this regard Mr. Hobbs is not entitled to any kind of relief or
damages while relying on the exclusivity clause.

(b) The exclusivity clause is unfair;

(II) A vertical relationship in a business contracts are a relationship that typically

describes that one party has a dominating position in the agreement than the other
party such manufacturers and distributors. From the facts provided, Hobbs oversees
the overall operation and growth initiative of the business while Mr. Shaw was just
there for mere implementation which establishes Mr. Hobbs position in this contract
as a dominant party.

Under the Competition Act 1998, article 1 provision 2(1)(b) Ss.2(b) and Ss2(d) provides that the
dominant party can not impose any restriction that completely cuts off the competition or
investment or finance for the other party.

65
Nordenfelt v Maxim Nordenfelt Guns and Ammunition Co Ltd [1894] AC 535
66
EE Ltd v Virgin Telecoms Ltd [2023] EWHC 1989 (TCC).

40
And from the Competition Act’s Vertical Agreement Block Exemption order 2022 confirms
under S.8 it’s provided that dominating party cannot impose such restriction which turns out to
be a hardcore restricting in manner of concluding the party with only one supplier or source of
goods. So, it clear that the clause was unfair in regards of Competition Act 1998.

From the above-mentioned discussion, it’s clear that not only the clause was ambiguous due to it
is unclear nature regarding damages or reliefs but the clause was also a clear abuse of dominant
position in the agreement and thus the clause shouldn’t even stand in the contract.

(II) From the facts another thing is clear that regarding the Exclusivity Clause, the clause was
unilaterally decided by Mr. Hobbs whole Mr. Shaw just implemented it rather than having an
independent discussion on it. We should also look upon the recent Court Of Justice of European
Union (CJEU)’s decision between Unilever and The Italian Competition Authority, where CJEU
ruled that,
“where exclusivity clauses are applied via distribution network, the distributors use of such
clauses should be imputed to the dominant company if the clauses were unilaterally decided by
the dominant company and simply implemented through its distributors, rather than being
independently adopted by them.” So, it’s totally certain that the clause wasn’t just unfair but it’s
also had been a showcase of abuse of a dominant position.

(c) Mr, Shaw was also going through economic complications. The exclusivity clause puts an
obligation to have Mr. Hobbs as his sole supplier. As,Mr. Shaw was completely dependent for
his business to Mr. Hobbs when Mr. Hobbs went through a loss due to the overwhelming
decking in wrench sale Mr. Shaw had terrific effect to his business and was going through a loss.
From the decision of Northamber PLC v Genee World Ltd and other-202267 in EWHC
Chancery Division, Judge Rawlings sitting as High Court Judge stated that “In any event

67
Northamber Plc v Genee World Ltd & Ors [2020] EWHC 31

41
supplying resellers in the UK in order to survive, the distributors can have other suppliers, even
if such supplies did constitute a breach of exclusivity clause”
As due to the abusing nature of the clause Mr. Shaw was at the verge of losing his business it
was justifiable for him to go for other suppliers to survive.

(d) The damage is not linked with the breach;

(I) It’s clear from the fact that Mr. Hobbs hadn’t went through any loss due to Mr. Shaw having
another supplier and as as Mr. Hobbs suffered no loss there is no legal cause for Mr. Hobbs to
ask for damages.Even Mr. Shaw went over and above to make sure that Mr. Hobbs doesn’t face
any loss. From the decision in EE LTD v Virgin Mobilf Ltd (above) of para [44],68 “ I am
fortified in this view by the decision of Leggatt J (as he then was) in Yam Seng Ptd Ltd v
International Trade Corp Ltd [2013] EWHC 111 (QB) at [177]-[185].69

As Leggatt J explained, a claimant is not entitled to damages for breach of an exclusivity

obligation on the expectation measure if it cannot “prove what profit it would have made or
indeed that it would have made a profit at all if [the party in breach] had fully performed its
obligations under the agreement”. _ BOSS LINE

A claim for “loss of revenue” that does not give credit for the costs incurred by the claimant so
as to reflect only the claimant's loss of profit plainly falls foul of the expectation measure and the
overriding compensatory principle.”
Mr. Hobbs had suffered no loss due to any breach even if it happened as his wrenches had been
sold and Mr. Shaw has helped him to recover in business so Mr. Hobbs isn’t entitled to any kind
of Damages.

(II) The damage isn’t identifiable. Even if any breach happened to the exclusivity clause there is
no evidence that Mr. Hobbs had suffered any loss. In Lord Bingham’s decision in White Arrow
Express LTD V Lamey’s Distribution LTD [1996]70 he stated that, “ The Robinson v Harman

68
EE LTD v Virgin Mobilf Ltd (above) of para [44]
69
Yam Seng Ptd Ltd v International Trade Corp Ltd [2013] EWHC 111 (QB) at [177]-[185].
70
White Arrow Express Ltd v Lamey's Distribution Ltd [1996] Trading LR 69

42
formulation assumes that the breach has injured the party’s financial position; if he can not show
that it had, he will recover nominal damage only” There has been no evidence that Mr. Hobbs
has faced any loss or had any adverse financial effect due to the decision of Mr. Shaw and it’s
clear that it had no financial effect as Mr. Shaw completed his duty to sell 100,000 wrenches so
there had been no damage faced by Mr. Hobbs.

(III)There was no communication regarding the breach of the exclusivity clause. Even if any
breach happened, Mr. Hobbs had a duty to communicate regarding the breach From the facts, it’s
clear that Mr. Hobbs did not communicate with Mr. Shaw regarding the issues. In the case of
Vitol SA v Beta Renowable SA [2017]71 Lord Steyn in his judgment conveyed that the innocent
party must communicate his decision to the party in breach and the communication must clearly
and unequivocally convey to the repudiating party.

As. Mr. Hobbs did not communicate he is not entitled to damages.

Mr. Hobbs also affirmed the contract. From the facts, it’s clear that Mr. Hobbs waited for Mr.
Shaw to finish the variation of the contract, which shows that Mr. Hobbs accepted further
performance of the contract and has affirmed the contract. According to the case of, Davenport v
The Queen-1877,72 “An innocent party who accepts further performance after the breach of the
contract, held there by to have affirmed the contract.”

Pleading 4:

The high court gave judgment by saying Mr. Hobbs does not have to pay damages to Mr. Shaw
in relation to the warehouse repairs. We submit that. [i] there was no acceptance of the offer of
making the floor with inferior material [ii] There was misrepresentation regarding the material of
the floorings. [iii] There was tort of negligence. (IV) Obligations that arises under the Sales Of
Goods Act 1979
71
Vitol SA v Beta Renowable SA [2017] EWHC
72
Davenport v The Queen (Queensland) Privy Council

43
[i] Mr. Shaw never accepted the offer of making the floor with inferior material.

Acceptance is the final and unqualified expression of assent to terms proposed by the offeror.73
Acceptance should follow the ‘mirror image rule’, as there needs to be a mirror image
acceptance of the offer. An acceptance must exactly match all the terms offered.74 Mr. Shaw did
not accept the offer of making the floor with the inferior material.
The general rule is that acceptance of an offer will not be implied from the mere silence on the
part of the offeree.75 Though silence can be a form of acceptance in this matter. One can accept
the offer by remaining silent but the offeror has to mention that he is accepting the offer by the
conduct of the offeree for being silent.76 But there was no conduct form Mr. Shaw. In the general
rule acceptance can be made by conduct.
It must be demonstrated that the offree acted with the objectively judged intention of accepting
the offer for the activity to be considered an acceptance.77 Here, Mr. Shaw was not clear about
the changes because Mr. Shaw relied on the representation of precision Builders. Even if Mr.
Shaw accepts through conduct, it can not be valid acceptance because there was a
misrepresentation by Mr. Hobbs.

Also, there was no communication for the acceptance. mere mental assent is not sufficient.78 The
offeree is assenting to an offer in his mind only and not communicated it to the offeror.

[ii] There was misrepresentation regarding the material of the floorings.

Misrepresentation is a false statement of fact, which is addressed to the party misled, whilst not
being a term of a contract, which is material and induces the other party to enter the contract and
it was relied upon. to consider a misrepresentation it should fulfill all the requirements of a
misrepresentation:

73
Hyde v Wrench [1840] EWHC Ch J90
74
Gibson v Manchester City Council [1979] UKHL 6
75
Felthouse v Bindley [1862] EWHC CP J35
76
Rust v Abbey Assurance company. [1969]
77
Day Morris Associates v Voyce [2003] EWCA Civ 189
78
Entores v Miles Far East Corp [1955] 2 QB 327

44
(a) firstly. there has to be an unambiguous statement of fact which was false.79 This false
statement must be material, meaning it influences the decision of the other party, and the other
party must reasonably rely on it. Here, the false statement was that precision builders assured
that the use of urethane-based flooring does not compromise on quality or durability.
(b) secondly, after establishing the dispute statement it must be shown the statement was
addressed to the party misled indirectly. It can be addressed by the representator to a third party
with intention that it be passed on to the claimant.80 here, Precision builders was the representor
and Mr. Hobbs acted as an agent who passed it to Mr. Shaw.

( c) There was an inducement which will lead representee to enter into the contract. The false
statement Induced Mr. Shaw to enter into the contract. Also, the misrepresentation had
materiality and there was a reliance.81 There will be no reliance if the representee does not reply
on the misrepresentation but on his own judgment or investigation.82 But even if the claimant has
investigated, partial reliance on misrepresentation is sufficient.83
(d) There is no general duty to check a representation, Here, one of the technicians informed Mr.
Shaw of the slight abrasions seen on the flooring but the investigation happened after the
flooring was made and Mr. Shaw was already induced by the misrepresentation. So, there was
partial reliance.
The misrepresentation caused loss to Mr. Shaw because he will not be able to store any wrenches
for his business. Although there was a frustrating event for the destruction, but the damages of
the flooring could have been prevented if Precision Builders did not compromise the quality and
durability of the flooring.

Thus far we have proved that there has been a misrepresentation from Precision Builders and Mr.
Hobbs acted as an agent for Precision Builders. Now, Whether Mr. Hobbs is innocent or not; the
burden of proof for innocence is on Mr. Hobbs. Even if Hobbs proves that it was an innocent

McInerny v Lloyds Bank Ltd [1974] 1 Lloyd’s Rep 246; Avon Insurance plc v
79

Swrie Faser Ltd [2000] 1 All ER (comm) 573

80
Commercial Banking Co of Sydney Ltd v R H Brown & Co [1972]HCA 24
81
Museprime Properties v Adhill properties [1990] 36 EG 114
82
Attwood v Small (1838) 6 CI & F 232
83
Edgington v Fitzmaurice (1885) 24 Ch D 459

45
misrepresentation from him as had “reasonable grounds to believe and did believe up to the time
the contract made that the facts represented were true” Mr. Hobbs would still be liable for
rescission under this case. Since a major alliteration has happened with the flooring after the
flood, rescission is not possible.
Now, Mr. Shaw will get rescission or damages in “lieu of rescission” under section 2(2) of
misrepresentation act 1967. The right to rescind the contract may be lost in accordance with the
section 2(2) of the misrepresentation act 1967 if the court decides to grant the claimant damages
rather than withdraw the contract. Court try to give some logical option in this section.
In the case of Willam Sindall v Cambridge county council, the Court of Appeal found that if
there had been an innocent misrepresentation, damages would have been granted rather than the
contract being terminated under section 2(2).
So, Mr. Shaw damages will be awarded rather than the contract being canceled.

[iii] There was tort of negligence.

The tort of negligence holds people or organizations liable for harm they cause by not taking
reasonable care. When someone breaks a duty of care they owe another person and causes harm
or damage that could have been avoided, this is called negligence.

The following elements will establish the claim of negligence:

Duty of Care: The duty can be owed to class or person. here, Mr. Hobbs and Precision builders
owed a duty of care to Mr.Shaw . A duty of care is a legal requirement to act reasonably in order
to avoid causing harm to others. In the case of, Junior v Veitchi and Co[1983],84 the House of
Lords ruled that the defendant was liable for negligent misstatement and breach of duty of care in
the installation of a concrete floor. The court held that even though there was no direct contract
between claimant and defendant, the defendant owed a duty of care as it was reasonably
foreseeable that claimant would rely on defendants expertise in the installation of the floor.

also, The judgment in Donoghue v Stevenson (1932),the court held that defendant, owed a duty

84
Junior v Veitchi and Co Ltd [1983] 1 AC 520

46
of care to claimant as a consumer of their product. This duty required defendant to take
reasonable care to ensure that their product was safe for consumption. This judgment established
the principle of negligence in the tort of negligence and had significant implications for product
liability and consumer protection laws.
here, Mr. Shaw was entitled to succeed in an action in tort because of the extremely close
relationship between Mr. Hobbs and Precision Builders. The crucial elements in the relationship
appear to be firstly, the fact that Mr. Shaw relied upon the skills of precision builders to do the
work and secondly, the fact that Mr. Hobbs assumed a responsibility towards Mr. Shaw because
of the structure of the contract.

Breach of Duty: Precision builders breached that duty by failing to act as a reasonably prudent
person. Where, Precision Builder used low quality material and there was a misrepresentation
from Precision Builders and Mr.Shaw [ii] This breach involved an action or a failure to act when
there was a duty to do so.

Causation: The breached caused the damage and it is a legal causation. The harm was a
reasonably foreseeable consequence of Precision Builders’ actions. Because Precision Builders
were experts and they know that the location of the warehouse in a humid town and low-quality
material will not be sufficient for the flooring. In the case of Esso Petroleum Co Ltd v Mardon
[1976],85 The court found in favor of claimant, holding that the defendant had a duty of care to
provide accurate information and had breached this duty by providing misleading estimates.
Since warehouse flooring material was not durable which caused the damage. And Mr. Shaw
will not be able to use the warehouse in future for the damage. The warehouse has been
commercially unusable.

Mr. Hobbs is vicariously liable for Precision Builders damage. Because Mr. Hobbs haired
Precision Builders. In the case of Various Claimants v. Catholic Child Welfare Society [2012],86
The Supreme Court clarified that in certain circumstances, such as where a special relationship
exists between the parties or where there is an assumption of responsibility, an entity may be

85
Esso Petroleum v Mardon [1976] QB 801
86
Various Claimants v. Catholic Child Welfare Society [2012] UKSC 56

47
vicariously liable for the negligence of another party, even if there is no direct employment
relationship.

(IV) According to the Section 14(2) of the Sales Of Goods Act 1979 where the seller sells
goods in the course of a business, there is an implied condition that the good supply under the
contract are of satisfactory quality. From the facts, it’s clear that the flooring material weren’t of
satisfactory quality because of which the abrasions started seeing with in a few weeks. Thus,
Precision Builders breached the Sales Of Goods Act 1979.

Damages: here, Mr. Shaw suffered actual damages as a result of the Precision builders and Mr.
Hobbs breach of duty. These damages can include property damage of the warehouse,
commercial loss, and or emotional distress for not being able to continue to use the warehouse.

48