If you feel that a commercial partner is backing out of its contractual commitments, or even intends to do so, swiftly taking legal advice is the first step towards protecting your position. A High Court case concerning pitch-side advertising at a football stadium clearly illustrated the wisdom of that approach.
A football club entered into an exclusive contract whereby it appointed a company to sell advertising space on its stadium’s LED display and perimeter hoardings. The company contended that, at a subsequent meeting, the club’s majority owner announced that it would immediately cease working with the company and that it had no intention of honouring its contractual obligations.
The club asserted in correspondence that the company had breached the contract by failing to comply with its dispute resolution provisions and that it was therefore entitled to terminate the same. However, the company launched proceedings and sought an interim injunction holding the club to the contract’s terms pending a trial of the action.
Ruling on the matter, the Court found that the company had raised serious issues to be resolved at trial. If it ultimately succeeded in its claim, damages would not be an entirely adequate remedy. Given its assertion that it would suffer serious economic and reputational harm if it were unable to exercise its rights under the contract, the balance of convenience also weighed in its favour.
The Court granted an interim order which, amongst other things, required the club to make the LED display and hoardings available for the company’s unobstructed use pending an expedited trial of the claim. The company undertook to pay the club damages if it subsequently turned out that the injunction should not have been granted.