Unfavourable Terms Given to Market Leader Not a Breach of Contract


Shopping Channel JML Direct recently sued Freesat, a provider of television channels that can be accessed by purchasing a set-top box. Freesat is also responsible for compiling the channel listings, by way of an ‘electronic programme guide'.
Each channel that wanted to be included in the Freesat listings and available to people watching television through the Freesat box had to pay a registration fee of £1,500 and an annual fee of £30,000. JML Direct contracted with Freesat for two of its shopping channels to be included in the service. The contract contained several important clauses relating to compliance with the Ofcom Code, and how the channel numbers would be allocated. Freesat retained wide discretion over the numbers the channels would have, where they would appear in the listings and on which page of the listings.
When the channel numbers were allocated, JML Direct was given channels 809 and 810. Neither of these channels appeared on the first page of the 'shopping' listing, and JML Direct was understandably dissatisfied. They sued for, amongst other things, breach of contract on the basis that Freesat had behaved irrationally over the channel allocation. It transpired that Freesat had allocated channels in accordance with viewer expectations and convenience.
The court found that there had been no breach of contract as Freesat had been entitled to allocate the channels in whichever way it deemed most suitable.
JML Direct could have avoided this issue if they had given consideration to it and dealt with it in the contract.
If you are entering into a contract, always take professional advice.

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