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Legal Eagle

Contracts

Q: Breach of contract by venue

Our organisation wanted to stage its Annual General Meeting at a local theatre. Both sides agreed verbally on the month but the venue staff failed to finalise the details in time for us to make all our arrangements. So we pulled out and made a deal elsewhere for a later date. Now the theatre is demanding compensation claiming it turned away other business. Can it sue us?

A: In theory anybody can sue anybody for anything provided the claim discloses a legal cause of action and is properly presented. What you really mean is, is it likely to succeed? The answer in my view is no, because it would seem that all the essential terms of the proposed contract were not agreed and that the matter never beyond the stage of negotiation. The precise date and time of the meeting would be an essential term.

The venue management would or should have been aware that, even though agreement may have been reached on the month during which the meeting to take place (whether this was done verbally or in writing is immaterial) the precise date and time of the meeting would also need to be agreed sufficiently far in advance to enable you to prepare and send out notice to your members at least 21 days prior to the meeting. If, for whatever reason, it failed to finalise these details with you in sufficient time to enable you do this, you were entitled to withdraw and make arrangements elsewhere for a later date. As to its alleged loss of other business, it was open to it to give you a deadline for agreeing a fixed date and time with it if it were to keep a number of alternative dates and times open for you. Failure to meet any such deadline would not have involved you in a contractual breach, but it would at least have avoided any need for it to turn away other business, if indeed it did so.

First published January 1996