Reasonable notice CASES
In English law, reasonable notice refers to the implied right to terminate a contract when no express termination clause exists, ensuring fairness and practicality in the absence of formal agreement terms.
Definition and Principles
Where a contract is silent on termination terms or duration, courts may imply a right to terminate by giving reasonable notice. The period deemed “reasonable” depends on the specific context and circumstances surrounding the agreement’s nature and purpose.
Key Cases
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Winter Garden Theatre v Millennium Productions (1948)
In a licence agreement without a mutual termination clause, the House of Lords confirmed the licensor’s right to revoke on reasonable notice, underlining the need for fairness in open-ended agreements.
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Jackson Distribution Ltd v Tum Yeto Inc (2009)
In an informal distribution arrangement without a written contract, the court implied a term allowing termination on reasonable notice, finding that a 9‑month notice period was appropriate based on factors like investment, relationship length, and lack of alternative arrangements.
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Creen v Wright (1876)
A master mariner’s contract did not allow immediate dismissal without notice. The court held that, except in exceptional circumstances, reasonable notice was required to end the agreement.
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Baird Textile Holdings v Marks & Spencer (2001)
Long-standing commercial dealings did not create an enforceable contract implying reasonable notice upon termination. The court held such implication to be too uncertain.
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Artcrafts International v MOU Ltd (2024)
Where a contract contained detailed, express termination provisions, the court rejected the implication of a reasonable notice term, affirming that carefully negotiated terms cannot be overridden by implied rights.
Practical Implications
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Assess context: Consider factors like formality, length of relationship, investments made, and reliance when evaluating notice periods.
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Avoid ambiguity: Best practice is to include clear termination clauses or specify notice periods to prevent uncertainty.
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Mitigate risk: If reasonable notice isn’t given, termination remains valid, but the other party may seek damages equivalent to the loss suffered during a reasonable notice period.
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A patent holder agreed to suspend compensation payments from a licensee during the war. After the war, they sought to resume payments. The House of Lords held their promise was terminable by giving reasonable notice, confirming promissory estoppel suspends, not extinguishes, rights. Facts In 1938, the appellants (Tool Metal Manufacturing Co Ltd, ‘TMM’) granted the respondents (Tungsten Electric Co Ltd, ‘TECO’) a licence to import, make, use, and sell hard metal alloys protected by TMM’s patents. The agreement stipulated that if TECO’s monthly sales exceeded a specified quota, they were required to pay ‘compensation’ to TMM. Following the outbreak of
An illiterate passenger was injured after buying a railway ticket that referenced liability-excluding conditions in a separate timetable. The court found the company gave sufficient notice by referencing the conditions on the ticket, so the exclusion clause was binding regardless of her illiteracy. Facts The claimant, Mrs Thompson, was unable to read. Her niece purchased an excursion railway ticket for her from the defendant, the London, Midland and Scottish Railway Co. The front of the ticket was printed with the words, “Excursion. For conditions see back.” The back of the ticket stated it was issued subject to the conditions and
Stiletto hired photo transparencies from Interfoto and received a delivery note containing an exorbitant late fee clause. The court ruled this onerous and unusual term was not incorporated into the contract because Interfoto had not done enough to bring it to Stiletto's attention. Facts Stiletto Visual Programmes Ltd (‘Stiletto’), an advertising agency, required some photographs for a presentation. They contacted Interfoto Picture Library Ltd (‘Interfoto’) for the first time on 5th March 1984, requesting a selection of 1950s-era photographs. Interfoto dispatched 47 transparencies to Stiletto in a jiffy bag, along with a delivery note. This note contained nine printed ‘Conditions’
A buyer ordered a car body for delivery by a specific date. After waiving late delivery by continuing to press for it, the buyer gave the seller a final, reasonable deadline. The court held this notice made time of the essence again, so the buyer could validly refuse delivery when this new deadline was missed. Facts In 1947, the defendant, Mr Oppenhaim, placed an order with the plaintiffs, Charles Richards Ld, for a Rolls-Royce chassis and a custom-built body. The contract initially stipulated that the completed vehicle was to be delivered ‘on or about March 20, 1948’, and time was
