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Dwyer v Fredbar: when to designate Covid-19 as force majeure

Since the Covid-19 pandemic began in early 2020, many companies have been faced with disruption to their everyday commercial activities. As a result, litigation concerning the use of force majeure clauses has been on the rise. David E Grant and Anson Cheung consider force majeure in their article on Dwyer v Fredbar.

An example of litigation concerning force majeure is Fibula Air Travel SRL v Just-US Air SRL [2020] EWHC 3048; the charterer contended that a lease for the charter of an aircraft had been terminated by force majeure.

Another, more recent, example is Dwyer (UK Franchising) Limited v Fredbar Limited [2021] EWHC 1218 (Ch). The claimant entered into a franchise agreement with the first defendant, Fredbar, as franchisee and the second defendant, Mr. Bartlett, as guarantor. David E Grant acted for the Defendants in this expedited trial on liability and injunctive relief between a franchisor and ex-franchisee. Read David’s summary here.

When the pandemic hit, Mr. Bartlett was advised to self-isolate for 12 weeks. There had also been a drop in demand for his services resulting from the pandemic – clause 30 of the agreement contained provisions relating to force majeure. When Mr. Bartlett approached the claimant about suspending the agreement under clause 30, the claimant refused, noting that plumbing services could still be provided as this was a key worker service, and the fact of fewer jobs did not constitute a force majeure.

Fredbar purported to terminate the agreement on the grounds that, among other things, the claimant had failed to comply with its obligations under clause 30 in
refusing to designate the situation as force majeure. In turn, the claimant alleged the defendants had repudiated the contract which it accepted. The claimant then brought a claim for damages and repayment of certain franchise fees.

David E Grant and Anson Cheung analyse the facts of this case and the implications of the decision by the court that a failure to exercise a force majeure clause could itself amount to a repudiatory breach of the contract.

The article

You can read the full article here.

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Find out more

David E Grant practises primarily in commercial law, particularly pensions, financial services, civil fraud and fiduciary duty, banking, insolvency, chancery and employment. David has extensive advocacy experience and regularly appears in the Court of Appeal, High Court and specialist Tribunals. He has also attended numerous mediations and round table meetings in a wide variety of cases. David is currently ranked as one of two Band 1 pensions juniors.

Anson Cheung joined Chambers in 2021 following the successful completion of her pupillage. She is a member of the Attorney General’s Junior Junior Scheme. Anson gained experience in a variety of matters relating to commercial matters under the supervision of Justina Stewart during her time as a pupil. She has appeared as sole counsel and assisted members of Chambers in a range of commercial and chancery matters.

To find out more, contact Sam Carter on +44 (0)203 989 6669 or Colin Bunyan on +44 (0)20 7427 4886 for a confidential discussion.

Legal Blog & Publications, Commercial 23 Jun, 2021

Authors

David E Grant

Call: 1999

Anson Cheung

Call: 2019

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