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Don’t ignore notice clauses!

11 February 2015

The High Court has reminded us that, in order to be effective, significant notices served on counterparties must comply with contractually agreed notice requirements. 

In a case involving Ticket2Final (T2F), a ticketing company, and Wigan Athletic AFC (Wigan) [1], the High Court considered the application of notice provisions to a termination clause.

The contract between Wigan and T2F authorised Wigan to terminate the contract in the event that T2F failed to pay any money owed to Wigan if such money remained outstanding for seven days following notice to T2F of the same. The contract also contained a notice clause formalising the manner in which notices should be served.

Wigan sought to exercise its termination right having served notice on T2F demanding payment for the outstanding sums without any subsequent resolution or payment. Wigan served notice demanding payment from T2F by email and thereby failed to comply with the contractual notice requirements.

Before the High Court, Wigan argued that the notice provision did not apply to notices demanding payment. In addition, according to Wigan, there was an implied term, arising as a result of the parties’ conduct to date, that notices could be delivered by email.

The judge disagreed with Wigan, the contractually agreed notice provisions would apply to notices demanding payment. The judge explained that notice provisions existed to ensure that important notices are served in an agreed manner therefore guaranteeing that the recipient would not be in any doubt about their importance. A notice which, if not complied with, might lead to termination would certainly be considered an important notice meaning that the agreed notice provisions must be observed.

This case serves as a gentle reminder to us all to check the notice clause both when drafting (to make sure it matches the way each party wants / needs to communicate) and when serving notices (to make sure the procedure is followed exactly). Email notice clauses are becoming very common, so here the practical advice is think hard about which email address to use. Many people are now specifically setting up ‘legalnotices@’ type inboxes with a set distribution list (eg General Counsel, Company Secretary and other relevant directors).


[1] Ticket2Final OU v Wigan Athletic AFC Ltd [2015] EWHC 61b (Ch)