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What is a reasonable notice period?

Written by Michael Coyle on 16 November 2013

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Hamsard 3147 Ltd (t/a Mini Mode Childrenswear) v Boots UK Ltd [2013] EWHC 3251 (Ch), 31 October 2013, Norris J.   The claim was mainly concerned with the termination of an agreement between Boots and its former childrenswear supplier, Hamsard 3147 Ltd ('Hamsard'). The latter sought damages for wrongful termination of the supply contract.

The Judge identified four key points but the main issue was whether 9 months' notice to terminate the contract was a reasonable period or was it too short?

It is generally fair to say that its common ground that the period of notice in any dispute must be "reasonable". In reality the applicable principles which guide any court must always depend on the particular facts of the particular case, in addition the particular facts might well involve consideration of the general circumstances and practices of the trade in question. What is reasonable notice is to be judged as at the time when the notice is given.

Whilst this case did not create any new law, the Judge set a clear set of principles which may be applied to determine what notice of termination is reasonable where a contract is silent on the issue of term and termination.

In Paper Light Limited v Swinton Group Limited [1998] CLC 1667 Clarke J said the following, after considering the choice between the circumstances at the time when the contract was made and the circumstances at the time when notice was given:-

"It seems to me that the correct answer to that question in principle is that, whereas the question whether a term is to be implied must be judged at the time of the contract, once it is decided that a term as to reasonable notice should be implied, the question what period of notice would be reasonable must be judged at the time the notice is given. It will be known at the time the contract is made that circumstances may change between the time of the contract and the time of the notice, which may be many years later. Thus it would be unsatisfactory and make no commercial or other sense to hold that the reasonable period of notice should be determined long before the notice was to be given".

http://www.bailii.org/cgi-bin/markup.cgi?doc=/ew/cases/EWHC/Patents/2013/3251.html

MJC

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