Gamerco SA v ICM / Fair Warning (Agency) Ltd [1995]

Gamerco SA v ICM / Fair Warning (Agency) Ltd [1995]

Gamerco SA v ICM / Fair Warning (Agency) Ltd [1995] 1 WLR 1226 is an English contract law case that concerned the application of the Law Reform (Frustrated Contracts) Act 1943.

The dispute centred around the promotion of a concert in Madrid by Gamerco, the promoters, and the corporate entity representing the band Guns N’ Roses, the defendants. The agreement involved significant advance payments made by Gamerco to the defendants. However, a few days before the scheduled concert, engineers reported structural issues with the venue, leading the authorities to ban its further use for safety reasons. As a result, Gamerco's licence to use the venue was revoked, prompting them to seek recovery of the advance payments.

Gamerco invoked Section 1(2) of the Law Reform (Frustrated Contracts) Act 1943, arguing that the contract had become incapable of performance through no fault of either party, as the authorities' revocation of the permit frustrated the contract. They asserted that they were not in breach of the contract and that the frustration was due to external factors. In response, the defendants contended that their only obligation under the contract was to be ready, willing, and able to perform the concert, and since they were willing, there was no frustration. Additionally, the defendants argued that Gamerco had agreed to bear the commercial risks associated with the concert, including the possibility of the venue being unavailable. The defendants counterclaimed for the losses they had sustained.

The court ruled in favour of Gamerco, determining that the contract was frustrated because it had become incapable of performance due to the authority's cancellation of the permit. The judgment emphasised that a term should be implied into the contract that Gamerco would take all reasonable steps to attain the permit but would not be required to ensure its continuous validity. Consequently, Gamerco was entitled to recover the advance payments under Section 1(2) of the 1943 Act, as the frustration was beyond their control, and they had not breached the implied term of the contract. This case illustrates the application of frustration principles and the implications of implied terms in contracts where unforeseen external events impact performance.
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