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Jo C.
Jo C., Barrister
Category: Law
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Experience:  Over 5 years in practice
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Hi, I run a music promotions company called Petulant Penguin.

Resolved Question:

Hi,

I run a music promotions company called Petulant Penguin. In June 2013 we approached a music venue and bar in Fulham Broadway to offer our services to draw the students of Tech Music School to their venue. Tech Music School was moving from it's premises in Acton to Fulham (30 seconds away from the venue) from Sept 2013.

We agreed and signed a contract to deliver a weekly jam night at the venue specifically aimed at the students. The jam nights had an immediate effect and subsequently a large rise in their takings. As well as these jam nights we hosted a number of other successful events at the venue.

In mid Jan we were informed that they no longer wished to continue working with us as they didn't deem is successful enough. This was not mutually agreed and outside of the initial 5 week break clause.

1 week later they directly approached the band that we had been using and offered the gig to them, cutting us out.

We had put a lot of work into the promotion, equipment, staffing of these nights and feel that now they have the customers in the venue, they have dumped us, breaking the contract.

We have sent a complaint to the owning company for which they have stated that the contract was broken on both sides. They state that invoices were not submitted (they were and we have proof), Raised our bar split from 8% to 10% (the contract states 10%), Tech Music School would not promote the event (my business partner is currently studying a music business degree at TMS and has access to promotion to the students).

Any help would be much appreciated.

Please find the contract text below:

Contract between Petulant Penguin Ltd & Brogans Irish Bar - Number 1 The Broadway, Fulham, London, SW6 1AA.
1. Terms of contract:
1.1 Petulant Penguin Ltd to organise and run weekly live music events at Brogans Irish Bar that include but are not limited to – Jam nights, showcases and parties. A full itinerary of events to be agreed by both parties in advance.
2. Payment:
2.1 A set fee of £250 per event to be paid on a monthly basis in advance, Petulant Penguin Ltd to invoice as appropriate.
2.2 10% of the bar takings from each event to be paid at the end of each month, Brogans to supply correct earning information, Petulant Penguin Ltd to invoice as appropriate.
3. Dates and time of events:
3.1 Events to take place each Thursday in line with the Tech Music School academic calendar, said information to be given to Brogans in advance.
3.2 Events to start at 7pm and finish at 11pm, any changes to times to be agreed by both parties in advance.
4. Logistics:
4.1 Petulant Penguin Ltd to supply backline musical equipment where necessary, Brogans to store equipment in house between events.
4.2 Staff from either Petulant Penguin Ltd or the hired band to be responsible for the set up and pack down of equipment at each event.
5. Break Clause:
5.1 A 5 week break clause to be enforced if either party is dissatisfied with the service the other is providing, 5 weeks notice in writing is required in order to break the contract at this point.
5.2 After this 5-week period both parties agree to continue working as stipulated in the contract up until June/July 2014 in line with Tech Music School academic calendar.
5.3 There is the option to terminate this outside of this 5-week term contract if both parties can come to an agreed decision.

Kind regards,
Darren Suckling
Petulant Penguin Ltd
Director
Submitted: 2 years ago.
Category: Law
Expert:  Jo C. replied 2 years ago.

Jo C. :

Hi. Thank you for your question. My name is XXXXX XXXXX I will try to help with this. Can you please confirm what you apparently did that resulted in you breaking the agreement?

Customer:

Hi Jo, Please find out initial complaint and response below:

Customer:













I would like to raise a complaint against the manager of Brogans Irish Bar, Fulham – Philip O’Sullivan. We approached Brogans in June 2013 in order to set-up a new weekly event and inform the pub of the arrival of Tech Music School to the area (myself and my business partner are former full-time employees of Tech Music School). Since October 2013 we have been running weekly music events for the benefit of Tech Music School students and have provided a successful and lucrative new audience for the pub.

On Wednesday 15th January 2014 Mr O’Sullivan informed us that he no longer wished to use our services with immediate effect. His reasoning being that the event wasn’t making as much money as he wanted, despite the fact that we brought in a much higher number of customers on our events compared with the regular weekday custom seen at Brogans.

I have attached a signed contract that states that we will run a weekly event up until June 2014, and that in order to terminate outside of the first 5 weeks of operation an agreed decision from both parties must be reached – please see clause 5. The action made by Phil is a clear breach of contract, as we had no part or consultation in reaching this decision. To add insult Mr O’Sullivan has since directly booked the band we employed and has already staged an event with them on Thursday 23rd January 2014, with the clear intention of continuing as a weekly event.

We have now incurred, and will continue to, a loss of earnings through no fault of our own. We have been taken advantage of in respect to our work and contacts which have now been bypassed by Mr O’sullivan’s breach of contract as well as trust.

I am in the process of seeking legal advice in regards XXXXX XXXXX matter but would appreciate a response from you or suitable alternative at this point.








Customer:









Thanks for your email, I can confirm that I have concluded my investigation into the matter and can offer the following in response:


 


 


Indeed Phil's final reasoning for pulling the event was that the night was not profitable when taking into consideration the cost of the band, the cost of the food & drinks provided for them, the cost of yourselves for the evening and the discount on drink for the students. The attendance was higher than on a regular Thursday however there was not enough to cover costs and certainly not enough to make the event profitable.


 


In regards XXXXX XXXXX consulting you before pulling the event I can offer the following issues in regards XXXXX XXXXX contract:


 


2: Payment


2.1 - states that you will invoice monthly for the cost of the band, you indeed were paid weekly and have still not provided an invoice for all of the weeks


2.2 - states that you will invoice monthly for the 10% split of the bar, you indeed were paid weekly and have still not provided an invoice for all of the weeks. You also charged 10% of the bar including VAT but are not actually VAT registered.


 


3: Dates & Times


3.1 - Events did at times clash with the Tech Music School and you did not inform Brogans in advance. It was also later discovered that the Tech School refused to advertise your events because Darren Suckling was advised to leave the college due to his actions.


 


The contract I feel has been breached by both parties and so no longer stands. Philip was approached by the band after he terminated the event as they were also not happy working with Petulant. They asked if they could work directly with Phil and promote the event through the Music School.





Customer:

And this is our reply:

Customer:







2.1 We have invoiced for ALL nights (I have evidence of all of the invoices sent). Phil requested invoices on a weekly basis.

2.2 We were told to raise the percentage from 8% to 10% so the VAT could be deducted, as instructed by Phil and his ops manager. We have never said that we are VAT registered.

3.1 We notified Phil of all TMS events that were running on a Thursday night, when we knew. There is of no relevance to this contract of the actions made against Darren Suckling, I personally have been able to advertise to Tech Music School students, as I am currently studying there.


We have not breached the contract as you suggest whereas Brogans clearly has, which we have evidence to prove.


It seems strange that Brogans has continued to run this event directly with the band seeing as the event was so unprofitable, and we weren’t paid a particularly high fee, especially considering that we provided over £8,000 worth of equipment to be used for each event, which we set-up in advance of each night, as well as having Petulant Penguin staff present for the majority of events.


It seems clear to me that the reasoning’s behind our services being terminated were not as the venture was unprofitable, but simply as Phil saw a way of undercutting our services and work we had done in setting up and getting Brogans recognized by the student body of Tech Music School in order to see a higher profit for him.


Jo C. :

Hi

Jo C. :

Yes, I've read all of that.

Jo C. :

What I need to know is what you apparently did that resulted in you breaking the agreement?

Customer:

That's it. We didn't do anything to break the contract.

Jo C. :

Ok.

Jo C. :

So they are just terminating.

Jo C. :

What loss does this cause you?

Customer:

Yes, they're terminating outside of the 5 week break clause without mutual agreement. We have and will continue to incur a loss of income amounting to around £4500

Jo C. :

By means of lost profits?

Customer:

Yes. We were contracted to deliver these nights until the end of the academic year, 18 more nights.

Jo C. :

Thanks.

Jo C. :

Can you sell your services to others on those nights?

Customer:

Sorry, I don't understand. We can set other night ups elsewhere. That doesn't help us with our projected income for this contract.

Jo C. :

No, I understand but you are under a duty to mitigate your loss.

Jo C. :

Obviously they are in breach of contract.

Jo C. :

But you can only claim the sum of your loss consistent with your duty to mitigate.

Jo C. :

If you can sell your services elsewhere then you are under an obligation to do so and you will have to prove to the court that you have tried.

Jo C. :

You do have a lost profits claim against them.

Jo C. :

But you do have to mitigate your loss. If you are saying that you can fill all of these nights elsewhere then that is a difficulty because your obligation is to do so.

Jo C. :

If there is some shortfall then there would be a claim for that sum.

Jo C. :

Its not really more complicated than that.

Jo C. :

Your claim is for your loss but you must mitigate your loss.

Jo C. :

Can I clarify anything for you?

Customer:

We have continued to source new contracts in other areas of London, however we would not be able to successfully be able to sell our services in the area aimed at the student base that we initially aimed this night at, successfully.

Jo C. :

No, but can you work elsewhere?

Jo C. :

It doesn't have to be like for like work.

Jo C. :

If you can work on the night of the 11th for instance either at location A or location B and the owners of location A are in breach then the court would expect you to look for work elsewhere at location B.

Customer:

Well, yes we have looked for other nights and have found a replacement Thursday night but there will be a gap of at least 2 months until these can come in to action. Do you think this is worth pursuing? It's pretty clear cut to me that they have breached the contract

Jo C. :

I think they are in breach of contract. The question is what is your loss.

Jo C. :

If you can't fill the vacancies for 2 months then that is your claim.

Jo C. :

Overall, I would probably claim.

Jo C. :

Its likely to be a small claims courrt sum so the worst that could happen is that you would lose and have to pay a small amount in costs.

Customer:

Ok, thanks for your advice Jo.

Jo C. :

No problem and all the best.



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Jo C., Barrister
Category: Law
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Experience: Over 5 years in practice
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