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Ash
Ash, Solicitor
Category: Law
Satisfied Customers: 10916
Experience:  Solicitor with 5+ years experience
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Hi there, While negotiating a contract, it was made clear

Resolved Question:

Hi there,
While negotiating a contract, it was made clear by other party ("Licensor") in drafts, certain assets would not be available. However, it was passed to our Business Affairs Dept (who was aware) and those assets were included in the contract. They ("Licensor") are refusing to deliver those assets now (as they don t' have them), but they have signed a contract with the assets specified in the contract. There is no right of termination for the party that delivered the assets ("Licensor") note they the ("Licensor") have signed the contract:
There are a few clauses in the contract the Licensor signed as follows:
19 - In no event will Licensor be entitled by reason of breach or default to revoke, terminate, or rescind or alter this Agreement or to enjoin or restrain sales and distribution or advertising of the Film or Kaleidoscope’s exploitation of the Rights, or to seek, accept, apply for or obtain any equitable remedies whatsoever against Kaleidoscope.
20 Entire agreement
20.1 This Agreement contains the entire agreement between the parties with respect to its subject matter and supersedes and extinguishes any prior drafts, agreements, undertakings, representations, warranties and arrangements of any nature whatever, whether or not in writing, between the parties in relation to the subject matter of this Agreement.
My question is, do they ("Licensor") have a legal case to say they were clear the assets were not available, even after they ("Licensor) has signed a contract with the assets specified, coupled with the above clauses?
Submitted: 2 years ago.
Category: Law
Expert:  Ash replied 2 years ago.
Alex Watts :

Hello my name is ***** ***** I will help you with this. Please note that I am a working Solicitor and may be on and offline as I have to attend Court and meet with clients, even at weekends. As such you may not get an instant response when you reply as this is not an ‘on demand’ live service, but rest assured I will be giving your question my immediate attention upon return. There is no need to wait here, you will get an email when I reply.

Alex Watts :

Did they seek legal advice before signing the contract? Was it just a mistake please?

Customer:

I believe the person who negotiated the contract is a US lawyer - she would have given the ok for it to be signed to her CEO. Essentially, we changed our position during negotiations but they still signed the contract without reviewing properly. In context, this is the media industry and we deal with several contracts daily. From my perspective, I have to check and review every contract that is redlined, so nothing slips through the net - they signed this contract.

Alex Watts :

Did you inform them of the changes?

Customer:

Not me. The material change is a delivery assets so it was decided by a different department - ie. they make the final call what they need. My last email to them with be along the lines of this:



Please advise if you have any final comments. I will then liaise internally and we can insert the final Schedule of Assets into a signature copy of the Agreement.



I am concurrently circulating this internally and therefore must reserve the right to comment/amend further.

Alex Watts :

Ok - but the contract was changed and no one advised them of the change?

Customer:

Correct. How we can advise every client, on amendments that go and involve an entire company that we make, is near impossible. We are transparent and we present contracts for signature. They signed and there was nothing underhand or sneaky about it. OK, so we didn't flag it. But, I surely they need to read contracts before signing? As I said before in earlier email, the following clauses are in the contract they signed.

In no event will Licensor be entitled by reason of breach or default to revoke, terminate, or rescind or alter this Agreement or to enjoin or restrain sales and distribution or advertising of the Film or Kaleidoscope’s exploitation of the Rights, or to seek, accept, apply for or obtain any equitable remedies whatsoever against Kaleidoscope.

20 Entire agreement

20.1 This Agreement contains the entire agreement between the parties with respect to its subject matter and supersedes and extinguishes any prior drafts, agreements, undertakings, representations, warranties and arrangements of any nature whatever, whether or not in writing, between the parties in relation to the subject matter of this Agreement.

Customer:

Can we really be responsible for their signature?

Alex Watts :

Are these assets ancillary to the contract or a major part of it please?

Customer:

In their opinion, small. In our opinion, material and completely necessary as we are the distributor and know our clients, area of expertise and will make no money without them.

Alex Watts :

I see. In that case they and you are bound.

Alex Watts :

The only thing they can argue is mistake

Alex Watts :

But mistake is unilateral where one person makes a mistake

Alex Watts :

However saying that in the case of Smith v Hughes (1871) it was held that it would have to be a fundamental term

Alex Watts :

If it was not then it is mistake as to quality and can't be rectified

Alex Watts :

They should have had a lawyer check the contract before signing

Alex Watts :

If their lawyer did not pick it up then it is quite possible they have a negligence claim against the lawyer.

Alex Watts :

Can I clarify anything for you about this today please?

Customer:

OK thanks, ***** ***** I thought. Is "mistake" a good defence in commercial contracts where the contract is clear and they have signed on their own free will ie. given the opportunity to provide further comments as well ?

Customer:

ie is this generally successful? ( FYI, this is not a huge contract, less that 100k)

Alex Watts :

Mistake can be used in commercial but generally it has to be so fundamental, ie subject matter etc

Alex Watts :

Does that help?

Customer:

OK, thanks - so would you be confident that we can just be happy with the contract that is signed and let them argue whatever they want - let them sue if they want?

Customer:

That's my last question, promise!

Alex Watts :

Yes I would be confident of that. It is not a mistake as to subject matter, but the fact they didnt pick up on a term

Alex Watts :

Negligence from the lawyer rather I think

Alex Watts :

Does that help you?

Alex Watts :

If this does answer your question might I invite you to rate my answer

Alex Watts :

If the system wont let you please do say

Alex Watts :

If you need more help please click reply

Customer:

Thanks Alex.

Ash, Solicitor
Category: Law
Satisfied Customers: 10916
Experience: Solicitor with 5+ years experience
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