Hi there, unless there had been a serious breach of contract by you, the other party would have been expected to adhere to the contractual terms, including cancelling it only in accordance with the cancellation clause. In this case there was an explicit prohibition on termination within the first year of the contract, which is what they have gone and done regardless.
In a breach of contract claim the wronged party can consider making a claim for compensation. They would be seeking compensation for any losses incurred as a result of the breach. In your case that could be lost income but you will have to consider the overheads as well and deduct these from any profit you are trying to claim for. Selling the gym equipment would not automatically prevent you from claiming compensation unless the compensation was linked to the equipment, such as compensation for storage, diminution in value, etc.
If you wanted to pursue this further, if a dispute arises over compensation owed by one party to another, the party at fault can be pursued through the civil courts. As legal action should always be seen as a last resort, there are certain actions that should be taken initially to try and resolve this matter informally and without having to involve the courts. It is recommended that the process follows these steps:
1. Reminder letter – if no reminders have been sent yet, one should be sent first to allow the party at fault to voluntarily settle this matter.
2. Letter before action – if informal reminders have been sent but these have been ignored, the party at fault must be sent a formal letter asking them to resolve this amicably within a specified period of time. A reasonable period to demand a response by would be 10 days. They should be advised that if they fail to do contact you in order to resolve this matter, formal legal proceedings will be commenced to pursue the compensation due. This letter serves as a ‘final warning’ and gives the other side the opportunity to resolve this matter without the need for legal action.
3. If they fail to pay or at least make contact to try and resolve this, formal legal proceedings can be initiated. A claim can be commenced online by going to www.moneyclaim.gov.uk. Once the claim form is completed it will be sent to the other side and they will have a limited time to defend it. If they are aware legal proceedings have commenced it could also prompt them to reconsider their position and perhaps force them to contact you to try and resolve this.
Whatever correspondence is sent, it is always advisable to keep copies and use recorded delivery so that there is proof of delivery and a paper trail. The court may need to refer to these if it gets that far.