MusicFest Productions (MFP) wanted to organise a concert for a well-known boy band, Three Dimensions, to be held on 1 January 2015. On 1 July 2014, MFP appointed SuperAds Agency as the advertising agency to publicise the concert. The advertising contract contained the following Clause 8: “It is a term of this contract that SuperAds Agency will place daily newspaper advertisements in all the daily English and Chinese newspapers, between 1 October and 20 December 2014.” On the 15 November, MFP discovered that SuperAds Agency had not placed any advertisements in the Chinese daily newspaper on 8 November and 10 November. MFP informed SuperAds Agency that it had breached “a condition of the contract” and so it terminated the advertising contract on 18 November. SuperAds Agency was angry and insisted that the contract cannot be terminated. MFP ignored SuperAds Agency’s response and immediately engaged another advertising company, ProAdvertising Agency. The new agreement required ProAdvertising to engage in an intensive daily advertising campaign between 20 November and 20 December. However, by 22 November, all 100,000 tickets for the concert had already been sold so MFP cancelled its contract with ProAdvertising. There was no clause in the contract which permitted such a cancellation. ProAdvertising was extremely upset as it had pre-booked all the advertisement spaces with the newspapers.
(a) Advise MFP as to whether it was legally entitled to discharge the contract with SuperAds Agency. In your analysis, identify the nature of Clause 8 of the contract and examine the consequences of breaching such a term. You should examine the issues from MFP’s perspective.
(b) Explain to ProAdvertising whether there was any legal basis for MFP’s cancellation of its contract and MFP’s attempts to stop ProAdvertising from performing its contractual obligations. You should conclude your analysis by briefly stating the claims (if any) which ProAdvertising can make. You should examine the issues from ProAdvertising’s perspective.
The question belongs to Law and it discusses about innominate conditions and warranties between two parties and breach of contract terminating the contract.
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