Concluding our series of blogs on a recent trio of successes in court, another recent court success for Gilson Gray’s Litigation & Dispute Resolution Team illustrates the importance of understanding the terms of your Distribution Agreement and ensuring you get your contracting processes, including associated Sale of Goods Contracts, correct.
Iain K Clark, Solicitor Advocate, Partner, and Head of Litigation & Dispute Resolution, conducted the advocacy in this Commercial Action before the Outer House of the Court of Session, instructed by Amy Campbell, Solicitor. They successfully represented Wilson Imports Limited in this action for payment against Advance Sport SAS (a French company) in respect of Everlast sportswear that Wilson Imports had supplied under a Distribution Agreement.
Advance Sports argued that they were entitled, under the principle of retention, to withhold payment for these goods, claiming that certain implied terms of the Sale of Goods Act 1979 relating to quality or fitness, sale by sample, and delivery within a reasonable time were implied into the Distribution Agreement.
In his Judgment at Wilson Imports Limited –v- Advance Sport SAS 2015 CSOH 114 dated 20 August 2015, Lord Woolman upheld our argument that that there were no terms implied by the Sale of Goods Act in to the Distribution Agreement, as it was not a contract for the sale of goods. On that basis, the counterclaim was found to be irrelevant and also found to be lacking in specification in a number of respects – particularly as to the terms of the individual sales contracts.
In addition, Lord Woolman held that Advance Sport SAS were not entitled to rely on the principle of retention as the Distribution Agreement and the individual sales contracts were not true counterparts of each other, applying the UK Supreme Court Case of Inveresk –v- Tullis Russell. As a result, Wilson Imports Limited (our clients) were successful in obtaining Decree for Payment against Advance Sport SAS.
This case establishes an important legal principle of relevance to every company doing business – whether buying or selling – through distribution. It makes clear that distribution agreements do not have the same implied conditions as contracts of sale. It is important therefore that attention is paid to the contracting arrangements and particularly the terms and conditions of the individual contracts of sale.
Once again, Gilson Gray was involved in the development of cutting edge commercial law – and, happily, our clients’ position was upheld.
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