On 11 November 2003 singer Van Morrison’s company, Exile, was ordered to pay Gary Marlow, owner of The Crown Hotel in Marlborough, £40,000 in damages as a result of Morrison cancelling a gig at the hotel which had been promoted by the owner. Whilst the case was decided very much on its specific facts, there are lessons to be learned from the judgment by promoters and performers alike.
Marlow had contracted in writing with Exile, of which Morrison was sole shareholder and director, for Morrison to perform for a guaranteed fee of £20,000.
There was a dispute over the effect of a clause in the contract requiring Exile’s prior approval of all advertising and promotional materials in conjunction with the gig. Taking all aspects into account, including an apparently contradictory clause which required Marlow to use his best endeavours to promote and publicise the engagement, the judge decided that Marlow was not prohibited from responding to press enquiries. Relevant and precise language would have been required to achieve that prohibition. Exile’s subsequent refusal to have Morrison perform was therefore a repudiation which Marlow had validly accepted.
For public events, the commercial objective of financial success would probably imply in appearance agreements, even where none is expressed, a duty on the promoter to promote the event so as to maximise sales of tickets and any related merchandise. Artists will need to state clearly any restrictions on promotion or advertising that they wish to impose in conflict with that objective.
The judge then considered the extent of Exile’s liability. The contract provided that Marlow’s damages, in the event of any breach by Exile, would be limited to the compensation (ie the guaranteed fee) payable in respect of the engagement and that Marlow would not be entitled to any other damages (“including without limitation damages for loss of profit or consequential loss”).
Exile argued that this meant Marlow was only entitled to reimbursement of the guaranteed fee. The judge rejected an argument for Marlow that the Unfair Contract Terms Act protected him from the clause because it was unreasonable. However, in interpreting the clause itself, the judge found that the reference to damages meant damages “howsoever arising, other than a claim for repayment of the fee (to the extent that the fee had been paid).” Consequently the clause limited Exile’s liability to £20,000 after (ie in addition to) repayment of the fee itself.
The judge then assessed Marlow’s damages, including actual costs incurred, loss of profit from the gig and loss of profit from ancillary sales, at £21,075, with the result that the clause saved Exile only £1,075.
The judge’s treatment of both clauses highlights the importance of accurate drafting.