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Gamerco SA v ICM/Fair Warning (Agency) Ltd [1995] 1 WLR 1226

Promotion of concert; venue deemed unsafe; whether advance payment recoverable

Facts

Gamerco were promoters who entered into an agreement to promote a concert in Madrid with the defendants, the corporate persona of the band, Guns N’ Roses. A few days before the concert, engineers reported the venue was structurally unsound and the authorities banned its further use pending further investigations. Gamerco’s license to use the venue was revoked. Gamerco had paid the defendants large sums on account and they sought recovery.

Issues

Gamerco sought to recover the payments under s1(2) Law Reform (Frustrated Contracts) Act 1943 on the basis that the contract had become incapable of performance, through no default of either party to the contract. They contended the contract was frustrated due to the authority’s revocation of the permit, and that they were not in breach of contract. The defendants argued the band’s only obligation under the contract was to be ready, willing and able to perform the concert, and since they were so willing, there was no frustration of the contract. Further, they contended Gamerco had agreed to bear the commercial risks associated with the concert including the possibility that the venue would be unavailable. Gamerco’s failure to ensure there was a permit in place on the day of the concert amounted to a breach of contract, and the defendants counterclaimed for the losses they had sustained.

Held

Gamerco were successful in their claim. The contract was frustrated because it had become incapable of performance because the authority cancelled the permit. A term was implied into the contract that Gamerco would take all reasonable steps to attain the permit, but they were not required to ensure it remained in force. They could, therefore, recover the advance payments under s1(2) of the 1943 Act.


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