Docklands Solicitor

Latest legal news from Docklands Solicitors, Kaslers Solicitors LLP.

Tuesday, 24 August 2010



C, a company, agreed to enter into a lease with P, a provider of photocopiers. P proposed that upon entering into the lease C would receive “cashback” and “marketing support” payments to reduce its overall costs. C entered into a number of supply and service agreements with P over a period of 4 years. The last agreement included an additional provision for a full contract review and for C’s annual costs to be maintained.

A leasing agreement was arranged between C and F under which C paid quarterly rental for the machines. The amount of the cashback payable to C was included in the sum financed.

C cancelled the lease. It did not receive any cashback. C issued proceedings to recover its costs and the promised cashback, claiming that it had been induced to enter into the agreements on the basis of misrepresentations made by P.

The Court held that:

1. It was understood between the parties that C was only prepared to enter into a new lease if it received cashback payments to maintain its target costs.

2. Payment of the cashback was not dependant on C entering into a new lease.

3. P misled C by indicating that the cashback payments would substantially reduce C’s costs

4. P further misled C by suggesting that the cashback payments were a saving to C and would be paid out of P’s profits.

5. The reality was that C in fact borrowed the amount of the cashback and marketing support from F at a substantial rate of interest, thus increasing rather than decreasing its costs.

6. C would not have entered into the agreements if it had been aware of the true situation.

7. The references by P to cashback and marketing support were dishonest and deliberate misrepresentations.

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Call Michael Breeze on 07900 195 195 or call 0845 270 2511 to if you need legal advise about any of these issues

Kaslers Solicitors LLP is a limited liability partnership registered in England under LLP no. OC310653; authorised and regulated by the Solicitors Regulation Authority under reg no 408936; governed by professional rules set out in the Code of Conduct click here to visit and has its registered office / main trading address at Suite 3, 10 Churchill Square, Kings Hill, West Malling, Kent ME19 4YU - tel: +44 (0)845 270 2511; fax: +44 (0)845 270 2513; DX 92863 West Malling.
The LLP Members are Michael D Breeze LL.B (Hons) (SRA reg no 110184) and Simon McCree Scott LL.B (Hons) (SRA reg no 298202).