Droitwich Spa Case Study

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MATERIAL FACTS OF THE CASE
Mr Januzaj (Defendant) ran the Droitwich Spa Dental Practice (DSDP) from which Mr. Valilas (Claimant) practiced. It should be noted that Mr Valilas was neither an employee nor a partner in the practice. During the period, Mr Valilas worked under an oral agreement between which at the time was an acceptable arrangement.
Based on the terms of their oral agreement, Mr Valilas would pay to Mr Januzaj 50% of his monthly earnings in return for his use of the DSDP facilities, this included staff, equipment, facilitates and all other necessities. Most Mr Valilas’ earnings came from his contract with the local Primary Care Trust (PCT) which is a part of the National Health Service (NHS). His contractual arrangement with
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The relationship between Mr Valilas and Mr Januzaj later deteriorated and Mr Valilas fell behind on his UDAs. Mr Valilas told Mr Januzaj that he would stop making further monthly advance payments to the DSDP until the disagreement between them was resolved. The disagreement between the parties stemmed from many things inclusive of the Valilas declining to sign a “standard –form “associate agreement” provided by Mr Januzaj.
Based on the postscript of his letter to Mr Januzaj, Mr Valilas stated that he was prepared to pay on a ‘performed UDA’ basis each month. The reasoning for this decision as stated in the letter was based on the lack of trust between parties and his primary concern that Mr Januzaj would not pay back a relevant proportion of the payments paid over in advance in the event that Mr Valilas failed to meet his contractual target for the year with the PCT (as was by then a real
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Time of payment is not generally of the essence of a commercial contract unless the parties have agreed (either expressly or by necessary implication) that it should be; and that was not the case here
Lord Justice Floyd Paragraph 41: I agree, as Underhill LJ holds in paragraph 29, that the requirement for the Claimant to make monthly payments on time could not be described as a condition of the contract, and that it was an innominate or intermediate term.
Lady Justice Arden Paragraph 58: I am indebted to Underhill LJ for his clear and comprehensive judgment. However, I have reached the contrary conclusion for the reasons given below. I adopt the abbreviations used by Underhill LJ. I proceed on the basis that there were no provisions in the contract which would have enabled Mr Januzaj to terminate it in the events which happened irrespective of the seriousness of the breach. There were no such terms found by the judge.
Lord Justice Underhill in his analysis of the case considered that the failure to make three payments prior to termination was and could be considered a repudiatory breach as highlighted

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