Baird Textile Holdings Ltd v Marks & Spencer plc

Baird Textile Holdings Ltd[1] had supplied clothes to Marks & Spencer plc. for thirty years. All of a sudden, M&S said they were cancelling their order. Baird sued M&S on the grounds that they should have been given reasonable notice. The problem was, there was no express contract under which such a term could be said to have arisen. Baird argued that a contract should be implied through their course of dealings. The judge found there was no such contract, and Baird appealed to the Court of Appeal.

Sir Andrew Morritt V-C (with whom Judge LJ and Mance LJ concurred), found that a contract could not be implied. Contracts are only implied where it is necessary. Here, any such agreement to keep up the purchase of clothes, subject to reasonable notice for termination, would be too uncertain. Uncertainty was confirmed by an absence of intention to be legally bound. Furthermore, an argument of estoppel could not succeed because estoppel is not capable (in English law as yet) of creating its own cause of action. Also, concerning estoppel, Judge LJ held that “The interesting question…is whether equity can provide a remedy which cannot be provided by contract. It seems clear that the principles of the law of estoppel have not yet been fully developed…” questioning estoppel and the applicability of equity.

Richard Field QC, Charles Bear and Herbert Smith acted for Baird and Michael Brindle QC, Andrew Burrows and Freshfields Bruckhaus Deringer acted for M&S.

• The Aramis [1989] 1 Lloyd’s Rep 213, Bingham LJ

• Text of the Baird Textile Holdings Ltd v. Marks & Spencer plc. judgment from www.ucc.ie