Co-operative Insurance Society Ltd v Argyll Stores
Encyclopedia
Cooperative Insurance Society Ltd v Argyll Stores (Holdings) Ltd [1998] AC 1 is an English contract law
case, concerning the possibility of claiming specific performance of a promise after breach of contract
.
, for 35 years from 1979, with a convenant to ‘keep open the demised premises for retail trade’. In 1995, the store was making a loss and Argyll closed, despite the protests of the Coop. The Coop argued that they should be awarded specific performance, on the ground that it was necessary to keep a store open in an otherwise depressed area.
The trial judge refused a specific performance order. The Court of Appeal granted specific performance by a majority, because there was considerable difficulty proving a loss suffered and Argyll had acted with ‘unmitigated commercial cynicism’.
Lord Hoffmann gave the leading judgment.
English contract law
English contract law is a body of law regulating contracts in England and Wales. With its roots in the lex mercatoria and the activism of the judiciary during the industrial revolution, it shares a heritage with countries across the Commonwealth , and the United States...
case, concerning the possibility of claiming specific performance of a promise after breach of contract
Breach of contract
Breach of contract is a legal cause of action in which a binding agreement or bargained-for exchange is not honored by one or more of the parties to the contract by non-performance or interference with the other party's performance....
.
Facts
The Cooperative Insurance Society Ltd (CIS) owned the freehold of a shopping centre and they let the anchor unit to Argyll Stores as a supermarketSupermarket
A supermarket, a form of grocery store, is a self-service store offering a wide variety of food and household merchandise, organized into departments...
, for 35 years from 1979, with a convenant to ‘keep open the demised premises for retail trade’. In 1995, the store was making a loss and Argyll closed, despite the protests of the Coop. The Coop argued that they should be awarded specific performance, on the ground that it was necessary to keep a store open in an otherwise depressed area.
The trial judge refused a specific performance order. The Court of Appeal granted specific performance by a majority, because there was considerable difficulty proving a loss suffered and Argyll had acted with ‘unmitigated commercial cynicism’.
Judgment
The House of Lords allowed Argyll Store’s appeal and said the judge’s exercise of discretion was correct in refusing an award of specific performance. Damages were the appropriate remedy. There were a number of relevant considerations. First, it was settled practice that no order would make someone run a business. Second, enormous losses would result from being forced to run a trade. Third, framing the order would be unduly difficult. Fourth, wasteful litigation over compliance could result. Fifth, it was oppressive to have to run a business under threat of contempt of court. Sixth, it was against the public interest to require a business to be run if compensation was a plausible alternative.Lord Hoffmann gave the leading judgment.