Gamerco SA v. ICM/Fair Warning (Agency) Limited
High Court, Queen's Bench Division
[1995] E.M.L.R. 263 (1995)
ICM/Fair Warning and Guns 'n' Roses (defendants) contracted with Spanish promoter Gamerco SA (plaintiff) to stage a July 4 Madrid concert as part of a larger European tour, guaranteeing the defendants $1.1 million or 90 percent of net door receipts, with Gamerco paying a $412,500 advance; but engineers discovered venue problems on June 30, the venue permit was revoked July 1, and after failing to find a suitable alternative, the concert was canceled July 2. Gamerco sued to recover its advance, arguing the contract was discharged by frustration, while the defendants sought to offset the refund with expenses incurred for the tour, including an allocation of two of the tour's 53 days and hotel costs for July 3 and 4 -- dates after the contract's discharge.
Whether a party is entitled to full recovery of an advance payment made under a contract discharged by frustration, or whether the other party may deduct expenses it incurred in preparing to perform.