Dispute Resolution

 

The fallout from the dispute between Scottish boxer Josh Taylor and his former promoters, Cyclone Promotions, has highlighted the tensions that arise between parties to a contract when one party wants out, either because they see a better deal or they are frustrated at breaches by the other party.

 

Background

 

Josh Taylor turned professional after winning Gold at the Commonwealth Games in Glasgow in 2014. Since turning professional, Josh has been promoted by Barry McGuigan’s Cyclone Promotions. Josh has continued to be immensely successful as a professional; winning all 16 of his bouts, including 12 by knockout. Along the way, Josh won the IBF light welterweight belt in May 2019 and, most recently, the WBA super light welterweight belt in October 2019.

Earlier this month, Josh announced that he had split with Cyclone Promotions and had signed up with US promoters, Top Rank Boxing. This announcement resulted in a Twitter spat between Cyclone Promotions and Josh. Cyclone Promotions maintained that he had broken an “exclusive worldwide contract” with them. Josh retorted that he had terminated the contract as a result of “various breaches of contract” by Cyclone Promotions.

 

When can a party terminate a contract due to the other side’s breach?

 

In Scots law, which may not be the law applicable to the contract between Josh and Cyclone Promotions, there is a distinction made between material and non-material breaches of a contract. A material breach is one that goes to the very root and purpose of the contract. For example, whilst it may be a non-material breach of a contract for a dry cleaner to fail to deliver Josh Taylor’s boxing robes to him a specified two weeks in advance of his next bout, it would be a material breach if they did not return them at all.

Where one party to a contract is in material breach, the other party is entitled to terminate the contract by notifying the party in breach that all future performance of the contract is at an end. This is known in Scotland as ‘recission’ of the contract.

Notification of recission of a contract may not be a knockout blow, however. The party who is said to have been in material breach of the contract may challenge the recission. They may look to oblige future performance of the contract, or indeed seek damages, by proving that any alleged breach of the contract was not a material breach entitling recission.

It is good practice, prior to your recission of a contract, to speak to legal advisers about the breaches. Where the other side notifies you of recission of a contract you are party to, it is just as important, if not more so, to take legal advice to ascertain your options.

Judging by the social media exchanges between Josh and Cyclone Promotions, neither party looks like throwing in the towel and the dispute may require a decision by the Courts.

 

https://brodies.com/people/craig-watt

Craig Watt