Out-Law News | 21 Jun 2001 | 12:00 am | 1 min. read
The action was brought by a companies called Internet Trading Clubs (ITC) and UKNet which wanted the court to order that Freeserve should continue linking to the site of UKNet, set up as a joint venture between Freeserve and ITC. In terms of a business plan, ITC were solely responsible for the design and content of the web site, the operation of which was to be "directed and managed exclusively by ITC personnel".
However, when the site launched in April 2000, it was immediately clear that the site did not meet the standard required in the agreement between ITC and Freeserve and that it was failing to meet the revenue targets anticipated. By December that year, 80% of the site was no better than it had been at launch and Freeserve pulled out of the joint venture agreement.
ITC argued that the fault was that of UKNet, the joint venture company, not the fault of ITC, and that Freeserve was in breach of contract by removing the link. These arguments had won ITC a temporary court order that required Freeserve to maintain the link to the web site until trial. However, the High Court dismissed both ITC’s arguments and its temporary order against Freeserve.
The court reasoned that the obligation on ITC personnel to manage the site, which was contained in the business plan, had become part of the joint venture agreement, and ITC could not simply blame UKNet. The court also considered the scale of the site’s inadequacies so grave as to justify Freeserve’s withdrawal. The court added that, even if it had agreed with ITC’s arguments, it would not have forced the parties to cooperate with one another.