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TLT secures Court of Appeal win for WH Smith in six year dispute

TLT has successfully defended WH Smith against an appeal by 20th Century Fox in a long running and complex £3m accounting dispute involving a "sale or return" contract for DVD's and other media products. 

The case concerned a "sale or return" contract where 20th Century Fox supplied media including DVDs to WH Smith to sell in their stores. Under the contract, where products weren't sold, WH Smith could send them back to 20th Century Fox and recoup the cost. The dispute arose when the contract came to an end and there was a mismatch over who owed what to whom, with differing figures in each party's accounts.

Chris Owen, head of Commercial Dispute Resolution at TLT, commented:

"Sale or return contracts are popular with retailers, providing comfort that unsold stock can be returned to the distributer.

"The approach is relatively straightforward with bigger ticket items, because they are easier to track. What this case shows is the difficulties that can arise where the contract relates to high volume products that are subject to variations in price and a larger number of customer returns.

"Where a sale or return contract does involve the flow of hundreds of thousands of products between the distributor and the retailer, this case highlights the absolute necessity of having appropriate systems in place to ensure that detailed and accurate accounts are maintained."

During the course of the proceedings and in the run up to trial at the High Court, 20th Century Fox had made concessions of more than £1.7m in WH Smith's favour leaving nearly £1.3m in dispute. The High Court granted judgment for WH Smith for the sum of £1.2m following a trial over the disputed balance in the summer of 2015.

The subsequent appeal by 20th Century Fox against the decision was unanimously dismissed by the Court of Appeal.

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