HRCKY Limited v Hard Rock Limited: [2024] JCA 069

This is a judgment of the Court of Appeal concerning a long-standing dispute concerning a franchise agreement between a Jersey company (Hard Rock Limited) and a British Virgin Islands company (HRCKY Limited) to run a franchise in the Cayman Islands.

The main element of this dispute related to a counterclaim brought by HRCKY alleging that it had entered into the Franchise Agreement on the basis of misrepresentations.  Some of those misrepresentations were said to have been committed by failing to disclose certain information.

At first instance, the Royal Court dismissed the counterclaims in its entirety.  HRCKY sought to appeal this decision.  The ground of appeal that the Court of Appeal provided the most analysis on was on whether the Royal Court was correct to say that dol par reticence (i.e. fraud by silence) did not form part of the law of Jersey.

The Court of Appeal accepted that there was nothing in the commentaries about Jersey’s customary law that supports dol par reticence forming part of Jersey law save for contacts of uberrimae fidei (i.e. contracts of insurance).

Comment: This provides reassurance that in pre-contractual negotiations, the concept of caveat emptor (‘buyer beware’) is still very much applicable and that a party cannot incur pre-contractual liability if they should fail to disclose a piece of information.  This case also further highlights the importance of an ‘entire agreement’ clause in a commercial contract.

Keywords: Contact; Good Faith; Erruer; Misrepresentation; Dol par reticence; Fraud by silence

A link to the full judgment can be accessed here