Narhex Australia Pty Limited v Telemarketing Australia Pty Limited

Narhex Australia Pty Limited (the appellant) appealed to the New South Wales Court of Appeal against a decision of the Supreme Court of New South Wales. The dispute concerned the interpretation and enforceability of a franchise agreement between Narhex and Telemarketing Australia Pty Limited (the respondent).

The primary legal issue before the Court of Appeal was whether the franchise agreement was void for uncertainty or illegality, specifically in relation to the respondent's obligation to pay royalties. The court was required to determine if the agreement, as drafted, provided a sufficiently clear and ascertainable basis for calculating the royalties due.

The Court of Appeal found that the agreement was not void for uncertainty. Applying principles of contractual interpretation, the court held that the terms of the agreement, when read as a whole, provided a mechanism for determining the royalty payments, even if that mechanism required some degree of calculation or reference to external factors. The court reasoned that where a contract contains a formula or method for determining a price or payment, it is generally not considered uncertain, provided that formula or method is capable of being applied. The court did not find any illegality that would render the contract void.

Consequently, the appeal was dismissed, and the Supreme Court's decision upholding the validity of the franchise agreement was affirmed.