This case involved a dispute over something that should have been pleasurable – cupcakes – as sweetness soon turned sour. Two bakeries contracted for the supply of cupcakes by a larger baker to a smaller baker. The agreement set an annual target of £600,000, and the parties agreed to co-operate to help each party to reach that level of sales. The contract contained a forecast that the supplier would initially produce 20% of the cupcakes, rising to 100% two months later. Another provision, though, at clause 6.2 said: “For the avoidance of doubt, the Customer may manufacture the cupcakes for itself.” A dispute arose over the amount of cakes the customer ordered from the supplier. The supplier argued that the agreement was ambiguous and after the first two months all the cupcakes should be ordered from the supplier except for one particular sort.
The High Court did not agree with the supplier’s interpretation. It ruled that the target was merely a target and not a minimum. The provision in clause 6.2 was clear and the customer to make its own cakes. There was no basis for adding a further meaning into clause 6.2. As clause 6.2 clearly meant what it said, it should stand.