There was an agreement between a group of colliery owners and a group of shipowners which was ancillary to an agreement between the colliery owners themselves. Each agreement was in restraint of trade.
Held: Lord Parker explained the doctrine of restraint of trade: ‘Monopolies and contracts in restraint of trade have this in common, that they both, if enforced, involve a derogation from the common law right in virtue of which any member of the community may exercise any trade or business he pleases and in such manner as he thinks best in his own interests.’
and ‘Contracts in restraint of trade were subject to somewhat different considerations. There is little doubt that the common law in the earlier stages of its growth treated all such contracts as contracts of imperfect obligation, if not void for all purposes; they were said to be against public policy in the sense that it was deemed impolitic to enforce them.’
and ‘It is only necessary to add that no contract was ever an offence at common law merely because it was in restraint of trade. The parties to such a contract, even if unenforceable, were always at liberty to act on it in the manner agreed. Similarly combinations, not amounting to contracts, in restraint of trade were never unlawful at common law. To make any such contract or combination unlawful it must amount to a criminal conspiracy, and the essence of a criminal conspiracy is a contract or combination to do something unlawful, or something lawful by unlawful means. The right of the individual to carry on his trade or business in the manner he considers best in his own interests involves the right of combining with others in a common course of action, provided such common course of action is undertaken with a single view to the interests of the combining parties and not with a view to injure others.’
Judges:
Lord Parker
Citations:
[1913] AC 781
Jurisdiction:
Australia
Citing:
Cited – Mogul Steamship Co Ltd v McGregor, Gow and Co HL 18-Dec-1891
An association of shipowners agreed to use various lawful means to dissuade customers from shipping their goods by the Mogul line.
Held: The agreement was lawful in the sense that it gave the Mogul Company no right to sue them. But (majority) . .
Cited by:
Cited – Esso Petroleum Co Ltd v Harper’s Garage (Stourport) Ltd HL 1968
Agreement in Restraint of Trade Unenforceable
The defendant ran two garages under solus agreements with the plaintiffs who complained when the defendants began to purchase petrol from cheaper alternative sources. The House was asked whether the solus agreements were be regarded in law as an . .
Cited – Norris v United States of America and others HL 12-Mar-2008
The detainee appealed an order for extradition to the USA, saying that the offence (price-fixing) was not one known to English common law. The USA sought his extradition under the provisions of the Sherman Act.
Held: It was not, and it would . .
Lists of cited by and citing cases may be incomplete.
Commercial
Leading Case
Updated: 27 November 2022; Ref: scu.259685