The sellers had sold to the buyers a piece of land to use in the latter’s business as coach proprietors, and also contracted with them to supply all the petrol required for that business ‘at a price to be agreed by the parties in writing and from time to time’. There was an arbitration clause.
Held: A term was to be implied that in default of agreement the price of the petrol was to be a reasonable price: if that could not be agreed, it could be settled by arbitration. An agreement which leaves a material term outstanding to be agreed may be not enforceable.
Maugham LJ said: ‘It is indisputable that unless all the material terms of the contract are agreed there is no binding obligation. An agreement to agree in the future is not a contract; nor is there a contract if a material term is neither settled nor implied by law and the document contains no machinery for ascertaining it.’ One contention of the Defendants was that the agreement was an unreasonable and unnecessary restraint of the Defendants’ trade and was contrary to public policy and illegal. Scrutton LJ held that there was no ‘undue’ restraint of trade.
Maugham LJ, Scrutton LJ
[1934] 2 KB 1
England and Wales
Cited by:
Cited – Oldham and others v Georgina Kyrris and Another CA 4-Nov-2003
The claimant sought to bring a claim against the administrators of a partnership alleging a duty of care to creditors.
Held: Such an administrator owed no greater duty to creditors than would a director. That duty was no different whether the . .
Cited – Xydhias v Xydhias CA 21-Dec-1998
The principles of contract law are of little use when looking at the course of negotiations in divorce ancillary proceedings. In the case of a dispute the court must use its own discretion to determine whether agreement had been reached. Thorpe LJ . .
Cited – F L Schuler AG v Wickman Machine Tools Sales Limited HL 4-Apr-1973
The parties entered an agreement to distribute and sell goods in the UK. They disagreed as to the meaning of a term governing the termination of the distributorship.
Held: The court can not take into account the post-contractual conduct or . .
Cited – WWF (World Wide Fund for Nature) and Another v World Wrestling Federation Entertainment Inc CA 2-Apr-2007
The parties had disputed use of the initals WWF, with a compromise reached in 1994 allowing primary use by the Fund with restricted use by the Federation. The Federation now appealed an award of damages made after a finding of a breach of the . .
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 – MRI Trading Ag v Erdenet Mining Corporation Llc CA 8-Mar-2013
The Commercial Court had found the result of an arbitration award ‘obviously wrong’, and ineed bizarre.
Held: The appeal failed. The award was flawed, in failing to take account of the trading context between the parties: ‘The overall . .
Lists of cited by and citing cases may be incomplete.
Contract
Leading Case
Updated: 01 November 2021; Ref: scu.190146