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May & Butcher Ltd v R

[1934] 2 KB 17

Case summary last updated at 03/01/2020 15:30 by the Oxbridge Notes in-house law team.

Judgement for the case May & Butcher Ltd v R

R made a written agreement with M to sell surplus tentage, explicitly leaving the price and date of payment to be agreed upon from time to time. The HL held that this was too vague to constitute a contract. 
 
Lord Buckmaster: An agreement “in which some critical part of the contract matter is left undetermined is no contract at all”. The arbitration caluse was there to resolve disputes arising from the agreement, but in this case there was no agreement at all. 
 
Lord Warrington: to apply a “reasonable price” doctrine or to invoke the “arbitration clause” would not be to clear up a dispute arising from the contract but to create a contract where one did not exist. 
 
The only way of distinguishing this case from Foley would be to say that Foley was a case where the overall contract, which was undoubtedly in force, meant that the event HAD to happen, regardless of whether a price could be agreed, whereas this more common case involved a contract where the stated action couldn’t be undertaken UNLESS a price was agreed. However this seems tenuous. In reality it is a conflicting attitude to that of Foley and it is better to take the Foley attitude since it compensates for the imprecision inherent in business, and the arbitration clause and mechanism (agreement in future, subject to arbitration) for determining price, imperfect though it may be, was seriously intended. 

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