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Schuler v Wickman [1974] AC 235

By Oxbridge Law TeamUpdated 04/01/2024 07:00

Judgement for the case Schuler v Wickman

  • Plaintiff and Defendant had an agreement for Defendant to distribute and sell Plaintiff’s products.

  • Clause 7 included conditions such as the fact that Defendant had to visit a list of potential buyers once every week and these were stated explicitly as conditions. There was also a clause 11, which said that the agreement had to last until 31st December 1967 and thereafter could be ended by 12 months notice in writing.

  • It also said that either party could terminate the agreement if the other committed a material breach of its obligations and failed to remedy them within 60 days of being required to do so in writing.

  • Defendant failed to fulfil its clause 7 requirements and P terminated the agreement on the grounds that a “condition” was breached.

  • By majority, HL found in favour of Defendant. 

Lord Reid (majority)

  • “Remedy” means to put something right for the future, although not all breaches can be remedied e.g. leaking confidential info cannot be put right by a promise not to do so again.

  • In this case, failure to visit a firm once out of the 200 times that the contract required was not an irredeemable loss and could be remedied within clause 11’s meaning.

  • He says that what the contract deemed a “condition” was not using the word in its strict legal sense since a condition in law is something that is so fundamental to the contract that its breach merits termination. This was not the case here since missing one visit was fairly irrelevant.

    • This contradicts Upjohn LJ in Hong Kong Fir that parties re free to decide what the conditions are: this is a key freedom in contract because it is for the parties, not the courts, to say which terms are important enough to make contracts worth entering.

  • He says that “the more unreasonable the result, the more unlikely the parties were to have intended it” i.e. the result of making clause 7 a “condition” would be very unfair and therefore they can’t have meant it to be a condition.

    • This is illogical reasoning and assumes that people are incapable of making bad bargains

Lord Wilberforce (dissenting)

  • Clause 7 WAS a condition 

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Contract Law Notes
1,511 total pages
744 purchased

Contract law notes fully updated for recent exams at Oxford and Cambrid...