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White and Carter (Councils) Ltd v McGregor

[1962] AC 413

Case summary last updated at 04/01/2020 12:35 by the Oxbridge Notes in-house law team.

Judgement for the case White and Carter (Councils) Ltd v McGregor

A contracted with R’s representative to advertise him for money, including a clause that if R failed to pay money due for 4 weeks, then he had to pay the money that would be owed for the whole duration of the contract. Once the contract was given effect, R asked A to cancel the contract since his representative had misrepresented him and then, when A refused, he failed to pay for 4 weeks. A sued for the whole amount that would be owed under the clause. HL held that the contract was valid and A was entitled to take advantage of the contract. A was not obliged to accept R’s renunciation and sue for damages. 
 
IN OBITER: Lord Reid said that it may be that where the innocent party has no interest in the contract being carried out as opposed to claiming damages he may be forced to accept damages rather than carrying on with the contract. “If a party has no interest to enforce a stipulation, he cannot in general enforce it: so it might be said that, if a party has no interest to insist on a particular remedy, he ought not to be allowed to insist on it.” This is dodgy: it would require a judgment call by courts as to whether an action is in a party’s business interests + it allows a de facto effective repudiation of the contract by a party who is not entitled to do so. However in this case it was clearly in A’s interest to enforce the contract. 
 
IN OBITER: Lord Hodson: Equity does not release a party from an improvident contract and there is no duty on the innocent party to vary it at the behest of the other party. 

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