Chappell & Co Ltd v Nestlé Co Ltd
Something of little or no real value, such as chocolate wrappers, can be good consideration.
Facts
Nestlé ran a promotion offering a record of the song Rockin' Shoes to anyone who sent in 1s 6d together with three wrappers from Nestlé's sixpenny chocolate bars. On receipt, Nestlé threw the wrappers away. Chappell owned the copyright in the song. Under the Copyright Act 1956, a manufacturer could make records for retail sale without the owner's consent on paying a royalty of 6.25 per cent of the ordinary retail selling price. Chappell argued that the records were not being sold for a money price, because the wrappers were part of the price, so the statutory scheme did not apply and Nestlé was infringing copyright.
Legal principle
The House of Lords held, by a majority, that the wrappers were part of the consideration, so the records were not sold at an ordinary retail selling price in money, and Nestlé was infringing Chappell's copyright. Consideration need not be adequate, and a party may stipulate for something that has little or no value to it, as long as it is what was bargained for. The wrappers had value to Nestlé because the promotion was designed to increase sales of chocolate. Lord Somervell said that a peppercorn does not cease to be good consideration if the promisee does not like pepper and will throw away the corn.
Related cases on consideration and promissory estoppel
- Central London Property Trust Ltd v High Trees House Ltd [1947] KB 130
- Collier v P & MJ Wright (Holdings) Ltd [2007] EWCA Civ 1329, [2008] 1 WLR 643
- Combe v Combe [1951] 2 KB 215
- Currie v Misa (1875) LR 10 Ex 153
- D & C Builders Ltd v Rees [1966] 2 QB 617
- Foakes v Beer (1884) 9 App Cas 605
- Glasbrook Bros Ltd v Glamorgan County Council [1925] AC 270
- Hartley v Ponsonby (1857) 7 E & B 872
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