Schuler AG v Wickman Machine Tool Sales Ltd
Calling a term a condition does not necessarily make it one in the technical sense if that would produce an unreasonable result.
Facts
Schuler, a German manufacturer, gave Wickman the sole right to sell its panel presses in England for four and a half years. Clause 7(b) stated that it shall be a condition of this agreement that Wickman would send its representatives to visit each of six named large car manufacturers at least once a week to solicit orders, which meant about 1,400 visits over the life of the agreement. Wickman failed to make a few of the visits, and Schuler claimed that it was entitled to terminate the agreement because clause 7(b) was a condition.
Legal principle
The House of Lords held, by a majority, that Schuler was not entitled to terminate. Although the word condition was used, that did not conclusively show that the parties intended any breach, however minor, to entitle Schuler to end the agreement. The more unreasonable the result, the more unlikely it is that the parties intended it, and it would be absurd for Schuler to be able to terminate a long agreement because of a single missed visit, even where the failure was not Wickman's fault. Clause 7(b) was therefore not a condition in the technical sense, and the agreement contained a separate termination clause for material breaches that had not been remedied.
Related cases on terms of the contract
- Arnold v Britton [2015] UKSC 36, [2015] AC 1619
- Barton v Morris [2023] UKSC 3, [2023] AC 684
- Bettini v Gye (1876) 1 QBD 183
- Braganza v BP Shipping Ltd [2015] UKSC 17, [2015] 1 WLR 1661
- Bunge Corp v Tradax Export SA [1981] 1 WLR 711
- Chartbrook Ltd v Persimmon Homes Ltd [2009] UKHL 38, [2009] 1 AC 1101
- Dick Bentley Productions Ltd v Harold Smith (Motors) Ltd [1965] 1 WLR 623
- Hongkong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd [1962] 2 QB 26
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