Chappell & Co Ltd v Nestle Co Ltd
Encyclopedia
Chappell & Co Ltd v Nestle Co Ltd [1960] AC 87 is an important English contract law
case, where the House of Lords confirmed the traditional doctrine that consideration must be sufficient but need not be adequate.
owned the copyright
to ‘Rockin’ shoes’ (by The King Brothers
). Nestle
was giving away records of it to people who sent in three wrappers from 6d chocolate bars, as well as 1s 6d. The Copyright Act 1956
s 8 said a 6.25% royalty needed to be paid on the ‘ordinary retail selling price’ to the owners of copyrights. Nestle said 1s 6d was the ordinary retail selling price, but Chappell & Co argued that it should be more and sought an injunction for breach of CA 1956 s 8. In this way the question arose as to whether the wrappers were consideration for the records. Upjohn granted an injunction. The Court of Appeal reversed the decision and Chappell & Co appealed.
Lord Somervell said the following.
Viscount Simonds and Lord Keith delivered dissenting judgments.
English contract law
English contract law is a body of law regulating contracts in England and Wales. With its roots in the lex mercatoria and the activism of the judiciary during the industrial revolution, it shares a heritage with countries across the Commonwealth , and the United States...
case, where the House of Lords confirmed the traditional doctrine that consideration must be sufficient but need not be adequate.
Facts
Chappell & Co.Chappell & Co.
Chappell & Co. was an English company that published music and manufactured pianos.-History:It was founded in 1810 by Samuel Chappell in partnership with music professors Francis Tatton Latour and Johann Baptist Cramer. Cramer was also a well-known London composer, teacher and pianist...
owned the copyright
Copyright
Copyright is a legal concept, enacted by most governments, giving the creator of an original work exclusive rights to it, usually for a limited time...
to ‘Rockin’ shoes’ (by The King Brothers
The King Brothers
The King Brothers were a British pop vocal trio popular in the late 1950s and early 1960s. They are best remembered for their cover versions of "Standing on the Corner" and "A White Sport Coat ".-Career:...
). Nestle
Nestlé
Nestlé S.A. is the world's largest food and nutrition company. Founded and headquartered in Vevey, Switzerland, Nestlé originated in a 1905 merger of the Anglo-Swiss Milk Company, established in 1867 by brothers George Page and Charles Page, and Farine Lactée Henri Nestlé, founded in 1866 by Henri...
was giving away records of it to people who sent in three wrappers from 6d chocolate bars, as well as 1s 6d. The Copyright Act 1956
Copyright Act 1956
The Copyright Act 1956 is an Act of the Parliament of the United Kingdom which received its Royal Assent on 5 November 1956. The Copyright Act 1956 expanded copyright law in the UK and was passed in order to bring UK copyright law in line with international copyright law and technological...
s 8 said a 6.25% royalty needed to be paid on the ‘ordinary retail selling price’ to the owners of copyrights. Nestle said 1s 6d was the ordinary retail selling price, but Chappell & Co argued that it should be more and sought an injunction for breach of CA 1956 s 8. In this way the question arose as to whether the wrappers were consideration for the records. Upjohn granted an injunction. The Court of Appeal reversed the decision and Chappell & Co appealed.
Judgment
The majority of the House of Lords (Lord Reid, Lord Tucker and Lord Somervell) held that the wrappers were part of the consideration, and so Nestle was in breach of the Copyright Act 1956, by failing to pay royalties reflecting the extra cost of the wrappers.Lord Somervell said the following.
Viscount Simonds and Lord Keith delivered dissenting judgments.
See also
- Bret v JSBret v JSBret v JS & Wife Cro Eliz 756 is a formative English contract law, which held that a good consideration for courts to enforce contracts did not include promises for "natural affection".-Facts:...
(1600) Cro Eliz 756, love and affection not good consideration - Evans v Llewellin (1787) 1 Cox CC 333, share of estate sale set aside on grounds of very low price
- Thomas v Thomas (1842) 2 QB 851, there must be sufficient consideration "in the eyes of the law"
- Shadwell v ShadwellShadwell v ShadwellShadwell v Shadwell [1860] is an English contract law case, which held that it would be a valid consideration for the court to enforce a contract if a pre-existing duty was performed, so long as it was for a third party.-Facts:...
[1860] EWHC CP J88, performing a pre-existing duty to a third party still good consideration, or that a request to perform an act already undertaken can be implied - Fry v LaneFry v LaneFry v Lane 40 Ch D 312 is an English contract law case relating to exploitation of weakness, allowing escape from a contract.-Facts:...
(1888) 40 ChD 312, suggested that inadequate consideration not relevant - In re Wragg LtdIn re Wragg LtdIn re Wragg Ltd [1897] 1 Ch 796 is a UK company law case, also relevant for English contract law, concerning shares, and the rule that shares should be exchanged for consideration that is in some sense at least sufficient, not necessarily adequate.-Facts:...
[1897] 1 Ch 796, company law case, where Court of Appeal refused to impeach a share sale transaction alleged to have been at an undervalue
- Batsakis v. DemotsisBatsakis v. DemotsisBatsakis v. Demotsis, 226 S.W.2d 673 , was a 1949 decision by the Texas Court of Appeals, United States which was an appeal from a judgment of the 57th judicial District Court of Bexar County, Texas...
, 226 S.W.2d 673 (1949), an American case in which the court held that a few drachma was good consideration