L Schuler AG v Wickman Machine Tool Sales Ltd [1973]
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L Schuler AG v Wickman Machine Tool Sales Ltd [1973] UKHL 2 revolved around the right to terminate a contract and the interpretation of a specific clause, Clause 7(b).
Wickman Machine Tool Sales Ltd (Wickman) claimed that Schuler AG wrongfully terminated their contract, which involved Wickman acting as the sole representative for Schuler's panel presses. The contract required Wickman to visit the six largest UK car manufacturers weekly to solicit orders for panel presses, as specified in Clause 7(b). Additionally, Clause 11 allowed either party to terminate the agreement if the other party was in material breach, provided they did not remedy the breach within 60 days' notice.
Wickman initially failed to make the required visits, which was waived by Schuler at first. However, when Wickman started making some but not all the visits, Schuler terminated the contract. Wickman sued, arguing that Schuler was not entitled to terminate.
The House of Lords, in a majority decision, held that Schuler was not entitled to terminate the contract. The key point of contention was whether Clause 7(b) constituted a condition or a term of the contract. The majority concluded that it was not a condition but a term, and it needed to be read in conjunction with Clause 11.
The majority emphasised that the use of the word "condition" in the contract was not conclusive evidence of the parties' intention to make it a condition. Instead, they looked at the contract as a whole to determine the parties' intentions. Lord Reid, in his judgment, highlighted the unreasonableness of the result that would occur if Schuler's contention (that failure to make even one visit entitled them to terminate) was accepted. He argued that if parties had given any thought to the matter, they must have realised the probability of some visits being impossible out of the required 1,400 visits.
Lord Wilberforce dissented from the majority, maintaining that Clause 7(b) should be considered a condition, and Schuler should have been able to terminate the contract. He disagreed with the majority's interpretation and stressed that the clause's specific requirements indicated a standard of aggressive punctuality and efficiency.
In summary, the case turned on the interpretation of whether Clause 7(b) was a condition or a term and how it should be read in conjunction with Clause 11 regarding termination. The majority held that it was a term, and termination required notice and a 60-day opportunity to remedy the breach.
Wickman Machine Tool Sales Ltd (Wickman) claimed that Schuler AG wrongfully terminated their contract, which involved Wickman acting as the sole representative for Schuler's panel presses. The contract required Wickman to visit the six largest UK car manufacturers weekly to solicit orders for panel presses, as specified in Clause 7(b). Additionally, Clause 11 allowed either party to terminate the agreement if the other party was in material breach, provided they did not remedy the breach within 60 days' notice.
Wickman initially failed to make the required visits, which was waived by Schuler at first. However, when Wickman started making some but not all the visits, Schuler terminated the contract. Wickman sued, arguing that Schuler was not entitled to terminate.
The House of Lords, in a majority decision, held that Schuler was not entitled to terminate the contract. The key point of contention was whether Clause 7(b) constituted a condition or a term of the contract. The majority concluded that it was not a condition but a term, and it needed to be read in conjunction with Clause 11.
The majority emphasised that the use of the word "condition" in the contract was not conclusive evidence of the parties' intention to make it a condition. Instead, they looked at the contract as a whole to determine the parties' intentions. Lord Reid, in his judgment, highlighted the unreasonableness of the result that would occur if Schuler's contention (that failure to make even one visit entitled them to terminate) was accepted. He argued that if parties had given any thought to the matter, they must have realised the probability of some visits being impossible out of the required 1,400 visits.
Lord Wilberforce dissented from the majority, maintaining that Clause 7(b) should be considered a condition, and Schuler should have been able to terminate the contract. He disagreed with the majority's interpretation and stressed that the clause's specific requirements indicated a standard of aggressive punctuality and efficiency.
In summary, the case turned on the interpretation of whether Clause 7(b) was a condition or a term and how it should be read in conjunction with Clause 11 regarding termination. The majority held that it was a term, and termination required notice and a 60-day opportunity to remedy the breach.
