Dunlop Pneumatic Tyre Co Ltd v Selfridge & Co Ltd

Dunlop Pneumatic Tyre Co Ltd v Selfridge & Co Ltd
Court	House of Lords
Citation(s)	[1915] UKHL 1, [1915] AC 847
Case opinions
Viscount Haldane
Keywords
Resale price maintenance, privity of contract

Dunlop Pneumatic Tyre Co Ltd v Selfridge & Co Ltd [1915] UKHL 1 is an English contract law case, with relevance for UK competition law decided in the House of Lords. It established that an agreement for resale price maintenance was unenforceable as a matter of privity of contract.

Under the modern law of the Competition Act 1998 or EU competition law it would be regulated as an anticompetitive agreement.

Facts

Dunlop made tyres. It did not want them sold cheaply but to maintain a standard resale price. It agreed with its dealers (in this case Dew & Co) not to sell them below its recommended retail price. It also bargained for dealers to get the same undertaking from a purchaser. If retailers did sell below the list price, they would have to pay £5 a tyre in liquidated damages to Dunlop. Dunlop thus was a third party to a contract between Selfridge and Dew. When Selfridge sold the tyres at below the agreed price, Dunlop sued to enforce the contract by injunction and claimed damages. Selfridge argued it could not enforce the burden of a contract between itself and Dew, which Selfridge had not agreed to.

At trial, the judge found in favour of Dunlop. In appeal the damages and injunction were reversed, saying that Selfridge was not a principal or an agent and thus was not bound. The issue put to the court was whether Dunlop could get damages from Selfridge without a contractual relationship.

Judgment

Viscount Haldane based his argument on three fundamental principles in law. First, the doctrine of privity requires that only a party to a contract can sue. Second, the doctrine of consideration requires a person with whom a contract not under seal is made is only able to enforce it if there is consideration from the promisee to the promisor. Third, the doctrine of agency requires that the principal not named in the contract can only be sued if the promisee was contracted as an agent.

In application to the facts, Haldane could not find any consideration between Dunlop and Selfridge, nor could he find any indication of an agency relationship between Dew and Selfridge. Consequently, Dunlop's action must fail.

See also

• English contract law
• Dunlop Pneumatic Tyre Co Ltd v New Garage & Motor Co [1915] AC 79, regarding contract termination

Notes

References