dunlop vs selfridge

5/12/2018 Dunlop Vs Selfridge - slidepdf.com

http://slidepdf.com/reader/full/dunlop-vs-selfridge 1/3

AT THE UNITED K INGDOM HOUSE OF LORDS

PRESENT1. LORD DUNEDIN

2. LORD ATKINSON

3. LORD PARKER OF WADDINGTON

4. LORD SUMNER

5. LORD PARMOOR

Dunlop Pneumatic Tyre Co Ltd

- VERSUS -

Selfridge and Co Ltd

The plaintiff, Dunlop and Co Ltd is a tyre manufacturing company, established

in the year 1889 and is based in United Kingdom. The company offers its

products in the market at a fixed or standard price as per its r

esale price

maintenance (RPM) scheme. At the time of offering its products to distributors

or retailers the company makes a contract in whose terms and conditions

(T&Cs) it is clearly mentioned that the distributors are bound to follow the

recommendations and instructions of the company.

The Terms mentioned in its contract were that none of the dealers are

authorized to sell the tyres below its recommended retail price and that they

would get the same undertaking from a purchaser and if the retailers did sell

below the list price, they would have to pay £5 a tyre in liquidated damages to

Dunlop.

In 1945 Dunlop & Co Ltd sold some tyres to one of its dealers, Dew & Co on

the same terms and conditions who after making the purchase sold these



tyres to the Defendant, Selfridge & Co Ltd on the same terms and conditions

but without gaining any written undertaking from them.

Later on Selfridge and Co Ltd sold those tyres below the recommended price

hence Dunlop and Co Ltd sued to enforce the contract by injunction andclaimed its damages while Selfridge argued it could not enforce the contract

between itself and Dew and Co and had not agreed to the conditions.

PLAINTIFF’S ARGUMENTS

Dunlop’s point of view was that since the company had clearly stated in its

terms and conditions that the sale of the tyres cannot be held below the price

recommended as per its resale price maintenance (RPM) scheme, Selfridge is

responsible for not abiding by them and thus it claims injunction against

Selfridge & Co Ltd.

DEFENDANT’S ARGUMENTSViscount Haldane; the defendant’s lawyer, claimed that Dunlop Pneumatic

Tyres & Co Ltd is not entitled to sue Selfridge and he based his argument on

two fundamental principles in law which were significant enough for the lords

to make their decision.

- Doctrine of Privity

This requires that only a party within a contract can sue and be

sued.

- Doctrine of Agency

This requires that the principal not named in the contract can only

be sued if the promisee was contracted as an agent.



DECISION OF THE HOUSE OF LORDS

In application to the facts, the Lords 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 to sue

Selfridge for injunction and damages ended in the Selfridge wining the case.

RECOMMENDATION

After carefully analyzing the facts and figures available on the internet

regarding the law suit we have come up with a suggestion for the case.

- Dunlop Pneumatic Tyres and Company limited should have filed a law

suit against Dew and Company since it failed to acquire an undertaking

from the Defendant that it will abide by the terms and conditions set by

the plaintiff who afterwards may have taken action against the

defendant since Dew was engaged in the dealings with Selfridge, not

Dunlop.

dunlop vs selfridge

Documents