OCR A2 Contract Law - Special Studies Paper - Jan/June 2013 - Restraint of Trade 16 Markers (1)

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Preview of OCR A2 Contract Law - Special Studies Paper - Jan/June 2013 - Restraint of Trade 16 Markers (1)

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Restraint of Trade - Esso 16 Marker
The case involves the law on exclusive dealing arrangements within the ROT doctrine. The
case itself involved 2 garages exclusively buying petrol from Esso. It was held that the 4 1/2
year agreement was held to be reasonable and that the 21 year agreement was
unreasonable.
Restraint of Trade - Nordenfelt 16 Marker
The case involves the judges becoming involved in ROT clauses. The case itself involved the
The significant point of this case is that it is the leading case within the solus industry which selling of an arms business and the courts intervention into the clause. It was held that the
falls into the ROT doctrine, despite the original common law tendency regarding exclusive clause was held to be valid as it was justified to the test of reasonableness; however the
dealing arrangements as being void. The case is significant in developing the law as it latter part of the clause was held to be unreasonable.
represents a change in judicial attitude in dealing with transactions of this type. This is The significance of this case is that it is the leading case in ROT as it rebutted all the old
evident in Lord Wilberforce's statement where he states the court must take a "broad" common law position as being prima-facie void as they were contrary to public policy.
approach and be "fluid" (S1, L25-27).
The judges recognised in this case that the law was far too rigid and it must have interfered
with every day transactions, therefore the law was "relaxed". And some clauses were held to
The House of Lords applied the 2 conditions in "Nordenfelt v Maxim Nordenfelt", by using be reasonable if justified.
Lord Macnaughten's 2 conditions (S2, L30-33-). In doing so they found they could blue pencil.
This case represents the HofL's ability to blue pencil and striking down the 21 year Lord Macnaughten laid the test of reasonableness which is used to see if an ROT clause is
agreement as it wasn't in the interests of the parties and due to its precise language the valid. (State the 2 conditions - i.e. reasonable in the interests of parties and public - S2,
Lords were able to sever easily. L30-33). Shows a shift in judicial unity within the case itself as the decision made at first
instance was agreed by CofA and HofL.
The usual position where bargaining strengths need to be equal wasn't taken as precise The case is significant in contributing to the Law by setting precedent on the law on ROT as
language was used in an unequal bargaining contract. The 4 1/2 year agreement was held to later decisions have all applied the 2 conditions in finding whether an ROT clause is
be valid as Lord Reid said you'd be able to maintain a stable system of distribution, therefore reasonable or unreasonable e.g. in Mason, where it was unreasonable in paralysing earning
benefitting the economy and therefore the public. If this agreement was held to be valid, Esso capacities and in Fitch v Dewes, where the clause was held to be reasonable as it was in the
would be put in a vulnerable position as it's estimated that 90% of filling stations were in interests of the parties as it was protecting the client base.
exclusive dealing contracts.
The same points were raised in Alec Lobb v Total Oil, however in this case the 21 year
agreement was held to be valid due to the material difference in fact from Esso.

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Restraint of Trade - Mason 16 Marker Restraint of Trade - Lyne-Pirkis 16 Marker
The case involves the Law on ROT being applied in an employer/employee case. It The case involves the ROT clause being policed in an employer/employee
involved Mason being restrained/ prevented from working within a certain contract. The case itself involved a GP being restrained/ prevented from engaging
area/time/activity. It was held to be an unreasonable and therefore void. in "medical practice".…read more

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