OCR A2 Contract Law Special Studies Paper - Restraint of Trade - Home Counties Dairies - 16 Marker

The case involves the law use of the Blue Pencilling aproach. The case involved HCD restraining/ preventing Skilton selling milk or dairy produce to customers of HCD. It was held that "dairy produce" was too wide and it was carved out.

The case is significant as it shows how the courts will impose a restraint if there is an "interest meriting protection", but also sever a clause if precise language has been used.

The court in this case blue pencilled despite the traditional attitude of judges severing where parties are in an unequal bargaining position. The case represents how the judges have taken a broad approach in interpreting a clause creating a result which reflects the parties intentions in creating justice between the parties.

The case can be contrasted with Lyne-Pirkis v Jones where they refused to sever because imprecise language was used as blue pencilling wasn't available. However, the courts approach to blue pencilling can be seen in cases such as "Goldsoll v Goldman", where parties were in an equal bargaining position and the cour left a clause preventing the vendor from participating in selling imitation jewellery in the UK.

The lords also blue pencilled in Esso where the courts struck down the 21 year agreement as it was too excessive in nature and it wasn't in the interests of the parties or the public.