CHAPPELL v NESTLE (1960) CONSIDERATION MUST BE SUFFICIENT, IT NEED NOT BE ADEQUATE: Adequacy of consideration

The claimants owned the copyright in a piece of music, 'Rockin' Shoes'. The defendants, Nestlé, arranged for copies of this tune to be manufactured into records, and offered these records to the public for 1s. 6d. plus three wrappers from their 6d. chocolate bars. Section 8 of the Copyright Act 1956 permitted the making of records for retail sale, provided that a royalty of (p. 134) 6¼ per cent on 'the ordinary retail selling price' was paid to the claimants. The claimants were informed that 1s. 6d. was the ordinary retail selling price. They sought an injunction claiming breach of copyright.

Held (Viscount Simonds and Lord Keith dissenting): The wrappers were part of the consideration for the sale of the records, even though of very trivial economic value and thrown away by Nestlé. Section 8 of the Copyright Act 1956 was intended to apply where a money sum was the entire consideration for the sale; since this sale was outside s. 8, there was a breach of copyright.

LORD SOMERVELL: The question, then, is whether the three wrappers were part of the consideration or, as Jenkins LJ held, a condition of making the purchase, like a ticket entitling a member to buy at a co-operative store.

I think they are part of the consideration. They are so described in the offer. 'They,' the wrappers, 'will help you…