Dunlop Pneumatic Tyre Co Ltd v Selfridge & Co Ltd

Dunlop Pneumatic Tyre Co Ltd v Selfridge & Co Ltd [1915] UKHL 1 (26 April 1915), [1915] AC 847 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.[1]

Dunlop Pneumatic Tyre Co Ltd v Selfridge & Co Ltd
CourtHouse of Lords
Full case nameDunlop Pneumatic Tyre Company, Limited v Selfridge and Company, Limited
Decided26 April 1915
Citation(s)
Transcript(s)House of Lords transcript
Case history
Appealed fromCourt of Appeal
Court membership
Judges sitting
Keywords

It should not be confused with Dunlop Pneumatic Tyre Co Ltd v New Garage & Motor Co Ltd,[2] a separate decision of the House of Lords in the preceding year relating to substantially the same resale price maintenance agreement but ruling on the concept of liquidated damages.

Under the modern law of the Competition Act 1998 or EU competition law an agreement like this 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 their retailers (in this case, Selfridge). If retailers did sell below the list price, they would have to pay £5 per tyre in liquidated damages to Dunlop. Dunlop thus was the 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 that Dunlop could not enforce the burden of a contract between Dunlop and Dew, which Selfridge had not agreed to.

At trial, the judge of the first instance, found in favour of Dunlop. At appeal the damages and injunction were reversed, saying that Selfridge was not a principal or an agent and thus was not bound.

Judgment

The House of Lords held that Dunlop could not claim damages from Selfridge for selling below its resale price because it had no contractual relationship.

Viscount Haldane, said there were three principles:

  • 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 a consideration from the promisee to the promisor.
  • Third, the doctrine of agency requires that a principal not named in the contract (an undisclosed principal) can only be sued if the promisor was contracted as an agent.

In application to the facts, Haldane could not find consideration between Dunlop and Selfridge, nor could he find any indication of an agency relationship between Dew and Selfridge, for which separate consideration from that paid contractually by Selfridge to Dew would need to have been found. Consequently, Dunlop's action must fail into the jungle.

Lord Dunedin, Lord Atkinson, Lord Parker of Waddington, Lord Sumner, and Lord Parmoor agreed.

See also

Notes
  1. "Dunlop Pneumatic Tyre Co Ltd v Selfridge & Co Ltd [1915] UKHL 1 (26 April 1915)". Judgmental.
  2. Dunlop Pneumatic Tyre Co Ltd v New Garage & Motor Co Ltd [1914] UKHL 1 (1 July 1914)
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