WK 8 - Case law Flashcards
Nordenfelt v Maxim Nordenfelt Guns and Ammunitions Co Ltd 1894
25 year no trade
- Restrains of trade and interference with individual liberty of action may be justified by the special circumstances of a particular case
- Only if justification is reasonable [in reference to interests of parties/public]
- To afford adequate protection to the party in whose favour it is imposed whilst its also in no way injurious to the public
Bridge v Deacons
Sale of business: reasonableness and public policy
Seller agrees to sell business on, agreeing not to compete. Law upholds this.
Public interest cannot be revoked.
Partner left firm. Did term go beyond particular role in firm?
Results cannot be transferred on grounds it would make purchaser insecure.
Ascertain the legitimate interests which the employer is entitled to protect then test whether the particular restraint is more than adequate for that purpose.
Herbert Morris v Saxelby 1916
Employment: Left school to work in business. Restraint on working in UK. Bit dramatic.
Bluebell Apparel Ltd v Dickinson 1978
(Wrangler and Levi’s)
- 2 year worldwide restriction
- Confidential info? Implied terms in contract of employment
- Trade secrets?
- Business methods and organisation?
Scottish Farmers Dairy Co (Glasgow) Ltd v McGhee 1933
Milkman
- 2-year one mile radius restriction against competition
- Competition vs poaching clients
- Business connection
Tilman v Egon Zehnder Ltd 2019
- ‘[not] directly or indirectly engage or be concerned or interested in any business carried on in competition with..’
- In Scotland, a two-part test:-
○ Can the clause be removed without modifying what remains?
^ The blue pencil test [think: topple tower]
Does removal alter the contract so that it is no longer the sort of contract entered into by the parties?
Stewart v Stewart 1899
Photography interdict
- Photography business in Elgin
- Restrictive Covenant - within 20 miles of Elgin
- Stewart 2 (assistant) set up business in competition
- Stewart 1 (former employer) sought to interdict him
- Was the restrictive covenant reasonable to protect S 1’s legitimate interests?-
Dallas McMillan & Sinclair v Simpson 1989
- Partnership agreement: Restrictive covenant within 20 miles of Glasgow for 5 years.
Is this reasonable?
Prosoft Resources v Griffiths 1999
Employee contract: Restrictive covenant
- Working for anyone else in the Highlands if it involved disclosing or using confidential business info
- Obtained a job as a consultant to a client of Prosoft
- The courts refused interdict
A/B Karishamns Oliefabriker v Monarch Steamship Co Ltd 1949
General rule of law of damages - party injured by other party’s breach is entitled to compensation but for breach
Clydebank Engineering & Shipbuilding Co Ltd v Castaneda (1906)
Late boats £500
- Four torpedo boats
- Delivery several months late
- The penalty for late delivery £500 per week for each vessel
- Agreed between parties; liquidated damages
Dunlop Pneumatic Tyre Co Ltd v New Garage & Motor Co Ltd 1915
- Sum agreed to be paid if breached.
- Changing marks on tyre/selling to private customers at reduced price would cause liquidated damages
- Terms not conclusive
- Punishment v genuine pre-estimate of loss
- Nature of clause to be judged at time contract made
Hill v Stewart Milne Group and Gladedale (Northern) Ltd [2011] - modern approach veto liquidated damages
- At the date contract was concluded, is the clause ‘exorbitant and unconscionable and designed to operate in terrorem?’ [by way of threat or intimidation]
- Onus [duty] to party seeking to argue clause is a penalty
- Cogent evidence must be provided
Cavendish Square Holding v Talal El Makdessi
- Right to future payments forfeited
- Right to acquire balance of shares at a low price
- ‘The clause is in reality a price adjustment clause… [it determines] Cavendish’s primary obligations, i.e. those which fix the price, the manner in which the price is calculated and the conditions on which different parts of the price are payable.’
- ‘The goodwill of this business was critical to its value to Cavendish, and the loyalty of Mr Makdessi…was critical to the goodwill.’
ParkingEye Ltd v Beavis 2015
Overstay
- Payment for overstaying - £85
- 20 signs in carpark
- Consumer Rights Act 2015 s.62(5) and s.67
- C-415/11 Aziz v Caixa d’Estalvis de Catalunya [2013] 3 CMLR 5
^ EU law overrides national law in this case. - Is clause punitive? Courts ruled £85 was not unfair.
Note: Individual negotiation. Term was fair.
