| Esso Ltd v Harper’s Garage (Stourport) Ltd | |
|---|---|
 Stock image of a modern Esso garage in 2008. | |
| Court | House of Lords |
| Citations | UKHL 1, AC 269, 1 All ER 699, 2 WLR 871, 201 Estates Gazette 1043 |
| Court membership | |
| Judges sitting | Lord Reid, Lord Morris of Borth-y-Gest, Lord Hodson, Lord Pearce, Lord Wilberforce |
| Keywords | |
| Contract, illegality, restraint of trade | |
Esso Petroleum Co Ltd v Harper's Garage (Stourport) Ltd UKHL 1 is an English contract law case, concerning the restraint of trade through a tying arrangement.
Facts
Harper's Garage agreed to accept all petrol for its two stations from Esso for a long period of time, a solus agreement. It agreed to keep the garage open at all reasonable hours and not to sell it without ensuring that the buyer entered a similar agreement. One agreement was for 5 years, the other for 21 years.
Judgment
The House of Lords held that the 5-year agreement was valid and the 21-year agreement was invalid.
Lord Reid said he ‘would not attempt to define the dividing line between contracts which are and contracts which are not in restraint of trade’. It was preferable ‘to ascertain what were the legitimate interests of the which they were entitled to protect and then to see whether these restraints were more than adequate for that purpose.’
Significance
In Peninsula Securities Ltd v Dunnes Stores (Bangor) Ltd the Supreme Court invoked the Practice Statement to depart from Esso with Lord Wilson stating:
the objections to the test are that it has no principled place within the doctrine; that it has been consistently criticised for over 50 years and, although in some quarters loyally applied, the reasoning behind it has, to the best of my knowledge, scarcely been defended; and that the common law has been limping between the continuing authority of the test in our jurisdiction and its rejection in Australia and in parts of Canada.
See also
| Sources for illegality | |
|---|---|
| Everet v Williams (1725) noted in (1893) 9 LQR 197 | |
| Holman v Johnson (1775) 1 Cowp 341 | |
| Patel v Mirza UKSC 42 | |
| Hounga v Allen UKSC 47 | |
| Enderby Town FC Ltd v Football Association Ltd Ch 591 | |
| Arbitration Act 1996 sections 68-69, 87 | |
| Nordenfelt v Maxim, Nordenfelt Guns Ltd AC 535 | |
| Esso Ltd v Harper's Garage (Stourport) Ltd UKHL 1 | |
| Schroeder Music Publishing Co Ltd v Macaulay 1 WLR 1308 | |
| Alec Lobb (Garages) Ltd v Total Oil Ltd EWCA Civ 2 | |
| Pearce v Brooks (1866) LR 1 Ex 213 | |
| See Illegality in English law |
Notes
- UKSC 36, case page
- Paragraph 50, full judgment