Case Brief: Chappell & Co. Ltd. v. Nestle Co. Ltd.
Case Brief: Chappell & Co. Ltd. v. Nestle Co. Ltd. [1960] AC 87 (UK House of Lords)
Court:
House of Lords (United Kingdom)
Citation:
[1960] AC 87
Facts:
Nestlé launched a promotion offering customers a record (a music single) for 1 shilling and 3 chocolate bar wrappers.
Chappell & Co., the music publisher holding copyright on the record, sued Nestlé for copyright infringement.
Nestlé argued the wrappers given by customers did not constitute “consideration” for the contract of sale of the record.
The legal issue centered on whether the chocolate wrappers, though having no intrinsic monetary value, formed part of the “consideration” for the contract.
Issues:
Whether the wrappers supplied by customers alongside money can be considered valid “consideration” for a contract under English contract law.
Does consideration have to be adequate or can it be nominal or even something of no value?
Arguments:
Chappell & Co. (Plaintiff):
Argued that the chocolate wrappers formed part of the consideration because customers had to provide them to obtain the record.
Therefore, Nestlé had breached copyright by reproducing the music without a proper license.
Nestlé (Defendant):
Claimed the wrappers were merely a device to promote sales and had no real value, so did not amount to consideration.
Only the money paid was valid consideration.
Judgment:
The House of Lords held that the chocolate wrappers, though having little or no intrinsic value, did constitute part of the consideration.
It is not necessary for consideration to be adequate; it only needs to be something of value in the eyes of the law.
The requirement of consideration is satisfied if the promisor receives something in return, even if it is of minimal value.
Thus, the wrappers were part of the consideration supporting the contract.
Legal Principle:
Consideration must be sufficient but need not be adequate.
Something of nominal or no intrinsic value can still be valid consideration if it forms part of the bargain.
Significance:
This case is a foundational precedent on the doctrine of consideration in English contract law.
It clarified that courts do not assess the adequacy of consideration, only its presence.
It remains frequently cited in cases involving contractual consideration disputes.
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