Chappell & Co Ltd v The Nestlé Co Ltd
Chappell & Co Ltd v The Nestlé Co Ltd [1959] 2 All ER 701
House of Lords Nestlé, manufacturers of wrapped chocolate bars, advertised for sale, as part of an advertising campaign, the record 'Rockin' Shoes'. The price of the record was 1s 6d plus three wrappings from their 6d chocolate bars. Chappell, who were the sole licensees of the copyright of 'Rockin' Shoes', claimed that Nestlé had infringed their copyright and sought injunction and damages. Nestlé claimed that they were entitled to supply records without the permission or license of the appellants because they were authorized to do so by the Copyright Act 1956 s.8 which permitted them to sell the records provided they paid to the copyright owner 'six and one quarter per cent of the ordinary retail selling price of the record.' The House of Lords held by a majority of three to two that the Act required that the consideration for the records be wholly in money. The issue, then, before the court was whether the wrappers formed part of the consideration for the records. Lord Reid I can now turn to what appears to me to be the crucial question in this case: was the 1s 6d an 'ordinary retail selling price' within the meaning of s.8? That involves two questions, what was the nature of the contract between the respondents Nestlé and a person who sent 1s 6d plus three wrappers in acceptance of their offer, and what is meant by 'ordinary retail selling price'in this context. To determine the nature of the contract, one must find the intention of the parties as shown by what they said and did. The respondents Nestlé's intention can hardly be in doubt. They were not setting out to trade in gramophone records. They were using these records to increase their sales of chocolate. Their offer was addressed to everyone. It might be accepted by a person who was already a regular buyer of their chocolate; but, much more important to them, it might be accepted by people who might become regular buyers of
House of Lords Nestlé, manufacturers of wrapped chocolate bars, advertised for sale, as part of an advertising campaign, the record 'Rockin' Shoes'. The price of the record was 1s 6d plus three wrappings from their 6d chocolate bars. Chappell, who were the sole licensees of the copyright of 'Rockin' Shoes', claimed that Nestlé had infringed their copyright and sought injunction and damages. Nestlé claimed that they were entitled to supply records without the permission or license of the appellants because they were authorized to do so by the Copyright Act 1956 s.8 which permitted them to sell the records provided they paid to the copyright owner 'six and one quarter per cent of the ordinary retail selling price of the record.' The House of Lords held by a majority of three to two that the Act required that the consideration for the records be wholly in money. The issue, then, before the court was whether the wrappers formed part of the consideration for the records. Lord Reid I can now turn to what appears to me to be the crucial question in this case: was the 1s 6d an 'ordinary retail selling price' within the meaning of s.8? That involves two questions, what was the nature of the contract between the respondents Nestlé and a person who sent 1s 6d plus three wrappers in acceptance of their offer, and what is meant by 'ordinary retail selling price'in this context. To determine the nature of the contract, one must find the intention of the parties as shown by what they said and did. The respondents Nestlé's intention can hardly be in doubt. They were not setting out to trade in gramophone records. They were using these records to increase their sales of chocolate. Their offer was addressed to everyone. It might be accepted by a person who was already a regular buyer of their chocolate; but, much more important to them, it might be accepted by people who might become regular buyers of