Book contents
- Frontmatter
- General Editors’ Preface
- Acknowledgements
- Contents
- List of Cases
- List of Legislation
- List of Abbreviations
- List of Contributors
- PART I INTRODUCTORY MATTERS
- PART II CASE STUDIES
- PART III GENERAL CONCLUSIONS
- References
- Appendix I The Editorial Instructions for the National Reporters
- Appendix II The Questionnaire
- Index
Case 10 - The Machine
Published online by Cambridge University Press: 11 February 2021
- Frontmatter
- General Editors’ Preface
- Acknowledgements
- Contents
- List of Cases
- List of Legislation
- List of Abbreviations
- List of Contributors
- PART I INTRODUCTORY MATTERS
- PART II CASE STUDIES
- PART III GENERAL CONCLUSIONS
- References
- Appendix I The Editorial Instructions for the National Reporters
- Appendix II The Questionnaire
- Index
Summary
‘Bingham’ is a company specialising in the development of industrial machinery to help businesses become more economically efficient. Bingham enters into a contract with ‘Peel’ in terms of which Bingham develops a custom-made machine that rationalises Peel’s production of copper wire which it sells to the construction industry. Clause 2 provides that, in return, Peel is due to pay a purchase price consisting of both a modest initial sum for the development of the machine and an additional 35% of the profits made by Peel by using the device over the next five years. Bingham and Peel have agreed to use a method by which they calculate the 35% of the profit – there is no dispute on this point. After Peel has paid the initial sum and Bingham has manufactured and delivered the machinery, time passes, and Bingham hears nothing from Peel. Bingham contacts Peel on several occasions throughout the next year. The answer from Peel is always the same: Peel has chosen not to use the machine. Therefore, Peel reasons, there is no profit from which to calculate Peel’s payment of 35% to Bingham. Bingham is very unhappy about this, having calculated the overall profit from the transaction assuming the use of the machine by Peel. In fact, as matters stand, Bingham contends, this will be a losing contract. Bingham further argues that, even though there is no clause in the contract which binds Peel to make use of the machine, Peel must be understood to have, in effect, taken it upon itself to pay more than merely the initial sum. To this end, Bingham had instructed an independent accountant to produce a report which estimates the amount of profit which would have been earned had the machine been used. In addition, Bingham continues, because Peel made the promise to pay 35%, Bingham was justified in expecting Peel to actually use the machine. Finally, Bingham concludes, it is simply not fair to interpret Clause 2 as Peel advocates.
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- Information
- Interpretation of Commercial Contracts in European Private Law , pp. 371 - 402Publisher: IntersentiaPrint publication year: 2020