Dunlop Pneumatic Tyre Co v New Garage Motor Co

Dunlop Pneumatic Tyre Co v New Garage Motor Co

DUNLOP PNEUMATIC TYRE CO LTD V NEW GARAGE MOTOR CO LTD

FACTS

Dunlop Pneumatic Tyre Co Ltd (‘Dunlop’) entered into a contract to sell tyres and other accessories to New Garage Motor Co Ltd (‘New’) on terms design to ensure that the tyres were not sold below the manufacturers listed price. New agreed to pay Dunlop “the sum of £5 for each and every tyre … sold in breach of this agreement, as and by way of liquidated damages and not as a penalty”. New sold tyres in breach of the agreement.

ISSUE

Whether the clause constituted a penalty and, consequently, was unenforceable.

FINDING

To continue reading this content, please complete the form below

End