Chemidus Wavin Ltd. v. Sociéte pour la Transformation et L'Exploitation des Resines Industrialles SA (1973) C.M.L.R. 514 CA

Citation:Chemidus Wavin Ltd. v. Sociéte pour la Transformation et L'Exploitation des Resines Industrialles SA (1973) C.M.L.R. 514 CA

Link to case on WorldLII (reference).

Rule of thumb:If there is a term in a contract which is in breach of statute, is the whole contract void? Just because a term of a contract is in breach of statute/public policy does not necessarily invalidate the whole contract, although if it is a particularly serious breach or a key term then it might do so.

Judgment:

"(18) So, the position appears clearly to be this, that where in a contract there are certain clauses which are annulled by reason of their being in contravention of Article 85, paragraph (l), of the Treaty, one must look at the contract with those clauses struck out and see what the effect of that is in the light of the domestic law which governs the particular contract. In the present case, we have to consider what effect the invalidity, if any, of the clauses in the licence agreement by reason of Article 85 would have upon that contract as a whole. Whether it is right to regard the matter as one of severance of the contract or not, I do not think it is necessary for us to consider now. I doubt whether it is really a question of severance in the sense in which we in these Courts are accustomed to use that term in considering whether covenants contained in contracts of employment and so forth are void as being in restraint of trade, and, if they are to any extent void, whether those covenants can be severed so as to save part of the covenant, although another part may be bad. It seems to me that, in applying Article 85 to an English contract, one may well have to consider whether, after the excisions required by the Article of the Treaty have been made from the contract, the contract could be said to fail for lack of consideration or on any other ground, or whether the contract would be so changed in its character as not to be the sort of contract that the parties intended to enter into at all’, Buckley L.J at 519

Warning: This is not professional legal advice. This is not professional legal education advice. Please obtain professional guidance before embarking on any legal course of action. This is just an interpretation of a Judgment by persons of legal insight & varying levels of legal specialism, experience & expertise. Please read the Judgment yourself and form your own interpretation of it with professional assistance.