WAS THERE A CONTRACT?

Taranaki Daily News, 11 June 1930, Page 9

WAS THERE A CONTRACT?

ARGUMENT-ON A “CASE STATED.” BUTTERMILK SUPPLY IN\'OLVED. Argument on a “case staled” to decide whether there was a contract to supply buttermilk for a certain period was taken yesterday before Mr. Justice Blair, who reserved judgment. Upon his decision rests the point whether the action between Norman Alfred and Marjery Maire Arthur and the Wanganui Fresh Food Company will go on next sesr sion. This is a claim for £lOOO representing loss on pigs through alleged failure to comply with an agreement to supply buttermilk. Mr. L. M. Moss appeared for the plaintiffs, ’ and Mr. A. A. Bennett for the company. Mr. Moss pointed out that the company’s statement of defence alleged the company was not bound to supply plaintiffs with buttermilk for a defined period, or in any particular quantity. Counsel admitted his clients had to take the risk

of variation in supply, but denied that they must take the risk of stoppage. The agreement with the company clearly imported an undertaking that the company would sell in the future- buttermilk foi’ five years.

The circumstances, said Mr. Moss, were that on August G, 1927, Arthur, in reply to an advertisement by the company. tendered for its output of buttermilk for use on iris farm. His tender was £34 for the output for one year, On August 18, 1927, he entered an agreement to take the buttermilk for two years, with the right to extend the agreement. Counsel maintained that was an express contract for two years. No one else but Arthur could receive buttermilk from the company during that period. In 1928, he continued, fresh negotiations took place. The old contract was cancelled and a new one made. This provided that Arthur, upon the payment of £25 a year, was to receive the complete output for five years. In addition, he was to have the right to extend the arrangement for a further terra. Counsel maintained that that document gave invitation to Arthur to go ahead with his farming operations on the understanding that he was to he supplied with buttermilk for the definite period of five years.

The company closed down on September 2, 1929, owing to its supply having been reduced by competition from the Mokau Dairy Company and other sources. The point, was whether there was a contract and, if so, did the company have the right to close down during the period of five years; ° His Honour: That is the whole question. Arthur-agreed to take the buttermilk for five years. Was there a duty on the part of the company to keep the factory going for five years? Mr. Moss: Yes, that is the whole question.

He snbinil.ted that Arthur would be in the position of having paid money for nothing unless the company continued to supply him. Arthur, upon making the agreement, increased his bolding and installed piggeries. (Shortly, if the company wanted to close, down, it must first weigh the pros and cons and on the con side it must, consider Arthur’s contract and compensation for him.

Mr. Bennett drew attention to the 1928 agreement, in which there was a clause that Arthur was to undertake to remove from the factory the whole of the buttermilk supply. " He submitted this contract neither expressly nor impliedly bound the company to carry on business, or to supply any special quantity of buttermilk, or to supply any buttermilk at all. It merely gave Arthur the exclusive right to remove the buttermilk, if any. Counsel maintained Mr. Moss could not read into the contract what he sought to do. He pointed out that the “case stated” had been framed on terms most favourable to the other > side.

In reply. Mr. Moss submitted the word ‘“output” connoted a carrying-on of the business. Further, there’was a period of five years mentioned, and also a renewal clause. He submitted that in any case it was implied by the renewal clause, that the output would continue for at least five years.