Attwood v Lamont

The case of *Peters American Delicacy Company Ltd v Champion* involved an appeal to the High Court of Australia from a decision of the Supreme Court of New South Wales. The dispute arose from a written contract between Peters American Delicacy Company Ltd (the appellant and supplier) and Ernest Simon Champion (the respondent and retail vendor) for the supply of ice-cream over a sixty-month period. The contract contained a restrictive clause wherein the respondent agreed not to sell, serve, supply, or vend any other make of ice-cream or ices during the contract's duration. The respondent ceased taking supplies and procured them from other manufacturers, leading the appellant to seek an injunction.

The central legal issue before the High Court was the construction and validity of the contract, particularly the clause concerning price alterations and its impact on the restraint of trade. The respondent argued that the contract was invalid due to an unreasonable restraint of trade, contending that the appellant could arbitrarily alter prices, effectively preventing the respondent from profitably trading or dealing with anyone else. The appellant, conversely, argued that the contract, properly construed, did not impose an undue restraint and that an implied term of reasonableness should apply to price alterations.

A majority of the High Court (Knox C.J., Isaacs, and Gavan Duffy JJ.) held that the appeal should be allowed. Their reasoning was that neither of the rival implications – that the appellant could arbitrarily set prices, nor that prices must be reasonable – could be properly inferred from the contract. They found that the parties had expressly addressed price alterations, and the contract, when read as a whole, indicated that upon a notification of a price increase, the contractual obligations would cease, as the respondent was only bound to pay the initially stated prices unless further assent was given. Consequently, the restraint of trade was not considered unreasonable in these circumstances. Higgins and Powers JJ. dissented, finding the restraint of trade to be undue.

The High Court allowed the appeal, reversing the decision of the Full Court of New South Wales. The order of the primary judge, Long Innes J., granting an injunction was restored, but modified to exclude the phrase "or after due notice at other reasonable prices."