White & Carter (Councils) Ltd v McGregor

White and Carter (Councils) Ltd v McGregor [1961] UKHL 5 is an English contract law case, concerning the right to terminate a contract and the duty to mitigate.

Facts

In 1954, White & Carter (Councils) Ltd entered into a 3 year contract to display advertisements of McGregor’s garage company for three years on litter bins. In 1957, with the contract set to expire, McGregor's sales manager Mr Ward renewed the contract, however later that day, when the company learnt of this, they informed White & Carter that Ward had no authority to enter into such a contract, writing to them saying "Dear Sirs, we regret that our Mr. Ward signed an order today continuing the lamp post advertisements for a further period of 3 years. He was unaware that our proprietor Mr. McGregor does not wish to continue this form of advertisement. Please therefore cancel the order." White & Carter (Councils) Ltd refused cancellation and displayed the ads, and brought an action for the price.

Judgment

The House of Lords held, 3 to 2 that the claimants could recover the contract price and were not obliged to take steps to mitigate their loss because there was an automatic claim in debt. There was no obligation to accept the breach, even though it was unfortunate that the claimants had ‘saddled themselves with an unwanted contract causing an apparent waste of time and money’. Because it was a claim in debt and not damages, the mitigation rule had no application.

Lord Hodson said it was not a discretionary remedy, and a ‘novel equitable doctrine that a party was not to beheld to his contract unless the court in a given instance thought it reasonable so to do’ was not going to be introduced.

The dissenting judges would have held that the claimants had failed to mitigate their loss.

See also

• English contract law

Notes

References

External links