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Chappell & Co Ltd v Nestle Co Ltd

[1960] AC 87

Overview

The peppercorn case about chocolate! (or the chocolate case about peppercorns ...)

Chocolate Bar

Facts

To promote chocolate sales, Nestle advertised it would supply a record to anyone who sent it money and three chocolate wrappers. One issue was whether the wrappers formed part of the consideration for the sale of the record.

Court of Appeal

Jenkins LJ

The wrappers were only a condition qualifying the person delivering them to buy the record for 1/6 and therefore not part of the price and not consideration.

House of Lords

Lord Somervell of Harrow

The provision of wrappers was more than a mere ‘condition’ precedent; they were part of the consideration – this was clear from the offer which stated that the wrappers would ‘help you to get smash hit recordings’. 

Nestle claimed they were of no value but Lord Somervell noted that that was irrelevant, followed by his famous statement:

‘A contracting party can stipulate for what consideration he chooses. A peppercorn does not cease to be good consideration if it is established that the promisee does not like pepper and will throw away the corn.’ Consideration can be anything stipulated by the promisor.

Peppercorns