Home | Cases | Chappell & Co Ltd v Nestle Co Ltd

 

Key information

Court
House of Lords (UK)

Judge
Viscount Simonds
Lord Reid
Lord Tucker
Lord Keith of Avonholm
Lord Somervell of Harrow

Issues
Consideration (peppercorn)

Full case
BAILII

AustraliaChappell & Co Ltd v Nestle Co Ltd

[1990] AC 87

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.

Jenkins LJ in Court of Appeal

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.

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.

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