Globe Motors, Inc & Ors v TRW Lucas Varity Electric Steering Ltd & Anor

Globe Motors, Inc & Ors v TRW Lucas Varity Electric Steering Ltd & Anor

The Court of Appeal held that the exclusive supply agreement did not extend to products that could have been produced by engineering changes unless such changes were actually proposed and agreed upon under the contract's process. The court found no basis in the contract's language to impose an obligation on TRW Lucas to propose engineering changes to Globe. The appeal was allowed on this ground, reversing the High Court's finding of liability.

Parties
Claimant/respondent: Globe Motors, Inc; Claimant/respondent: Globe Motors Portugal-Material Electrico Para A Industria Automovel LDA; Claimant/respondent: Safran USA Inc; First Defendant/appellant: TRW Lucas Varity Electric Steering Limited; Second Defendant: TRW Limited
Jurisdiction
England and Wales
Judgment Date
20 April 2016
Procedural Posture
Civil Appeal / Appeal From High Court Judgment on Liability
Outcome
Appeal allowed on ground 1; High Court's finding of liability reversed.
Legal Topics
Interpretation of Contracts, Variation of Contracts, Exclusive Supply Agreements, Anti Oral Variation Clauses
Contract Law Commercial Law Interpretation of Contracts Variation of Contracts Exclusive Supply Agreements Anti Oral Variation Clauses

Case Brief

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Parties

Globe Motors, Inc

Claimant/respondent

Globe Motors Portugal-Material Electrico Para A Industria Automovel LDA

Claimant/respondent

Safran USA Inc

Claimant/respondent

TRW Lucas Varity Electric Steering Limited

First Defendant/appellant

TRW Limited

Second Defendant

Procedural Posture

Civil Appeal / Appeal From High Court Judgment on Liability

Legal Issues

  1. 1 Whether the definition of 'Products' in the exclusive supply agreement included motors that could have been produced by engineering changes but were not actually proposed or agreed upon under the contract process
  2. 2 Whether the agreement could be varied orally or by conduct despite a clause requiring written variation
  3. 3 Whether Porto became a party to the agreement by conduct

Ratio Decidendi

The Court of Appeal held that the exclusive supply agreement did not extend to products that could have been produced by engineering changes unless such changes were actually proposed and agreed upon under the contract's process. The court found no basis in the contract's language to impose an obligation on TRW Lucas to propose engineering changes to Globe. The appeal was allowed on this ground, reversing the High Court's finding of liability.

Court Disposition

Appeal allowed on ground 1; High Court's finding of liability reversed.

Orders

  • Appeal allowed on ground 1;
  • No need to decide remaining grounds;