Instone v A. Schroeder Music Publishing Company Ltd
| Jurisdiction | UK Non-devolved |
| Judgment Date | 1974 |
| Court | House of Lords |
| Year | 1974 |
| Date | 1974 |
Restraint of Trade - Contract - Musical compositions - Agreement giving publishers song writer's exclusive services for five to ten years in exchange for royalties on work published - No other remuneration - No obligation on publishers to publish or promote song writer's work - Whether agreement void as being in unreasonable restraint of trade
A song writer, aged 21 and unknown, entered into an agreement with music publishers in their “standard form” whereby the publishers engaged his exclusive services during the term of the agreement. By clause 1 the agreement was, subject as thereinafter provided, to remain in force for five years. By clause 3 (a) the song writer assigned to the publishers the full copyright for the whole world in all his musical compositions during the term. Clauses 5 to 8 dealt with the song writer's remuneration, which was to be by royalties on works published. By clause 9 (a) if the total royalties during the term exceeded £5,000 the agreement was automatically extended for a further five years. By clause 9 (b) the publishers could determine the agreement at any time by one month's written notice. No such right was given to the song writer. By clause 16 (a) the publishers had the right to assign the agreement. By clause 16 (b) the song writer agreed not to assign his rights under the agreement without the publishers' prior written consent. The song writer brought an action claiming, inter alia, a declaration that the agreement was contrary to public policy and void. Plowman J. so held and made the declaration sought, and his judgment was affirmed by the Court of Appeal.
On appeal by the publishers: —
Held, dismissing the appeal, that the agreement was on its face unduly restrictive having regard to (i) its likely duration; (ii) the publishers' right to assign, so that it could not be argued that they would be unlikely to act oppressively and so damage their goodwill; (iii) the fact that the publishers were not bound to publish or promote the song writer's work if they chose not to do so, which they might do not only for reasons connected with its merits but also for commercial or even less legitimate reasons, so that he might earn nothing and his talents be sterilised, contrary to the public interest; and (iv) the absence of any provision entitling the song writer to terminate the agreement; that assuming that such a one-sided agreement could be justified it had been for the publishers to justify it, especially since it had not been arrived at as the result of negotiation between parties in an equal bargaining position; that, on the evidence, they had not done so and accordingly the agreement was in unreasonable restraint of trade and had rightly been held to be contrary to public policy and void.
The following case is referred to in the opinion of Lord Reid:
Esso Petroleum Co. Ltd. v. Harper's Garage (Stourport) Ltd.[
The following additional cases were cited in argument:
Gaumont-British Picture Corporation Ltd v. Alexander[
Luxor (Eastbourne) Ltd. v. Cooper[
Petrofina (Gt. Britain) Ltd. v. Martin[
Warner Brothers Pictures Inc. v. Nelson[
Young v. Timmins(
APPEAL from the Court of Appeal.
This was an appeal by the defendants, A. Schroeder Music Publishing Co. Ltd., by leave of the House of Lords granted on December 13, 1973, from the decision of the Court of Appeal (Russell and Cairns L.JJ. and Goulding J.) on October 17, 1973, upholding a judgment of Plowman J. on July 26, 1972, by which he declared in favour of the plaintiff, Tony Macaulay (formerly Anthony Gordon Instone), that an agreement entered into between the plaintiff and the defendants was contrary to public policy and void.
The facts are stated by Lord Reid.
Michael Kempster Q.C. and Stephen Tumim for the defendants.
Robert Gatehouse Q.C. and Gerald Butler for the plaintiff.
Their Lordships took time for consideration.
October 16. LORD REID. My Lords, the appellants are publishers of music. The respondent is a writer of songs. On July 12, 1966, they entered into a somewhat elaborate agreement under which the appellants engaged the exclusive services of the respondent for a term of five years which in a certain event was to be extended to 10 years. In 1970 the respondent raised the present action claiming a declaration that the agreement is contrary to public policy and void. He also made various alternative claims which your Lordships have found it unnecessary to consider. Plowman J. made the declaration claimed and his decision was affirmed by the Court of Appeal.
In 1966 the respondent was aged about 21. He and a Mr. McLeod had collaborated in writing a few songs, but it appears that none of them had been published. He obtained an interview with Mr. Schroeder who, with Mrs. Schroeder, controls an American music publishing corporation with world-wide connections. The appellant company is a subsidiary of the corporation. The respondent wished to get a different kind of contract but agreed to sign this agreement which is in the appellants' standard form with a few alterations.
It is not disputed that the validity of the agreement must be determined as at the date when it was signed and it is therefore unnecessary to deal with the reasons why the respondent now wishes to be freed from it.
The law with regard to the validity of agreements in restraint of trade was fully considered by this House in Esso Petroleum Co. Ltd. v. Harper's Garage (Stourport) Ltd.[
“1. Subject as hereinafter mentioned this agreement shall remain in force for a period of FIVE (5) years from the date hereof (hereinafter called ‘the said term’). 2. (a) The publisher engages the exclusive services of the composer and the composer will...
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