L. Schuler were a manufacturing company and they granted Wickman the sole right to sell their products in the UK. In the terms of the agreement, Wickman were to visit six of Schuler's major British clients each week for the duration of the contract (4 years), 1400 visits in total which they failed to do. It said in the contract that this was a "condition" of the agreement. Schuler repudiated the contract. The initial arbitrator found for Wickman, which was reversed at trial but then restored in the Court of Appeal.
- Does calling something a “condition” in the contract mean that its breach leads to a right of rescission?
Lord Reid, writing for the majority, states that simply calling something a "condition" does not make its breach necessarily result in a right of rescission. In this case, it is clear that it would be almost practically impossible for Wickman to successfully complete all of the visits – what if someone was sick, etc. There was also another clause in the contract that said Schuler would inform the distributor of material breaches and demand a remedy, which did not occur here.
- Simply calling something a "condition" in the contract itself does not mean that its breach will lead to a right of rescission - you must look at the event as per Hong Kong Fir Shipping Co. Ltd. v Kawasaki Kisen Kaisha Ltd..
- When there is a breach of one clause in a contract, the breach must be read in context with the entire contract to decide if rescission is in order.