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Macaulay v Schroeder Music Publishing Co Ltd, [1974] 1 All ER 171

Facts:

P (songwriter) entered standard form K with D. P brought claim that it was contrary to public policy and void

Issue(s):

Is the standard form K fair in the circumstances?

Ratio:

Test for Fairness (objective test): Are the restrictions both:
**Reasonably necessary for the protection of the legitimate interest of the promisee, AND
***Looking at economics and circumstances of the parties
**Proportionate with the benefits secured to promisor under the contract?

Analysis:

There are 2 kinds of standard form contracts:
1. Mercantile: Those which set out the terms upon which mercantile transactions of common occurrence are to be carried out - these have been subject to negotiation between the parties
**Fairness is not relevant to these types
2. Ticket Cases: Concentration of particular kinds of business in relatively few hands
**Not subject to negotiation between the parties – they have been dictated by the party with the power to say, “take it or leave it” – like ticket cases
**Monopoly behaviour
**This is the bad kind of standard form contracts
**Unequal bargaining power

Holding:

The contract is unenforceable.


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